OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
Quick
Links
More Charts
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 08/30/2024
Weekly Sector Credit
- Psychedelics has been one of the worst-performing of the twelve cannabis-related sectors analyzed in the Viridian Credit Tracker.
- Liquidity has always been the weak link in the sector’s credit picture, and that has not changed much over the last year. Currently, despite a 3.08x current ratio, the free cash flow adjusted current ratio is -.002x, indicating a pressing need for additional capital. That doesn’t come as a surprise to anyone looking at the sector, as most participants are pre-revenue and spending relatively large sums on clinical trials and drug development. The 3rd quartile value of 3.98x does show that at least 25% of the 22-member group has solid liquidity.
- The credit strong point of the sector is its median total liabilities to market cap of .46x. Algebraic rearrangement of this ratio shows that the implied asset value of the industry is 3.17x its liabilities.
- The combination of chronically weak liquidity and strong implied asset value coverage is a formula for M&A and consolidation.
Week ended 08/30/2024
Weekly Sector Credit
- Psychedelics has been one of the worst-performing of the twelve cannabis-related sectors analyzed in the Viridian Credit Tracker.
- Liquidity has always been the weak link in the sector’s credit picture, and that has not changed much over the last year. Currently, despite a 3.08x current ratio, the free cash flow adjusted current ratio is -.002x, indicating a pressing need for additional capital. That doesn’t come as a surprise to anyone looking at the sector, as most participants are pre-revenue and spending relatively large sums on clinical trials and drug development. The 3rd quartile value of 3.98x does show that at least 25% of the 22-member group has solid liquidity.
- The credit strong point of the sector is its median total liabilities to market cap of .46x. Algebraic rearrangement of this ratio shows that the implied asset value of the industry is 3.17x its liabilities.
- The combination of chronically weak liquidity and strong implied asset value coverage is a formula for M&A and consolidation.
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
