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 09/27/2024

Weekly Sector Credit – Cultivation and Retail

  • The Sector Credit report now utilizes two new ratios: in leverage, our new 2025 EBITDAR / Net Adj Debt, and in profitability, our new 2024 EBITDAR to Revenues.
  • The median 2025 EBITDAR to adjusted debt of .34x, implies an adjusted debt to EBITDAR of 2.94x, which is right on the line of sustainability in a 280e environment. Companies will get a bit of leeway up to around 4x once 280e is gone, but in the meantime, this ratio says what we already knew: lots of cannabis cultivators and retailers are still over-leveraged.
  • The median 2024 EBITDAR to Revenues of 17.3% is relatively weak. You can view this as very similar to EBITDA margin, and high-performing companies are typically over 30%. This median is so low because we are blending all sizes and locations in this aggregation. The smallest Canadians to the largest MSOs are included, and what we can say is that at least half of the sector is still operating at EBITDA levels that probably don’t produce any actual after-tax, after-interest cash flow.

Week ended 09/27/2024

Weekly Sector Credit – Cultivation and Retail

  • The Sector Credit report now utilizes two new ratios: in leverage, our new 2025 EBITDAR / Net Adj Debt, and in profitability, our new 2024 EBITDAR to Revenues.
  • The median 2025 EBITDAR to adjusted debt of .34x, implies an adjusted debt to EBITDAR of 2.94x, which is right on the line of sustainability in a 280e environment. Companies will get a bit of leeway up to around 4x once 280e is gone, but in the meantime, this ratio says what we already knew: lots of cannabis cultivators and retailers are still over-leveraged.
  • The median 2024 EBITDAR to Revenues of 17.3% is relatively weak. You can view this as very similar to EBITDA margin, and high-performing companies are typically over 30%. This median is so low because we are blending all sizes and locations in this aggregation. The smallest Canadians to the largest MSOs are included, and what we can say is that at least half of the sector is still operating at EBITDA levels that probably don’t produce any actual after-tax, after-interest cash flow.

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