OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
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Credit Tracker By Industry Sector
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.
Week ended 01/17/2025
Weekly Sector Credit – The Infused Products and Extracts sector benefitting from the explosion of hemp THC beverages
- The Infused Products and Extracts sector has been benefiting from the tremendous growth of hemp-derived THC-infused beverages. Beverages never took off as dispensary products due to the logistics of delivery, storage, and display at the dispensary. But farm bill legal hemp-derived THC made the product DTC capable, and that made all of the difference. Frankly, we can’t wait for the day that all cannabis products can be ordered online and delivered by FedEx!
- The sector’s credit stats are still lagging behind the uptick in fundamental business activity. Liquidity is still very weak, with the median free cash flow adjusted current ratio for the 16 companies at 0.0x, indicating the dire need for additional financing in order to discharge short-term liabilities.
- Luckily, leverage is relatively low from a market point of view, at .38x in total liabilities to market cap.
- Still, profitability has alluded the sector with only 6.7% median 2024 EBITDAR to Revenues.
- The future of many of these companies may lie in M&A, with larger, better, healed MSOs who lust after the sector’s availability to sell to a broader customer mix.
Week ended 01/17/2025
Weekly Sector Credit – The Infused Products and Extracts sector benefitting from the explosion of hemp THC beverages
- The Infused Products and Extracts sector has been benefiting from the tremendous growth of hemp-derived THC-infused beverages. Beverages never took off as dispensary products due to the logistics of delivery, storage, and display at the dispensary. But farm bill legal hemp-derived THC made the product DTC capable, and that made all of the difference. Frankly, we can’t wait for the day that all cannabis products can be ordered online and delivered by FedEx!
- The sector’s credit stats are still lagging behind the uptick in fundamental business activity. Liquidity is still very weak, with the median free cash flow adjusted current ratio for the 16 companies at 0.0x, indicating the dire need for additional financing in order to discharge short-term liabilities.
- Luckily, leverage is relatively low from a market point of view, at .38x in total liabilities to market cap.
- Still, profitability has alluded the sector with only 6.7% median 2024 EBITDAR to Revenues.
- The future of many of these companies may lie in M&A, with larger, better, healed MSOs who lust after the sector’s availability to sell to a broader customer mix.
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