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 01/06/2023
The Viridian Credit Tracker utilizes 11 different bespoke credit ratios to evaluate four aspects of credit quality: Liquidity, Leverage, Profitability, and Size. Given the constrained capital markets, we are keeping a close eye on liquidity. This week, one statistic that caught our eye was the free cash flow adjusted current ratio median of -.26x for the 24 Psychedelic companies in the Viridian database. This ratio starts with the classic current ratio but subtracts annualized free cash flow from current assets in the numerator. The -.26x indicates that more than half of the sector’s companies have significant liquidity pressures and will need to do financing in 2023. The picture has deteriorated significantly since mid-year 2022, when the ratio measured 4.32x.
Week ended 01/06/2023
The Viridian Credit Tracker utilizes 11 different bespoke credit ratios to evaluate four aspects of credit quality: Liquidity, Leverage, Profitability, and Size. Given the constrained capital markets, we are keeping a close eye on liquidity. This week, one statistic that caught our eye was the free cash flow adjusted current ratio median of -.26x for the 24 Psychedelic companies in the Viridian database. This ratio starts with the classic current ratio but subtracts annualized free cash flow from current assets in the numerator. The -.26x indicates that more than half of the sector’s companies have significant liquidity pressures and will need to do financing in 2023. The picture has deteriorated significantly since mid-year 2022, when the ratio measured 4.32x.
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