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 12/15/2023
The 19 companies in the Biotech/Pharma sector have one of the lowest median free cash flow adjusted current ratios of any sector at .04x. The third quartile value of .90x indicates that over 75% of the sector has inadequate resources to dispatch its current liabilities and will therefore need to raise money. This situation arises due to the sector’s predominantly negative free cash flow. Despite the negative cash flow, total liabilities to market cap is only .37x, suggesting that some variety of equity-linked debt obligations could be an answer to the financing puzzle. Further complicating matters, however, is that most sector companies are small, with a 3rd quartile market cap of only $11.8M. The small size exacerbates the financing difficulty but does suggest that inter-sector M&A activity may accelerate.
Week ended 12/15/2023
The 19 companies in the Biotech/Pharma sector have one of the lowest median free cash flow adjusted current ratios of any sector at .04x. The third quartile value of .90x indicates that over 75% of the sector has inadequate resources to dispatch its current liabilities and will therefore need to raise money. This situation arises due to the sector’s predominantly negative free cash flow. Despite the negative cash flow, total liabilities to market cap is only .37x, suggesting that some variety of equity-linked debt obligations could be an answer to the financing puzzle. Further complicating matters, however, is that most sector companies are small, with a 3rd quartile market cap of only $11.8M. The small size exacerbates the financing difficulty but does suggest that inter-sector M&A activity may accelerate.
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