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 11/22/2024
Weekly Sector Credit – Hemp
- The public hemp sector still doesn’t look very attractive from a credit point of view. This is probably due to the fact that the companies making zillions of $ selling d8 at gas stations are mainly private companies that don’t go into these metrics.
- Liquidity is low, with a median annualized free cash flow adjusted current ratio of .74x. Although that implies that the sector will need additional funding to dispatch its current liabilities, the number is actually pretty decent. It is the best stat of the twelve sectors we follow- a classic case of dammed with faint praise.
- Another relatively strong number is the median total liabilities to a market cap of 1.26x, which is stronger than most other sectors, including cultivation and retail.
- The bad news is the stubbornly negative funds from the operation to total assets, which is kind of an after-tax cash flow measure of profitability. Cultivation companies can point to 280e’s absurd tax rates for why cash flow is negative, but Hemp companies are technically legal under the farm bill and don’t have 280e to blame.
Week ended 11/22/2024
Weekly Sector Credit – Hemp
- The public hemp sector still doesn’t look very attractive from a credit point of view. This is probably due to the fact that the companies making zillions of $ selling d8 at gas stations are mainly private companies that don’t go into these metrics.
- Liquidity is low, with a median annualized free cash flow adjusted current ratio of .74x. Although that implies that the sector will need additional funding to dispatch its current liabilities, the number is actually pretty decent. It is the best stat of the twelve sectors we follow- a classic case of dammed with faint praise.
- Another relatively strong number is the median total liabilities to a market cap of 1.26x, which is stronger than most other sectors, including cultivation and retail.
- The bad news is the stubbornly negative funds from the operation to total assets, which is kind of an after-tax cash flow measure of profitability. Cultivation companies can point to 280e’s absurd tax rates for why cash flow is negative, but Hemp companies are technically legal under the farm bill and don’t have 280e to blame.
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