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 06/07/2024
Week ended 06/07/2024
Debt Commentary
Week ended 06/07/2024
- Debt accounted for 55% of trailing 8-week capital raises. The ratio may go if companies are able to utilize favorable regulatory-induced stock price increases to complete equity issues.
- The Week’s Debt Transactions
- On June 6, 2024, Acreage Holdings (ACRG.A.U: CSE) (ACRHF: OTCQX), an MSO with operations in Ohio, California, Maine, New Jersey, New York, and Connecticut, closed a $10M private placement of Non-Recourse Convertible Units.
- The notes have a fifteen-month maturity and carry no interest rate. They were issued at an original issue discount of 16.67%
- The notes are convertible at prices that adjust according to the price of Canopy Growth. The current conversion price is estimated to be approximately $.469 (a premium of about 42%)
- The units include 100% coverage of warrants with an exercise price equivalent to the conversion price. The warrants have a 5-year life.
- The OID, the conversion option, and the value of the warrants combine to produce a net bond price of 62.37 and an effective yield of 39.69%.
- Acreage improved five ranking slots in the Viridian Capital credit model this week because of several refinancing moves that eliminated the default on the company’s senior debt that had moved the $136M balance into short-term liabilities. Canopy bought the AFCG piece of the line for approximately $100M, including the freeing up of funds placed in an escrow account to back the loan. Viridescent amended its terms, eliminating defaults and reinstating the original 2026 maturity.
- The resolution of the default significantly improved Acreage’s liquidity rankings and produced a substantial uptick in our model rating.
- On June 5, 2024, X.S. Financial Inc. (XSF: CSE)(XSHLF: OTC), a provider of non-dilutive CAPEX and equipment financing solutions to the cannabis industry, upsized its Secured Credit Facility with Needham Bank by $16M.
- The facility carries a 9.5% interest rate and matures on 6/30/27.
- The borrowing base for the transaction includes between 65% and 75% of eligible lease receivables.
- The facility is prepayable at any time without penalty.
Week ended 06/07/2024
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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 06/07/2024
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 06/07/2024
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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.