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 – Have MSOs Been Successful in Reducing Working Capital Ratios?
- Since the beginning of the ongoing capital crunch, which took hold in force in 2023, MSO managements have been talking about conserving cash through better working capital management. Some of these actions include reducing receivables by eliminating customers who don’t pay on time, reducing inventory by culling less productive SKUs, and leaning a bit more on suppliers by slowing bill payments.
- We calculated the numbers for twelve top MSOs, including GTI, Curaleaf, Trulieve, Glass House, Cresco, Verano, TerrAscend, Grown Rogue, Planet 13, Ascend, Jushi, and MariMed. We took current assets and subtracted cash and then subtracted non-debt, non-tax current liabilities to get Net working assets, which we divided by revenues to get the orange line on the graph. Note, usually, we would not have subtracted accrued taxes from the liabilities; however, the numbers were distorted by companies shifting taxes into “uncertain tax liabilities,” which are long-term liabilities.
- The bottom line is that, as a group, little progress has been made. The group had 9.1% NWA/revenues in 2021 and has never been lower since. The purple line shows that MSOs Have made progress in reducing receivables and inventories relative to sales. Still, the blue line indicates that these gains have been given up through lower payables and accrued expenses relative to sales.
- Still, there are significant differences between the MSOs, as can be seen in the table of individual results below. Some companies have reduced working capital intensity. Grown Rogue is an example, going from 37% in 2021 to 3% in 2024. Curaleaf is another company that has shown solid progress. However, for each gainer, others have lost ground.
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 & Retail – Shrinking # of Companies with more exits to come
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- Long-time readers may have noticed the gradual winnowing of Cultivation & Retail companies in the Viridian Capital Credit Sector Report. We currently have 83 companies in our database, with 30 having sell-side coverage, down from 93 and 36, respectively, two years ago. Noticeable well-known dropouts include MedMen & Hexo. But we challenge our readers to come up with the rest of the 10 dropouts. Those of us who have lived through the last few years in cannabis should be able to add to this list easily.
- More reductions are in the works. For example, we are unlikely to see StateHouse or Gold Flora in our data soon. It’s a brutal environment, and more failures are coming. Ironically, some of the worst are likely to be taken private! (See our writeup this week of the final credit draw of Entourage before it goes private). Cannabis is the land of zombies. Companies that have essentially been dead for some time refuse to lay down. The lack of bankruptcy as an option is one reason, while another, perhaps stronger one, is lenders’ lack of desire to take possession of the assets.
- The good news is that companies that prove they can survive in the current climate (can you say “free cash positive”) will be much stronger for the rigors of managing through this. Consolidation is happening on a smaller scale, with private companies completing intrastate M&A deals. We see this trend continuing, especially in maturing markets.
Weekly Sector Credit – Cultivation & Retail – Shrinking # of Companies with more exits to come
-
- Long-time readers may have noticed the gradual winnowing of Cultivation & Retail companies in the Viridian Capital Credit Sector Report. We currently have 83 companies in our database, with 30 having sell-side coverage, down from 93 and 36, respectively, two years ago. Noticeable well-known dropouts include MedMen & Hexo. But we challenge our readers to come up with the rest of the 10 dropouts. Those of us who have lived through the last few years in cannabis should be able to add to this list easily.
- More reductions are in the works. For example, we are unlikely to see StateHouse or Gold Flora in our data soon. It’s a brutal environment, and more failures are coming. Ironically, some of the worst are likely to be taken private! (See our writeup this week of the final credit draw of Entourage before it goes private). Cannabis is the land of zombies. Companies that have essentially been dead for some time refuse to lay down. The lack of bankruptcy as an option is one reason, while another, perhaps stronger one, is lenders’ lack of desire to take possession of the assets.
- The good news is that companies that prove they can survive in the current climate (can you say “free cash positive”) will be much stronger for the rigors of managing through this. Consolidation is happening on a smaller scale, with private companies completing intrastate M&A deals. We see this trend continuing, especially in maturing markets.