Information from Viridian Capital Advisors, LLC – www.viridianca.com
April 4, 2024- The week’s most prominent debt deal was the $34M debt deal completed by Florida-based Sunburn LLC with AFC Gamma. Sunburn is private, and its financials are not available, but this week’s credit screen looks at the nine MSOs with Florida presence and ranks them in terms of credit quality. The ordering at the top will surprise few observers, with GTI, Trulieve, Planet 13, and Verano taking the top four slots.
Perhaps more controversial, the bottom four in decreasing order of credit quality are Cresco, Cansortium, AYR, and Cannabist. Cannabist is the worst-ranked credit based on our multivariable leverage ranking. It has the worst Liabilities / Market cap, the second worst liabilities to assets, the second worst annualized funds from operation/liabilities, and the worst 2023 EBITDA/ Liabilities. The bottom leverage ranking combined with the lowest profitability rating and a seventh-place size rating secures Cannabist a bottom rank. Cansortium vs AYR is a more challenging call, but our model gives the nod to Cansortium based on its lower leverage and better profitability. AYR has better size (and diversification) and liquidity. Our credit scoring has the two within a single point of each other.
Which company gives the best bang for the buck as a Florida investment? Our top three are Planet 13, Cansortium, and AYR, based on an indicator that takes the torque in Florida divided by the credit rank. Cansortium and AYR have much higher Florida torque (as measured by the number of FL stores/Enterprise value) but significantly more credit risk. Timing-wise, though, we see the Florida vote coming up sooner than any likely credit event for either of the two companies and would emphasize the Florida torque.
View the Viridian Credit Tracker for a full analysis of our credit rankings and statistics for the cannabis industry
About Viridian Capital Advisors, LLC
Launched in 2014, Viridian Capital Advisors was one of the first and now leading, corporate finance, advisory and M&A practices in the legal Cannabis/CBD industries, and now in the Psychedelics sector. We represent companies, investors, lenders, buyers and sellers. Our advisory practice is meant to help “institutionalize” our clients before they go to market for capital or M&A – by helping to build a professional Board of Directors, sophisticated financial models and valuation analyses, exit strategies and strategic advisory services. Our investment banking practice raises capital and executes M&A transactions through our New York City based broker-dealer, Bradley Woods & Co. Ltd.
Viridian is widely recognized as the industry leader in research and capital markets data/market intelligence through the Viridian Deal Tracker. Launched in January 2015, the Viridian Deal Tracker is a proprietary data service that monitors and analyzes investment, M&A activity and capital markets trends in the Cannabis, Hemp and Psychedelics industries. We’ve tracked and analyzed more than 6,500 transactions totaling more than $70 billion in transaction value. We know where equity investors invest, where lenders lend and where acquirers acquire. The Deal Tracker is received and read every day by thousands of leading industry players on a global basis, becoming a trusted and valuable source for companies, investors, lenders and sellers/acquirers to make informed capital allocation decisions.
Marijuana remains illegal under federal law. The federal government does not recognize marijuana to have any medicinal value. Marijuana cultivation, possession, consumption, sales, and distribution are illegal under federal laws and also certain state laws. Investors in cannabis may be subject to law enforcement actions. Please note that there are differences in marijuana laws from one state to another. Furthermore there are substantial risks associated with investing in cannabis companies, including, without limitation, changes in laws, rules, and regulations, risks associated with the economy, capital markets, and a company’s ability to execute on its business plan.
