48North Cannabis Corp. (TSXV:NRTH), one of the Canadian marijuana stocks, said it has received a $3 million investment from Canopy Growth Corporation (TSX:WEED)
SmallCapPower | February 7, 2019: 48North Cannabis Corp. (TSXV:NRTH), one of the Canadian cannabis stocks, Wednesday announced the completion of a $10 million private placement, $3.0 million of which was from Canopy Growth Corporation (TSX:WEED). 48North Cannabis also received a $7.05 million investment from a U.S.-based private fund, which elected to subscribe for Common Units in lieu of the previously-announced Preferred Unit offering. Under the terms, 48North Cannabis will issue 9.39 million Common Units at $0.75 per Common Unit to the U.S.-based fund, representing 7.7% of the Company’s issued and outstanding shares. Each Unit comprises one Common Share and one quarter Common Share Purchase Warrant at $1.15 over a period of 12 months. In December 2018, 48North Cannabis had issued 4.0 million Common Units to Canopy Growth at $0.75 per unit for a 3% stake. Combined, these two companies now own 10.7% of 48North Cannabis.
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Completion of the private placement is a significant milestone for 48North, providing necessary capital the development of its 100-acre outdoor farm and large-scale extraction capabilities as well as development of cannabis products. Expected to be completed in 2019 with a license expected in June 2019, the farm will have production capacity of 40,000 kgs of dried cannabis per annum. In addition, 48North Cannabis operates two indoor-licensed cannabis production sites in Ontario, with expected production capacity of 5,000 kg in 2019.
48North Cannabis generated its first revenues of $1.3 million for Q1 2019 ending September 2018, selling cannabis to other licensed producers. With production expected to ramp up significantly, the Company’s revenues could grow multifold in the coming quarters.
Shares of 48North Cannabis closed marginally (1.4%) higher following the announcement on Wednesday. 48North currently trades at a market cap of $81.2 million.
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