CTrust Company Profile

Background

CTrust, established in 2022, is the pioneering credit rating and risk monitoring agency dedicated exclusively to the cannabis industry. The company's mission is to enhance operational and financial transparency for cannabis-related businesses (CRBs), thereby reducing investment risks and facilitating better access to capital. By providing standardized and trusted risk assessment tools, CTrust aims to foster a more balanced and mature cannabis capital market.

Key Strategic Focus

CTrust's strategic focus centers on delivering comprehensive credit evaluation and risk monitoring services tailored specifically for the cannabis sector. The company's core objectives include:

Development of the Cannabis Trust Score (CTS): A proprietary credit scoring system that assesses the financial health and credit risk of state-licensed CRBs.

Evaluation, Scoring, and Monitoring (ESM) Services: A bundled solution that audits all aspects of a business's operational and financial performance, assigns a creditworthiness score, and provides a roadmap for improvement.

Trust Services: Offering tools and systems necessary for operational and financial restructuring, as well as viable liquidation efforts if necessary.

By focusing on these areas, CTrust addresses the unique challenges faced by CRBs, such as limited access to traditional financing and the absence of standardized risk assessment tools.

Financials and Funding

As of November 2022, CTrust was self-funded and announced plans to open an initial $12 million investment round. The funds raised are intended to fuel the company's national and global outreach as the only cannabis business credit scoring agency and to facilitate the integration of operations and systems of the organizations coming together to form CTrust.

Pipeline Development

CTrust's primary product, the Cannabis Trust Score (CTS), was launched in beta in July 2024. The CTS and Report provide a credit score with detailed insights into the financial health and credit risk of state-licensed CRBs. During the 2024 beta program, a limited number of financial institutions that enroll early received free access to CTrust’s platform to draw CTS and Reports for their existing depository accounts. State-licensed CRBs were also able to apply for a free Cannabis Trust Score during the beta program.

Technological Platform and Innovation

CTrust differentiates itself through its proprietary technologies and innovative methodologies:

Proprietary Algorithm: The CTS utilizes a proprietary algorithm that incorporates data from more than 1,700 correlation points across 42 unique business categories. This data is distilled into a recognizable and easy-to-understand score on a scale of 200 to 800.

Data Sourcing Triangulation: The system employs data sourcing triangulation benchmarked to a Kappa Index, ensuring the reliability and accuracy of the credit scores.

Integration with Industry Data: The CTS incorporates data from Metrc track-and-trace systems, point-of-sale (POS) software, company structure documents, and third-party market data, providing a comprehensive risk assessment.

Leadership Team

CTrust's leadership team comprises seasoned professionals with extensive experience in finance, technology, and the cannabis industry:

Giadha A. DeCarcer, CEO: A seasoned tech innovator and successful serial entrepreneur, DeCarcer founded and led New Frontier Data from 2014 to 2021. She brings extensive experience in financial technology and the cannabis industry to CTrust.

Robert Hoban, Chairman of the Board: A long-time cannabis industry veteran and attorney, Hoban co-founded Clark Hill Law’s cannabis industry practice group and has been instrumental in structuring and drafting cannabis regulations in the United States and internationally.

Dotan Y. Melech, COO: A former federal bankruptcy trustee and pioneer in cannabis receiverships, Melech led the largest receivership in the history of the cannabis industry. He is committed to creating better alternatives for cannabis businesses and creditors.

Leadership Changes

In November 2022, Giadha A. DeCarcer was appointed CEO of CTrust after eight years of founding and leading New Frontier Data. Her appointment marked a significant leadership change aimed at leveraging her expertise to drive CTrust's mission forward.

Competitor Profile

Market Insights and Dynamics

The cannabis industry has faced challenges in accessing traditional financing due to regulatory complexities and the absence of standardized risk assessment tools. CTrust's introduction of the Cannabis Trust Score addresses this gap, providing a technology and data-driven approach to evaluating lending risk.

Competitor Analysis

As the first and only cannabis business credit scoring and risk monitoring agency, CTrust currently faces limited direct competition. However, traditional financial institutions and credit agencies may develop similar tools as the cannabis industry continues to mature and regulatory landscapes evolve.

Strategic Collaborations and Partnerships

CTrust has engaged with financial institutions, investors, and cannabis business owners during its beta launch to refine its credit scoring platform. The company has also collaborated with industry experts to develop its proprietary algorithm and data integration methodologies.

Operational Insights

CTrust's distinct competitive advantage lies in its specialized focus on the cannabis industry, proprietary credit scoring system, and comprehensive risk assessment tools. By addressing the unique challenges faced by CRBs, CTrust positions itself as a critical player in facilitating access to capital and promoting financial transparency within the industry.

Strategic Opportunities and Future Directions

CTrust's strategic roadmap includes expanding its credit scoring services to a broader range of financial institutions and CRBs, enhancing its technological platform with advanced analytics and machine learning capabilities, and exploring international markets as cannabis legalization progresses globally. By leveraging its current strengths and addressing the evolving needs of the cannabis industry, CTrust aims to solidify its position as the leading credit rating and risk monitoring agency in this sector.