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 06/13/2025
Weekly Sector Credit – Cross Sector Liquidity vs Leverage Metrics
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- The chart below shows the medians for our favorite liquidity ratio (free cash flow-adjusted current ratio) and our top leverage ratio (total liabilities to market capitalization) across all active sectors.
- Note that the sectors with the highest leverage (such as Cultivation and Retail) also tend to have the best liquidity. Perhaps this is just a chicken-and-egg story: companies that can access debt markets can bolster their liquidity, while sectors that rely on equity financing have challenging liquidity pictures due to the scarcity of equity capital.
- Note also that the median liquidity ratios for all sectors, other than Cultivation & Retail, are below 1x. This indicates that over half of the companies in these sectors have a pressing need for additional funding in order to discharge their current liabilities. This “hand to mouth” positioning is bound to produce “accidents” by way of forced mergers and distress. Never a dull moment in cannabis!
Week ended 06/13/2025
Weekly Sector Credit – Cross Sector Liquidity vs Leverage Metrics
-
- The chart below shows the medians for our favorite liquidity ratio (free cash flow-adjusted current ratio) and our top leverage ratio (total liabilities to market capitalization) across all active sectors.
- Note that the sectors with the highest leverage (such as Cultivation and Retail) also tend to have the best liquidity. Perhaps this is just a chicken-and-egg story: companies that can access debt markets can bolster their liquidity, while sectors that rely on equity financing have challenging liquidity pictures due to the scarcity of equity capital.
- Note also that the median liquidity ratios for all sectors, other than Cultivation & Retail, are below 1x. This indicates that over half of the companies in these sectors have a pressing need for additional funding in order to discharge their current liabilities. This “hand to mouth” positioning is bound to produce “accidents” by way of forced mergers and distress. Never a dull moment in cannabis!
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