The publicly-traded Canadian marijuana companies on our list have announced large financings over the past month
SmallCapPower | November 22, 2017: The stocks on our list represent four of the largest Canadian marijuana companies. These four companies have announced or closed financings worth ~$540 million. The financings have been followed by increased M&A activity in the sector, as Aurora Cannabis announced its intention to launch a takeover bid for CanniMed Therapeutics. The takeover attempt was announced on November 20, and proposed an offer price of $24 per share, a 57% premium to its prior closing price. According to a report by EY, more consolidation is expected in the industry, as the consulting firm believes that the marijuana sector in Canada will be dominated by a few large players in the coming years.
Canopy Growth Corp. (TSX:WEED) – $18.59
As Canada’s largest publicly-traded cannabis company, Canopy Growth owns and operates a number of facilities that comprise approximately 500,000 square feet. In addition, the Company owns a variety of diverse brands that include Tweed and Bedrocan.
The Company announced a $245 million equity financing with Constellation Brands Inc. (NYSE:STZ) in exchange for 18.9M shares, or 9.9% of the Company. In addition, Constellation received 18.9M purchase warrants, which could increase its stake in Canopy to 20%.
- Market Cap: $3,553 Million
- Month over Month Return: 45.7%
- Average Daily Volume – 30 days: 5,900,000
- Average Daily Volume – 90 Days: 3,375,000
Aurora Cannabis Inc. (TSX:ACB) – $5.85
Aurora Cannabis is a licensed producer and seller of medical marijuana and cannabis oil under the ACMPR. Aurora sells its products over the phone, online or through its mobile app and offers a delivery service to its customers. Currently, the Company is engaged in the construction of its new 800,000 square foot production facility in Alberta called Aurora Sky.
On November 16, Aurora announced a $100M financing in exchange for 100K special warrants at a price of $1,000 per warrant. The warrants are automatically exercisable into unsecured convertible debentures with a face value of $1,000 each at a 6% coupon maturing in five years. In addition, the debentures are exercisable into common shares at $6.50 per share.
- Market Cap: $2,351 Million
- Month over Month Return: 107.4%
- Average Daily Volume – 30 days: 11,760,000
- Average Daily Volume – 90 Days: 5,430,000
MedReleaf Corp. (TSX:LEAF) – $16.09
MedReleaf is a Licensed Producer of medical marijuana under the ACMPR. With a focus on R&D, MedReleaf aims to provide high-quality products for its patients. The Company operates two facilities in Ontario, which comprise a total 265,000 square feet.
On November 14, MedReleaf announced a $100.5M bought deal financing, in exchange for 6.1M shares at $16.55 per share.
- Market Cap: $1,463 Million
- Month over Month Return: 46.3%
- Average Daily Volume – 30 days: 288,000
- Average Daily Volume – 90 Days: 163,000
Aphria Inc. (TSX:APH) – $8.89
Aphria is a licensed producer and supplier of medical marijuana under the ACMPR. The Company operates a production facility in Canada, and invests in marijuana businesses across North America. Aphria’s flagship greenhouse production facility is located on a 169-acre property in Leamington, Ontario.
On November 7, Aphria closed a $92M bought deal financing in exchange for 12.7M shares priced at $7.25 per share.
- Market Cap: $1,348 Million
- Month over Month Return: 28.1%
- Average Daily Volume – 30 days: 2,410,000
- Average Daily Volume – 90 Days: 1,910,000
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own units in any of the companies mentioned above.
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