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Total U.S. Cultivation & Retail sector capital raises are down 65% YTD, and Equity financing is down nearly 97%, from $1.96B to $61M. Debt financing has become critical, accounting for 93.9% of the total capital raised in the sector YTD.
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With the lack of credit ratings in the sector, credit scoring models like the Viridian Credit Tracker Model have become increasingly important. The Viridian Credit Tracker model uses a combination of 11 financial statement and market variables to discern four critical aspects of cannabis credit: Liquidity, Leverage, Profitability, and Size.
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Our model uses a combination of four different variables to compute a leverage score, and the most highly weighted of these variables is Total Liabilities / Market Capitalization.
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We focus on Total Liabilities as our measure instead of total debt because we believe it is crucial to include lease liabilities and tax liabilities.
