Frequently Asked Questions
Does CTrust immediately get displaced by traditional scoring post-federal legalization?
Federal and global legalization will be supported by CTrust’s scoring model as our solution will bolster financial services companies not currently working with cannabis businesses when they begin to do so.
How does the CTrust CTS impact interest rate on a loan?
The CTS Score can positively or negatively impact the interest rate on a loan. The CTS Score is an analysis of the business operations as a whole which translates into bands of risk for a lender. For a graphical representation of the relationship.
What is CTS?
Cannabis Trust Score (CTS) is a tool for lenders and borrowers to assess risk, and structure debt on a variable rate basis, aligning both lenders and borrowers’ risk with cost of capital.
How is CTS calculated? What does it score?
The CTS score is a cannabis specific credit worthiness score ranging from 200-800. CTS is an indicator of overall business credit worthiness. The score is calculated by analyzing 150 variables across 8 key categories.
What are the 8 key categories that the CTS Score analyzes?
Market, business operation, management, financial performance, governance, products and
services, brand, IP.
How often is the CTS Score updated?
The CTS Score is updated 17 times a year.
How does CTS compare to other risk indicators and processes?
The CTS Score is a credit scoring system designed specifically for the cannabis industry. Unlike other business risk indicators that primarily focus on financial behavior, the CTS Score considers a broader range of internal and external factors that may impact a cannabis business.
What is the CTS Confidence tier?
Confidence tiers serve the purpose of allowing lenders and borrowers to understand the explanatory power of a calculated CTS. There are 3 different tiers in total, where the lower the tier, the higher the confidence.
How is CTS Confidence Score calculated?
Tier 3 – Unverified Self-Assessment (CTS IQ)
Tier 2 – Verified by Reviewing Applicant’s Uploaded Documents
Tier 1 – Verified by Review of All Records and Physical Inspection of Applicant’s Facilities.
How does CTS link to interest rates?
A business’s CTS score has a direct impact on the interest rates it is offered. A higher CTS score indicates a lower risk and results in a lower interest rate, while a lower CTS score indicates a higher risk and results in a higher interest rate.
How is data/information collected for CTS Report?
CTrust collects data for the CTS Score from various sources, including the initial questionnaire, ongoing borrower questionnaires, direct API access to key business operations, and data import and aggregation.
How will CTS continue to be refined and updated?
The CTS Report is a dynamic tool that is regularly refined and updated to reflect the changing landscape of the cannabis industry. CTrust is committed to adding additional variables across the eight key categories as the industry evolves.
What is the ASC Model?
The Asset-Structure-Character (ASC) model allows CTrust to quantify the categories that are being taken into consideration when calculating the CTS. Consequently, each factor in the formula is assigned one of the categories (Asset, Structure, Character).
What is the weight distribution of each category in the ASC model?
The pie chart included below, visually represents those weights in the context of the CTS formula. Of course, with future developments of the CTS, the weights assigned to each category may shift.
