9 Of The 12 Largest American Cannabis MSOs Have A +50% Likelihood Of Going Bust

The most critical financial information on the health of a company is whether, or not, it has a Net Positive Operating Cash Flow; its Altman -Z Score; and the percentage probability that it could go bankrupt within the next 2 years (definitions at end of article). Below is a ranking, in descending order, of the 12 constituents in the munKNEE American Cannabis MSOs Index, according to data from macroaxis.com, as well as their stock performance year-to-date (February 24th):

Green Thumb (GTBIF): Up 1.1% YTD
- has a market capitalization of $2,010M;
- is the only MSO with a Positive Net Operating Cash Flow
- has a 10% Chance of Financial Distress within 2 years;
- has a 4.8 Altman Z-Score (companies with Z-Scores above 3.1 are generally considered to be stable and healthy with a low probability of bankruptcy);
- Read: Green Thumb Reports Record Revenue And Adjusted Operating EBITDA
  - Green Thumb Industries: Best Of Breed In U.S. Cannabis
Curaleaf (CURLF): Down 6.1% YTD
- has a market capitalization of $2,640M;
- has a 39% Chance of Financial Distress within 2 years;
- has a 3.6 Altman Z-Score.
- Read: Curaleaf Q3 Report Reveals 80% Decrease In Net Profit
  - Curaleaf: Former Leader In U.S. Cannabis Remains Buyable
Planet 13 (PLNHF): Up 27.5% YTD
- has a market capitalization of $194M;
- has a 46% Chance of Financial Distress within 2 years;
- has a 4.2 Altman Z-Score..
- Read: Planet 13 Financial Metrics In Q3 All Declined
  - Planet 13 Is Down But Not Out In The Cannabis Industry
Verano (VRNOF): Down 3.2% YTD
- has a market capitalization of $1,090M;
- has a 64% Chance of Financial Distress within 2 years;
- has a 1.8 Altman Z-Score.
- Read: Verano Q3 Financial Report Reveals Major Increase In Net Loss
  - Verano: A Top Cannabis Pick For 2023
TerrAscend (TRSSF): Up 54.5% YTD
- has a market capitalization of $402M ;
- has a 64% Chance of Financial Distress within 2 years;
- has a 1.8 Altman Z-Score.
- Read: TerrAscend Q3 Financial Report Reveals Major Declines In Income And EBITDA
  - TerrAscend Hopes The USA Can Provide A Future It Controls
Trulieve (TCNNF): Down 18.0% YTD
- has a market capitalization of
- has a 69% Chance of Financial Distress within 2 years;
- has a 1.2 Altman Z-Score.
- Read: Trulieve Cannabis Q3 Financials Were Down But Stock Price Jumps
  - Troubled Trulieve Is A Timely Buy
  - Cannabis Stocks Have Crashed: Trulieve Is A Gem In U.S. Cannabis
Jushi (JUSHF): Down 5.4% YTD
- has a market capitalization of $137M;
- has a 71% Chance of Financial Distress within 2 years;
- has a 0.6 Altman Z-Score.
- Read: Jushi Holdings Releases Mixed Preliminary Q3 Financials
  - Jushi Holdings: Still Trading At A Distressed Valuation
Columbia Care (CCHWF): Down 16.0% YTD
- has a market capitalization of $246M;
- has a 72% Chance of Financial Distress within 2 years;
- has a 0.6 Altman Z-Score (a score of less than 1 indicate a high probability of distress);.
- Read: Columbia Care Reports Third Quarter 2022 Results
  - Cannabis Company Columbia Care Is A Bargain
Ascend (AAWH): Up 10.8% YTD
- has a market capitalization of $161M;
- has a 74% Chance of Financial Distress within 2 years;
- has a 0.6 Altman Z-Score.
- Read: Ascend Wellness Q3 Report: Record Revenue, Adjusted Gross Profit, And EBITDA Margin
  - Ascend Wellness: Thriving Without New York
Cresco Labs (CRLBF): No Change YTD
- has a market capitalization of 716M;
- has a 76% Chance of Financial Distress within 2 years;
- has a 0.6 Altman Z-Score.
- Read: Cresco Labs Q3 Financials Show No Improvement Over Q2 Results
  - Cresco Labs: An Unloved U.S. Cannabis Multi-State Operator
Acreage (ACRDF/ACRHF): Up 18.3% YTD
- has a market capitalization of $130M;
- has a 80% Chance of Financial Distress within 2 years;
- has a 0.0 Altman Z-Score.
- Read: Acreage Reports Third Quarter 2022 Financial Results
  - Cresco Labs, Columbia Care M&A deal closure extended to June
Ayr (AYRWF): Down 4.1% YTD
- has a market capitalization of $81M;
- Chance of Financial Distress within 2 years: N/A;
- Altman Z-Score: N/A.
- Read: Ayr Wellness Q3 Financial Metrics All Show Major Improvements
  - Cannabis Is A Long-Term Play

The munKNEE American Cannabis MSO Stocks Index is now DOWN 2.99 % YTD. In comparison, the munKNEE Canadian Cannabis LP Stocks Index is now DOWN 2.96% YTD while the publicly traded AdvisorShares Pure US Cannabis ETF - which is 96% MSOs - is DOWN 5.2% YTD.

Below are the definitions for Positive Net Operating Cash Flow and the Altman Z-Score:

Positive Net Operating Cash Flow:
- is money coming in through sales minus operating expenses and a company doesn't survive without it. As such, it is the best measure of a company’s financial and operational health.
The Altman Z-Score:
- is a numerical measurement used to predict the chances of a business going bankrupt in the next two years compared to a company in a similar line of business and has an accuracy that ranges from 82% and 94%.
  - companies with Z-Scores above 3.1 are generally considered to be stable and healthy with a low probability of bankruptcy,
  - scores that fall between 1.8 and 3.1 lie in a so-called 'grey area' and
  - scores of less than 1 indicate a high probability of distress.

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