Public vs. Private Cap Raises: Of the 6 capital raises, 4 were closed by public companies. So far in 2020, public companies have accounted for 82% of all capital raises, vs. 68% for the same period in 2019. In 2020, public companies have accounted for 88% of total dollars raised, vs. 68% for the same period in 2019. Cannabis stock prices have drifted without clear direction since June, but earnings releases have continued to show stable revenues and profitability despite the COVID weakened economy, spurring improved capital markets confidence in the sector and increased equity and debt financing volume.
Public Company Listings: Of the 4 public company capital raises, all 4 are listed in Canada on the CSE and all 4 are also U.S. listed on the OTC.
Equity vs. Debt Cap Raises: Equity-based capital raises accounted for 4 of the 6 transactions but only 36% of the proceeds raised. Debt financing has slowed as investors have become increasingly focused on companies’ ability to service debt through internal cash flow but appears to be resurging based on strong reported operating results.
Largest Equity Raise: Conception Nurseries, (Private), a leading provider of tissue culture technology to the cannabis industry, announced that it raised US$12 million in a Series A funding round led by Viridian Capital, bringing the company’s total funds raised to US$15 million. Conception expects to become the largest cannabis plant provider on the West Coast and is ramping up to become one of the largest green market cannabis clone producers in the industry. Conception plans to launch its next facility in Massachusetts with construction scheduled to begin in late 2020.
Cap Raises by Sector: The 3 of the 6 capital raises occurred in the Investments/M&A sector, 2 in the Cultivation & Retail sector, and 1 in Agriculture Technology sector.
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