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 05/16/2025
Weekly Sector Credit – Agriculture Technology Sector
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- Ag Tech companies stand to be significant beneficiaries of any eventual rescheduling or other federal reform. Their customers, the cultivators, will be on firmer financial footing, and it stands to reason that expansion of cultivation capacity and the impact of new adult rec states will result in more sales of nutrients, fertilizers, lighting systems, etc.
- But for the time being, the sector is treading water. Liquidity is still strained as the .61x free cash flow adjusted current ratio demonstrates.
- Furthermore, all quartiles of FFO/assets are negative, indicating that less than a quarter of the companies have positive after-tax cash flows.
- Still, there is some good news in the leverage indicators. The top quartile of companies has positive EBITDA, and the third quartile Debt/ EBITDA of 1.92x is not terrible. Similarly, the total liabilities/market cap median of .79x indicates that the market believes there is still reasonable asset value coverage of the sector’s liabilities.
- We are looking to see a broadening of the profitability base, as currently only the top 25% of companies are positive EBITDA.
Week ended 05/16/2025
Weekly Sector Credit – Agriculture Technology Sector
-
- Ag Tech companies stand to be significant beneficiaries of any eventual rescheduling or other federal reform. Their customers, the cultivators, will be on firmer financial footing, and it stands to reason that expansion of cultivation capacity and the impact of new adult rec states will result in more sales of nutrients, fertilizers, lighting systems, etc.
- But for the time being, the sector is treading water. Liquidity is still strained as the .61x free cash flow adjusted current ratio demonstrates.
- Furthermore, all quartiles of FFO/assets are negative, indicating that less than a quarter of the companies have positive after-tax cash flows.
- Still, there is some good news in the leverage indicators. The top quartile of companies has positive EBITDA, and the third quartile Debt/ EBITDA of 1.92x is not terrible. Similarly, the total liabilities/market cap median of .79x indicates that the market believes there is still reasonable asset value coverage of the sector’s liabilities.
- We are looking to see a broadening of the profitability base, as currently only the top 25% of companies are positive EBITDA.
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