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 08/02/2024
Week ended 08/02/2024
Debt Commentary
Week ended 08/02/2024
- Debt accounted for 67% of trailing 8-week capital raises, up sharply from last week due to the Ascend Wellness (AAWH: CSE) refinancing. The ratio may go down if companies are able to utilize favorable regulatory-induced stock price increases to complete equity issues.
- The Week’s Debt Transactions
- On August 2, 2024, TerrAscend (TSND: TSX), the seventh largest U.S. MSO by market cap, closed a $140M Senior Secured Term loan.
- The four-year debt carries a 12.75% coupon with no equity kickers or OID. We view this as exceptional execution.
- TerrAscend gained two ranks in the Viridian Credit Tracker model to #12 as the refinancing largely cures liquidity issues. Despite this gain, based on our analysis of the credit, we thought the yield might be closer to the 14.24% effective yield on the recent Ascend issue.
- Proceeds will primarily refinance debt maturing in 2024.
- FocusedGrowth Asset Management was the lender.
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- On July 31, 2024, Jushi Holdings (JUSH: CSE)(JUSHF: OTCPK) closed on a $48.5M refinancing of its 1st priority debt.
- The issue has a 2-point OID, a 12.25% coupon, and a 40% warrant coverage of five-year warrants with an exercise price of $1 (approximately 75% premium)
- The combination of OID and long but high-premium warrants brought the total effective cost of the issue to 14.88%. The company’s 2nd priority debt has been offered at around 21% recently, making this look like another excellent execution.
- Jushi currently ranks #16/31 on the Viridian Capital Credit Tracker model. Its two significant bets, Virginia and Pennsylvania, have been stalled at the altar of adult rec, leaving the company with no dramatic growth catalysts. Pennsylvania is not quite dead for the year, though, so it bears close watching.
Week ended 08/02/2024
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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 08/02/2024
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 08/02/2024
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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.