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 02/02/2024
The Hemp sector has not benefitted from any of the implied credit enhancement that increased equity valuations imply for the MSOs. The total liabilities to market cap. of the 43 companies in the Viridian Capital Credit Tracker database increased to a median of 1.49x this week compared to 1.29x last week. We are frankly surprised that the numbers look that strong given the weak liquidity (median free cash flow adjusted current ratio of .26x) and troubling cash flow (median annualized funds from operation/ total liabilities of -.42x) of the sector, combined with the median market cap of only $4M which restricts financial flexibility. The sector anxiously awaits the new Farm Bill, hoping its most profitable products, including D8, are not regulated out of commerce. Unfortunately, the farm bill is far from the top of Congress’s mind, and no one knows when this will get addressed.
Week ended 02/02/2024
The Hemp sector has not benefitted from any of the implied credit enhancement that increased equity valuations imply for the MSOs. The total liabilities to market cap. of the 43 companies in the Viridian Capital Credit Tracker database increased to a median of 1.49x this week compared to 1.29x last week. We are frankly surprised that the numbers look that strong given the weak liquidity (median free cash flow adjusted current ratio of .26x) and troubling cash flow (median annualized funds from operation/ total liabilities of -.42x) of the sector, combined with the median market cap of only $4M which restricts financial flexibility. The sector anxiously awaits the new Farm Bill, hoping its most profitable products, including D8, are not regulated out of commerce. Unfortunately, the farm bill is far from the top of Congress’s mind, and no one knows when this will get addressed.
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