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 01/24/2025
Weekly Sector Credit – Biotech/Pharma Sector
- The Viridian Credit Sector Tracker continues to show a problematic credit picture for the 42 companies in the sector.
- On the positive side, the sector enjoys the second lowest market leverage median (total liabilities to market cap of the twelve sectors we cover.
- Unfortunately, part of the reason for the low leverage is that even the top quartile of companies has negative funds from operation, presenting a lack of ability to service debt.
- Perhaps most importantly, weak liquidity from the cash outflow to fund clinical trials leads to a near-constant need for additional capital raises. The median cash flow adjusted current ratio is -.06, indicating critical level illiquidity. On the positive side, the top 25% of the sector’s companies enjoy quite solid liquidity, with a 1.77x measure on this ratio.
Week ended 01/24/2025
Weekly Sector Credit – Biotech/Pharma Sector
- The Viridian Credit Sector Tracker continues to show a problematic credit picture for the 42 companies in the sector.
- On the positive side, the sector enjoys the second lowest market leverage median (total liabilities to market cap of the twelve sectors we cover.
- Unfortunately, part of the reason for the low leverage is that even the top quartile of companies has negative funds from operation, presenting a lack of ability to service debt.
- Perhaps most importantly, weak liquidity from the cash outflow to fund clinical trials leads to a near-constant need for additional capital raises. The median cash flow adjusted current ratio is -.06, indicating critical level illiquidity. On the positive side, the top 25% of the sector’s companies enjoy quite solid liquidity, with a 1.77x measure on this ratio.
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