Weekly Credit Tracker
Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.
Weekly Credit Report – Ranking MSOs with Market Caps from $25M to $500M
-
-
- Companies with market caps under $500 million receive significantly less attention. Five of the twelve companies in this week’s credit ranking, including Grown Rogue, IAnthus, C21, Leef Brands, and Fluent, have no sell-side analyst coverage.
- Our top credit is Grown Rogue, which scores at the top of the group in both Liquidity and Leverage.
- TerrAscend is ranked #2, despite midrange scores of 5/12 on Liquidity, 5/12 on Leverage, and 4/12 on Profitability. Mitigating these is a #1 rank in Size. Size seems like an odd credit measure until one thinks through all the things that size is correlated with: bigger firms tend to have more established business relationships, more ancillary assets, and more internal diversification.
- Leef Brand, in last place, is likely due to the fact that we do not have a full year of impact on their new outdoor cultivation site. We expect to see Leef rise in the rankings as a result.
- Jushi ranks in the middle of the pack, and the bonds have the highest offered yield of the group. Jushi has significant debt maturities in 2026 and early 2027, as well as substantial tax liabilities. Offsetting this is their positioning in Virginia and Pennsylvania. The former benefits from the election of a new Democratic Governor who has publicly supported getting serious about adult rec, while the latter is a perennial candidate to go rec.
- Cannabist at #11/12 should not be surprising. The company restructured its debt in one of the last pure amend-and-extend transactions we are likely to see. Cannabist’s maturities are pushed out to at least 2928, but the company remains significantly overlevered. Our Asset value coverage measures consistently show significantly less than 1x coverage of liabilities.
- Investors should not focus solely on S3 and overlook the ongoing credit stresses in the MSOs. The timing of S3 is unknown, but even if it were announced tomorrow, it would probably take at least six months to be fully effective. Meanwhile, a close focus on liquidity and market leverage will provide you with sufficient warning signs to avoid most credit disasters.
-
Credit Tracker By Sector
Credit ratings are not currently available for public cannabis companies leaving companies, lenders and investors with a gap of information. The Viridian Cannabis Credit Tracker fills this gap. The model uses 11 market and financial statement variables to discern 4 key credit factors: Liquidity, Leverage, Profitability, and Size, to provide credit/liquidity analysis for over 370 public Cannabis/Hemp companies.
Weekly Sector Credit – Cultivation and Retail Sector
- The Chart below shows the credit metrics for the Cultivation and Retail sector.
- Several key aspects jump out:
- Liquidity is generally reasonable. The median free cash flow-adjusted current ratio of 1.01x indicates that more than half of the 74 companies have sufficient liquidity to pay all short-term liabilities without additional funding. Importantly, however, the lowest quartile figure of 0.25x indicates that at least ¼ of the companies (19 companies) have serious liquidity issues and will require asset sales or new funding to survive the next 12 months.
- The median total liabilities to market cap ratio of 1.42x continues to reflect a market perception of strong asset value coverage of liabilities.
- There continues to be a leverage problem, with over 25% of the sample having debt/ 2025 EBITDA of over 3.68x, a number that is not sustainable even post-S3. The hope is that S3 will raise stock prices sufficiently to allow a re-equitization of the sector.
Weekly Sector Credit – Cultivation and Retail Sector
- The Chart below shows the credit metrics for the Cultivation and Retail sector.
- Several key aspects jump out:
- Liquidity is generally reasonable. The median free cash flow-adjusted current ratio of 1.01x indicates that more than half of the 74 companies have sufficient liquidity to pay all short-term liabilities without additional funding. Importantly, however, the lowest quartile figure of 0.25x indicates that at least ¼ of the companies (19 companies) have serious liquidity issues and will require asset sales or new funding to survive the next 12 months.
- The median total liabilities to market cap ratio of 1.42x continues to reflect a market perception of strong asset value coverage of liabilities.
- There continues to be a leverage problem, with over 25% of the sample having debt/ 2025 EBITDA of over 3.68x, a number that is not sustainable even post-S3. The hope is that S3 will raise stock prices sufficiently to allow a re-equitization of the sector.
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.