OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS

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 07/12/2024

Weekly Sector Credit

  • This week’s Credit Sector Tracker profiles the 21 companies in the Psychedelics Sector and compares the credit metrics with the numbers from mid-April, shortly after year-end results were filed.
  • Liquidity is always a critical issue for the sector, and not much has changed. The median free cash flow adjusted current ratio now stands at -.05x compared to -.06x in April. Both readings indicate that more than ½ of the companies in the sector have continuing liquidity pressures and are not fully funded through the year. The 3rd quartile number is now 4.03x compared to 5.0x. Although the reading is slightly worse, the conclusion is still the same: the top ¼ of the companies are well-funded to carry out their drug discovery and clinical trial activity. For companies on the liquidity-starved end, we foresee continued consolidation through M&A.
  • Leverage is a secondary consideration as most companies have no debt, but the median total liabilities to market cap is now .46x compared to .32x in April. We do not see this as a significant change; the market still believes that over ½ of the companies have solid asset value support of their liabilities.

Week ended 07/12/2024

Weekly Sector Credit

  • This week’s Credit Sector Tracker profiles the 21 companies in the Psychedelics Sector and compares the credit metrics with the numbers from mid-April, shortly after year-end results were filed.
  • Liquidity is always a critical issue for the sector, and not much has changed. The median free cash flow adjusted current ratio now stands at -.05x compared to -.06x in April. Both readings indicate that more than ½ of the companies in the sector have continuing liquidity pressures and are not fully funded through the year. The 3rd quartile number is now 4.03x compared to 5.0x. Although the reading is slightly worse, the conclusion is still the same: the top ¼ of the companies are well-funded to carry out their drug discovery and clinical trial activity. For companies on the liquidity-starved end, we foresee continued consolidation through M&A.
  • Leverage is a secondary consideration as most companies have no debt, but the median total liabilities to market cap is now .46x compared to .32x in April. We do not see this as a significant change; the market still believes that over ½ of the companies have solid asset value support of their liabilities.

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