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 03/14/2025
Weekly Sector Credit – Cultivation & Retail
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- The median total liabilities to market cap of cultivation and retail sector companies is now 2.09x, and our option valuation suggests that should correspond to asset value coverage of liabilities of around 1.35x. On the downside, the third quartile number of 8.54x is considerably over our informal cutoff of 5x, where we believe asset value coverage begins to go below 1x. The 8.54x suggests that 25% of the companies in the sector have asset coverage of less than approximately .75x.
- The good news is that the median Debt/ 2025 EBITDA for the sector is now 3.88x, and this is a value that is consistent with long-term stability IF we can get 280e relief. Until then, the number says that over half of the sector continues to carry more leverage than is sustainable in a 280e environment.
Week ended 03/14/2025
Weekly Sector Credit – Cultivation & Retail
-
- The median total liabilities to market cap of cultivation and retail sector companies is now 2.09x, and our option valuation suggests that should correspond to asset value coverage of liabilities of around 1.35x. On the downside, the third quartile number of 8.54x is considerably over our informal cutoff of 5x, where we believe asset value coverage begins to go below 1x. The 8.54x suggests that 25% of the companies in the sector have asset coverage of less than approximately .75x.
- The good news is that the median Debt/ 2025 EBITDA for the sector is now 3.88x, and this is a value that is consistent with long-term stability IF we can get 280e relief. Until then, the number says that over half of the sector continues to carry more leverage than is sustainable in a 280e environment.
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