The Canadian marijuana stocks on our list have low cash balances and negative free cash flows, and will likely need to raise equity sometime soon
SmallCapPower | October 24, 2017: As marijuana producers across Canada ramp up production efforts ahead of legalization expected in 2018, high CAPEX and low sales are increasingly common. Today, we have identified three Canadian marijuana stocks that have low cash balances and negative free cash flows during the last quarter of operations, which could lead to an equity/debt raise in the near future.
ICC International Cannabis Corp. (TSXV:ICC) – $1.04
Pharmaceuticals
ICC International Cannabis Corp is a Canada-based licensed cannabis producer and seller. ICC owns and operates a production facility in Uruguay, where it is the region’s largest licensed producer. Furthermore, the Company is constructing a 16,000 square foot laboratory in Uruguay, which is expected to be ready by April 2018.
- Market Cap: $118 Million
- Free Cash Flow: – $3.81 Million
- Cash and Short-Term Investments: $2.7 Million
- Quarter Ended: June 30, 2017
Valens Groworks Corp. (CSE:VGW) – $1.00
Biotechnology & Medical Research
Valens Groworks Corp is a Vancouver based medical marijuana producer. The Company has a research and development facility and a licensed production facility, both of which are situated in Okanagan Valley, British Columbia. Although, the Company has already raised ~ $4.5 million since its last earnings release, approximately $3 million of that money will be used towards repayment of a loan. Therefore, Valens may need to raise further capital over the coming months as it plans to expand its production facility to 38,000 square feet.
- Market Cap: $60 Million
- Free Cash Flow: – $1.4 Million
- Cash and Short-Term Investments: $0.335 Million
- Quarter Ended: May 31, 2017
Tetra Bio Pharma Inc. (TSXV:TBP) – $0.69
Pharmaceuticals
Tetra Bio Pharma Inc is a Canada-based company that develops cannabinoid-based biopharmaceutical products. The Company has applied for a license to produce medical marijuana under the Access to Cannabis for Medical Purposes Regulation and is undergoing trials for its medical marijuana products.
- Market Cap: $81 Million
- Free Cash Flow: – $2.13 Million
- Cash and Short-Term Investments: $2.7 Million
- Quarter Ended: May 31, 2017
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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