Cannabis Chart Of The Week: Who Are The Strongest MSO Credits And How Are They Trending?
Portfolio Pulse from Viridian Capital Advisors
The Viridian Credit Tracker model shows that credit quality in the cannabis industry has declined due to increased leverage from debt financing and rising interest rates. Trulieve (TCNNF) and TerrAscend (TRSSF) have improved their credit rankings, while MariMed (MRMD) and Vext (VEXTF) have seen declines. The model assesses credit quality based on liquidity, leverage, profitability, and size, and tracks capital raise and M&A activity in the cannabis sector. Companies that manage cash flow and credit quality effectively are expected to benefit from future market upswings.
December 11, 2023 | 7:02 pm
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NEGATIVE IMPACT
MariMed's credit ranking has fallen from #2 to #9 after missing EBITDA estimates in Q3 and experiencing declines in leverage and profitability rankings.
MariMed's decline in credit ranking and missed EBITDA estimates could negatively impact investor confidence and its stock price in the short term.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
Vext's credit ranking has dropped from 4th to 13th due to a significant miss in Q3 EBITDA and a decrease in profitability ranking, despite strong liquidity and leverage.
Vext's sharp decline in profitability and credit ranking, despite its liquidity, suggests potential short-term negative impact on its stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70
POSITIVE IMPACT
Trulieve has improved its credit ranking from #8 to #2, showing strong free cash flow in Q3 and proactive management of debt. The company's exit from unprofitable markets and potential gains from Florida's market are positive signs.
Trulieve's improved ranking and strong Q3 performance, along with strategic exits from unprofitable markets, suggest a positive short-term impact on its stock as it indicates good financial health and management.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
TerrAscend's credit ranking has risen from 14th to 8th, with significant improvements in profitability and leverage indicators. Its strong position in Maryland contributes to this positive trend.
TerrAscend's improved profitability and leverage rankings indicate a healthier financial state, which could lead to a positive short-term impact on its stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70