OUR 9TH YEAR OF PROVIDING PROPRIETARY CAPITAL MARKETS INTELLIGENCE ON THE CANNABIS / HEMP / PSYCHEDELIC SECTORS
Debt Capital Raises
Debt Transaction Chart
Viridian publishes weekly data and analysis on debt capital raises in the Cannabis/CBD/Psychedelic industries. This data includes information about the company issuing debt (public/private, state/country location), deal size, deal structure, pricing, warrants, and credit data.
Week ended 11/03/2023
Week ended 11/03/2023
Debt Commentary
Week ended 11/03/2023
- Debt accounted for 46% of trailing 8-week capital raises, nearly unchanged from last week. The ratio may stay lower than trend line levels as companies use favorable regulatory news to issue equity.
- The Week’s Most Interesting Closed Debt Issues
- On October 30, 2023, Greenway Greenhouse Cannabis Corp (GWAY: CSE)(GWAYF: OTC), a Canadian cultivator of high-quality greenhouse cannabis, completed a $2.53M private placement of convertible securities.
- The secured convertible debentures have a five-year maturity and a 13% coupon payable 10% in cash and 3% in the company’s common shares.
- The conversion price of $.14 is only a 3.3% premium over the stock’s closing price at issuance, making the conversion option quite valuable. The high coupon and low conversion premium combine to create an effective cost of 24.75%.
- The chart below shows that the company ranks seventh out of 14 Canadian cultivation and retail companies with market caps between $10M and $100M. The current issue is not large enough to fix Greenway’s challenging liquidity picture with a free cash flow adjusted current ratio of only .87x proforma for the new convertible. The company’s leverage, profitability, and size are all middle-of-the-pack metrics. Given its ranking, We view the current issue’s effective cost as higher than we would have expected. The low liquidity indicates the company may need additional financing relatively soon.
Week ended 11/03/2023
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Weekly Credit Tracker
Each week, Viridian highlights a specific industry sector and provides a deep dive into credit metrics and comparable company credit rankings for public companies operating in that 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 11/03/2023
This week’s credit tracker focuses on the 7 Canadian Cultivation & Retail sector companies with market caps between $50M and $500M in the Viridian Value Tracker database in order to make the case that Auxly had a good reason to sell assets, even at prices significantly below its cost: The firm is over levered and needs to sell assets to reduce debt. The Viridian Credit tracker ranking system shows Auxly near the bottom of the peer group in terms of credit quality.
- Week ended 11/03/2023
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Additional content is available to Premium and Enterprise users. Please purchase a higher tier membership to see more.
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
Viridian publishes weekly insights on debt capital raises in the Cannabis/CBD/Psychedelic industries. These insights typically highlight the most interesting/meaningful debt transactions of that week, and commentary on market conditions, debt deal structures, and lenders.