Viridian Chart Of The Week: Cannabis Debt Financing Is Booming Across The U.S.

• Unlike equity capital raises which are sharply lower in 2020, debt raises increased from $423M to $563M to $940M in 2018, 2019 and YTD 2020 respectively.

• Like M&A, debt has moved eastward. California, Colorado, Oregon, and Washington jointly made up 34.5% of 2018 debt but only 5.4% of 2020’s debt.  Illinois, Massachusetts and New York accounted for 93.0% of 2020 debt issuance.

• The average size of issues is going up from $10.0M in 2018 to $13.7M in 2019 to $55.3M in 2020.

• The market has become focused on the larger players. Curaleaf ($300M), Leaflink($250M) , and Cresco ($175M) jointly made up 77.1% of 2020 debt issuance. Aside from these three names, the average issues size drops to approximately $16.5 million.

• Viridian expects significant increases in debt issuance as the large MSOs build out new rec states employing the borrowing power of their burgeoning cash flow.

The Viridian Cannabis Deal Tracker is a proprietary information service that monitors capital raise and M&A activity in the legal cannabis and hemp industry. Each week the Tracker aggregates and analyzed all closed deals and segments each according to key metrics:

• Industry Sector (one of 12 sectors, from Cultivation to Brands)

• Dollar value of the transaction

• Region in which the deal occurred (country or U.S. state)

• Status of the company announcing the transaction (Public vs. Private)

• Deal structure (equity vs. debt)

• Key deal terms (Pricing and Valuation)

The Viridian Cannabis Deal Tracker provides the market intelligence that cannabis companies, investors, and acquirers utilize to make informed decisions regarding capital allocation and M&A strategy.

Since its inception in 2015, the Viridian Cannabis Deal Tracker has tracked and analyzed more than 2,500 capital raises and 1,000 M&A transactions totaling over $50 billion in aggregate value.

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  Photo by Javier Hasse.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.