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 11/25/2022
Week ended 11/25/2022
Debt Commentary
Week ended 11/25/2022
- Debt accounted for 45% of trailing 4-week capital raises. We expect this ratio to be volatile because of the limited capital raise activity but average above 50%. This week Jushi (JUSHF: OTC) announced a $65M debt refinancing ahead of its January 2023 maturities. We will follow this transaction more closely when it closes and all pertinent detail becomes available. Jushi will join TerrAscend (TER: CSE), Verano (VRNO: CSE), Acreage (ACRG.U: CSE), and Red White & Bloom (RWB: CSE) in completing necessary refinancings. Several smaller tier 2 and tier 3 companies have upcoming financing needs that we believe will spur an increase in debt financing.
The Week’s Largest Debt Raise:
- On November 21, 2022, Empower Clinics (CBDT: CSE)(EPWCF: OTCQB), a $12M market cap Canadian integrated healthcare company, announced the closing of a $0.186M private placement of Secured Convertible Units.
-
- The units include 20,000 warrants per $1000 face amount of debentures with two-year maturities and exercise prices of US$0.056 per share (a 50% premium and 150% coverage)
- The debentures have a 10% interest rate, mature on November 21, 2024, and are convertible at approximately US$0.037 per share (a 0.5% premium)
- The low conversion premium and high warrant coverage make this a costly transaction. We estimate an effective cost of approximately 27.8%. The high cost is not surprising given that Empower ranks as the worst credit out of the 20 Canadian companies we track, with market caps between $10M and $50M. The Viridian Credit Tracker shows the company ranking at or close to the bottom on each of the four credit factors of liquidity, leverage profitability, and size
-
Week ended 11/25/2022
Additional content is available to Premium and Enterprise users. Please purchase a higher tier membership to see more.
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 11/25/2022
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 11/25/2022
This Chart is Only Available to Higher Tier Memberships
Please Purchase a Premium or Enterprise membership to see more.
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.