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 02/07/2025
Weekly Sector Credit – Cultivation & Retail
- The cultivation and retail sector statistics clearly point to the discussion above about the limits to cannabis leverage:
- The median Debt/ 2025 EBITDA for the sector is 3.42x, a figure that is clearly above the sustainable limit in a 280e environment and quite full even in a 280e environment without long-term debt solutions.
- The lowest quartile figure of 2.0x debt seems appropriate. So, at least ¼ of the companies in the sector are sustainably levered if 280e doesn’t go away soon.
- Still, on a total liabilities-to-market cap basis, the median figure of 1.78x seems reasonable. This dichotomy suggests that the market still fundamentally believes that 280e will go away. Otherwise, the equities would be trading even lower than they are!
- We are still believers that 280e will be eliminated; we just can’t point to any politicians who are both in power and motivated to lead the charge.
Week ended 02/07/2025
Weekly Sector Credit – Cultivation & Retail
- The cultivation and retail sector statistics clearly point to the discussion above about the limits to cannabis leverage:
- The median Debt/ 2025 EBITDA for the sector is 3.42x, a figure that is clearly above the sustainable limit in a 280e environment and quite full even in a 280e environment without long-term debt solutions.
- The lowest quartile figure of 2.0x debt seems appropriate. So, at least ¼ of the companies in the sector are sustainably levered if 280e doesn’t go away soon.
- Still, on a total liabilities-to-market cap basis, the median figure of 1.78x seems reasonable. This dichotomy suggests that the market still fundamentally believes that 280e will go away. Otherwise, the equities would be trading even lower than they are!
- We are still believers that 280e will be eliminated; we just can’t point to any politicians who are both in power and motivated to lead the charge.
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