Chart Of The Week: Cannabis Debt Volumes Are Increasing And Costs Are Declining
Debt issuance for the U.S. Cultivation & Retail sector in H2:24 is already ahead of any period since H2:22. With the additional financing expected for the remainder of the year, issuance should top all periods except the second half of 2021 and the first half of 2022.
The large majority of H2:24 debt issuance has been refinancing activity, including Ascend (OTC: AAWH), Jushi (OTC: JUSHF), and Terrascend
(OTC: TSNDF). Each of these was priced at attractive rates despite all of them having tax-adjusted net debt well above 3x Debt/EBITDA. Debt investors are willing to believe 280e relief is on the way.
The dark green bars on the graph depict the dollar amount of debt issuance on which sufficient data is available to calculate the effective cost. The light green bars represent the issuance where insufficient data was available. The blue bar in H2:24 depicts the additional refinancing activity we believe is likely for the remainder of the year, composed mainly of Green Thumb (OTC: GTII) and Curaleaf (OTC: CURA) maturities. The red line shows the dollar-weighted average …