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 11/08/2024
Week ended 11/08/2024
Debt Commentary
Week ended 11/08/2024
- Debt accounted for 92% of trailing 8-week capital raises. The ratio may go down if companies are able to utilize favorable regulatory-induced stock price increases to complete equity issues. However, equity pricing has remained stubbornly low while the cannabis debt capital markets have reopened.
- The Week’s Debt Transactions
- On October 6, 2024, Curaleaf Holdings (CURA: TSX)(CURLF: OTCQX) closed on a $40M secured revolving credit facility with a significant regional commercial bank
- The credit line is available to be drawn down as needed for general corporate purposes and working capital.
- The loan has a two-year maturity and a 7.99% fixed interest rate. The facility is essentially a bridge loan to tide the company over until it receives an expected $2.5M in contingent payments associated with the sale of its Ohio properties.
- The Viridian Capital Credit Tracker model ranks CURA at #6/31 in our weekly screening. The company’s weak balance sheet liquidity, as is evidenced by its annualized free cash flow adjusted current ratio of .65x, is mitigated by the availability it has under the current revolver. Curaleaf ranks #8/31 on leverage, aided by its #8 ranking on 2025 estimated EBIDAR/ Net adjusted debt, and Curaleaf ties with GTI for #1 in size.
- The pricing of the secured revolver is aggressive. We believe GTI is a superior credit to CURA, and GTI is priced at 500 bps over SOFR, which swapped into around a 9% fixed rate at issuance. Similarly, Cresco is ranked better than CURA in the Viridian Credit model, and yet it is priced nearly 400 basis points higher. The pricing of the revolver is indicative of the super aggressive bank deals we have seen, in which commercial banks are not only pricing on credit quality but for the benefit of depository relationships, etc.
Week ended 11/08/2024
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 11/08/2024
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 11/08/2024
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.