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 12/16/2022
Week ended 12/16/2022
Debt Commentary
Week ended 12/16/2022
- Debt accounted for 91% of trailing 4-week capital raises. We expect this ratio to be volatile because of the limited capital raise activity. Still, we expect it to average well over 50%, especially since many companies are trading at or close to their 52-week lows.
The Week’s Largest Debt Raise:
- On December 15, 2022, BioHarvest Sciences (BHSC: CSE)(CNVCFL: OTC), the owner and developer of a patent-protected BioFarming technology capable of producing active plant ingredients without the necessity of growing the plant itself, closed the third and final tranche of convertible notes. The total of the three tranches was $7.4M.
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- The notes bear interest at 9.0% and mature on 12/15/2024.
- The notes are convertible at conversion prices which start at C$0.32 and escalate to C$0.44 if the Notes have not been converted before 180 days after issuance.
- The notes are convertible at 75% of the stock price with a floor of C$0.26 if not converted prior to a year after issuance.
- The effective cost of the transaction is quite sensitive to the exercise price. At the floor price of C$.26, the effective cost is 35.4%, whereas using the current conversion price of C$.32 gives an effective cost of 21.3%. This range strikes us as appropriate for a small, fast-growing (expected 3x revenue growth in 2023) but still cash flow negative company with promising new technology.
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Week ended 12/16/2022
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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 12/16/2022
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 12/16/2022
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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.