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 05/05/2023
The Viridian Credit Tracker utilizes 11 different bespoke credit ratios to evaluate four aspects of credit quality: Liquidity, Leverage, Profitability, and Size. We are looking at the extreme quartiles of our ratios to identify credit stresses. Liquidity continues to be tight for many of the sectors. The Hemp sector median current ratio of 1.44x appears reasonable. However, our free cash flow adjusted current ratio median is only .1x reflecting significant liquidity stress from negative free cash flow. The highest quartile of the 51 Hemp companies on the debt/ market cap ratio is now 4.86x, indicating overleveraged positions. Screening for companies with free cash flow liquidity below 1x and market leverage over 3x gives us eight companies that may be vulnerable to restructuring or forced sale.
Week ended 05/05/2023
The Viridian Credit Tracker utilizes 11 different bespoke credit ratios to evaluate four aspects of credit quality: Liquidity, Leverage, Profitability, and Size. We are looking at the extreme quartiles of our ratios to identify credit stresses. Liquidity continues to be tight for many of the sectors. The Hemp sector median current ratio of 1.44x appears reasonable. However, our free cash flow adjusted current ratio median is only .1x reflecting significant liquidity stress from negative free cash flow. The highest quartile of the 51 Hemp companies on the debt/ market cap ratio is now 4.86x, indicating overleveraged positions. Screening for companies with free cash flow liquidity below 1x and market leverage over 3x gives us eight companies that may be vulnerable to restructuring or forced sale.
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