Weekly Sector Credit – Cultivation and Retail

• • The median total liabilities to market capitalization ratio weakened slightly to 1.43x this week. However, our option modeling indicates that this change means the market now believes the sector has 1.6 times asset coverage of liabilities.
  • Liquidity remains constant from last week, as it depends entirely on financial statement measurements. Our bespoke, free cash flow-adjusted current ratio has a median value of only 0.87x as of August 22, 2025. A median of under 1x indicates that more than half of the 72 companies will require additional funding during the next twelve months. We will be keeping a close eye on this number as we approach year-end and the sizable 2026 debt maturities begin to appear as current liabilities. One thing is fairly clear: absent refinancing activity, liquidity for the sector is likely to worsen as the 2026 maturities get closer.