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 02/21/2025
Week ended 02/21/2025
Debt Commentary
Week ended 02/21/2025
- Debt accounted for 59% of trailing 8-week capital raises primarily because of the significant VIREO stock issue. 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
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- On February 18, 2025, Jushi Holdings (JUSHF: OTCQX) closed on a private placement of $5.1M of its 12% Second Priority Senior secured notes due 12/7/2026
- The notes have two features which materially increase the effective cost of the issue:
- They are issued with an original issue discount (OID) of 10%
- They are issued with an accompanying 8.6M, five-year warrants with a strike price of between $.45 and $.50. The warrants (coverage of around 80%) with premiums of approximately 48% and long maturities are pretty valuable at approximately 10.7 points of bond value.
- The OID and warrants produce an estimated effective cost of 26.9%.
- Insiders primarily purchased the issue. James Cacioppa, the CEO, Chairman, and founder, bought $3.3M (71.7%) of the deal and received up to 6.2M warrants. Denis Arsenault, a Founder and significant equity holder, purchased C$2M and received approximately 2.4M warrants. The insider nature of the deal necessitated the approval of a special committee of the board of directors, including all independent directors.
- The obvious question is why the issue was sold to insiders. Does it represent a show of support for the company? Or does it show the difficulty of raising outside capital, albeit secured debt, for a company that faces significant maturity pressure in 2026?
- Alongside the deal discussed above, Jushi also did an innovative factoring of $6.0M of ERC tax refund claims for proceeds of $5.1M.
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Week ended 02/21/2025
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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 02/21/2025
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 02/21/2025
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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.