Weekly Sector Credit – Cultivation & Retail

• • The table below shows the overall credit profile of the 74 Cultivation & Retail companies currently in the Viridian Credit Tracker database.

• • • Note that the median free cash flow-adjusted current ratio is now 1.01x, indicating that more than half of the companies have sufficient liquidity to get through the next year without external funding. The lowest quartile of 0.25x continues to suggest that around nineteen companies are experiencing severe liquidity stress. At the other end of the spectrum, the third quartile value of 2.44x indicates excellent liquidity and no operating need for additional capital.
    • The median total liabilities-to-market cap figure of 1.36x indicates that the market believes the asset value coverage for half of the group is over 1.6 times.
    • Median Debt/ 2026 EBITDA, at 1.99x, is right at the sustainable level with 280E in force. See our Chart of the Week for our analysis of why we believe 2x is the right leverage number for well-performing companies during 280E.
    • Finally, examining the group by market capitalization reveals enormous variation. Half of the companies in the sector have market caps under $19 million, while the top 25% of companies have market caps over $129 million.