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 10/04/2024

Weekly Sector Credit – Agriculture Technology

  • The Ag Tech sector saw its first debt raise in quite a while this week with the $2.1M, four-year, 15% asset-based loan for Urban Gro.
  • The sector’s credit stats are beginning to improve.
  • Liquidity is still weak, with a median free cash flow adjusted current ratio of .34x, indicating that more than half of the 16 companies are likely to need to raise additional capital during the year in order to discharge their current liabilities.
  • The total liabilities to market cap ratio of 1.07x is encouraging. It is pretty low, showing market confidence in the staying power of most of the companies.
  • Similarly, the 2025 EBITDAR to adjusted net debt of .21x represents a 4.76x adjusted net debt/EBITDAR, which is higher than we would like to see but should be taken in context since the sector is generally not subject to 280e.
  • The sector still has a ways to go. Median cash flow is still negative, and the Altman Z score is still flashing bright red.
  • Despite the remaining weakness, we believe the sector is likely to be an indirect beneficiary of S3 as cultivation companies gain financial flexibility and growth capex is ramped upward.

Week ended 10/04/2024

Weekly Sector Credit – Agriculture Technology

  • The Ag Tech sector saw its first debt raise in quite a while this week with the $2.1M, four-year, 15% asset-based loan for Urban Gro.
  • The sector’s credit stats are beginning to improve.
  • Liquidity is still weak, with a median free cash flow adjusted current ratio of .34x, indicating that more than half of the 16 companies are likely to need to raise additional capital during the year in order to discharge their current liabilities.
  • The total liabilities to market cap ratio of 1.07x is encouraging. It is pretty low, showing market confidence in the staying power of most of the companies.
  • Similarly, the 2025 EBITDAR to adjusted net debt of .21x represents a 4.76x adjusted net debt/EBITDAR, which is higher than we would like to see but should be taken in context since the sector is generally not subject to 280e.
  • The sector still has a ways to go. Median cash flow is still negative, and the Altman Z score is still flashing bright red.
  • Despite the remaining weakness, we believe the sector is likely to be an indirect beneficiary of S3 as cultivation companies gain financial flexibility and growth capex is ramped upward.

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