OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
Home » Week of 2/5/24-2/9/24
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.
The eight companies in the Consumption Devices sector are a study in credit contrasts. On a liquidity basis, the sector’s top quartile of free cash flow adjusted current ratio is only .98x. Only two companies, Delota (LOTA: CSE) at 1.12x, and Turning Point (TPG: NYSE ) at 3.37x appear to be able to get through the year without additional capital. On the low end, Item 9 (INLB-OTC), the sector’s worst-ranked credit, is clearly in a full-on liquidity crisis and is searching for a buyer for the firm. Its distress is also shown by its over 900x liabilities to market cap. Meanwhile, the sector’s top-ranked credit, Turning Point, has annualized funds from operation to total liabilities of 16%, ranking it as a solid single B credit. The Consumption Device sector is a small group with such incredibly divergent credit quality that median ratios, or even quartiles, don’t adequately describe the picture.
The eight companies in the Consumption Devices sector are a study in credit contrasts. On a liquidity basis, the sector’s top quartile of free cash flow adjusted current ratio is only .98x. Only two companies, Delota (LOTA: CSE) at 1.12x, and Turning Point (TPG: NYSE ) at 3.37x appear to be able to get through the year without additional capital. On the low end, Item 9 (INLB-OTC), the sector’s worst-ranked credit, is clearly in a full-on liquidity crisis and is searching for a buyer for the firm. Its distress is also shown by its over 900x liabilities to market cap. Meanwhile, the sector’s top-ranked credit, Turning Point, has annualized funds from operation to total liabilities of 16%, ranking it as a solid single B credit. The Consumption Device sector is a small group with such incredibly divergent credit quality that median ratios, or even quartiles, don’t adequately describe the picture.
*Marijuana remains illegal under federal law. The Federal Government does not recognize marijuana to have any medicinal values. Marijuana cultivation, possession, consumption, sales, and distribution are illegal under federal laws and also certain state laws. Please note that there are differences in marijuana laws from one state, county, or city to another.
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