Money Marijuana companies, soaring in stock market, may tap bonds next

23:31  12 april  2017
23:31  12 april  2017 Source:   Bloomberg

As legalization looms, Canada’s volatile marijuana stocks are a risky bet

  As legalization looms, Canada’s volatile marijuana stocks are a risky bet As the timeline for legalization becomes clear, stocks in cannabis producers have jumped. But the sector remains a high-risk proposition for investorsOTCM

Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become more comfortable with the industry and the federal government gets set to legalize the drug by next year.

Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become. Shares in companies like Canopy Growth Corp., the first Canadian pot company with a market value of C billion (0 million) — making it a marijuana unicorn — have soared , and the

Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become more comfortable with the industry and the federal government gets set to legalize the drug by next year.

Quotes in the article

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A new way to bet on legal marijuana hits the TSX

  A new way to bet on legal marijuana hits the TSX A marijuana-themed exchange traded fund touted as the world's first launched on the Toronto Stock Exchange Wednesday morning, giving investors a new way to bet on legal marijuana stocks.MJNA

Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become more comfortable with the industry and the federal government gets set to legalize the drug by next year.

Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become more comfortable with the industry and the federal government gets set to legalize the drug by next year.

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“There would be an appetite for more traditional debt arrangements and, given that leading cannabis companies have significant assets now, this may be one direction that we see the market go in the future,” said Cam Battley, executive vice president of Aurora Cannabis Inc., a licensed marijuana producer in Mountain View County, Alberta. “I suspect we’re headed in that direction right now.”

Canadian marijuana companies have tapped capital markets to fund expansion plans amid expectations that Prime Minister Justin Trudeau’s government will unveil a proposed law as early as Thursday to set the stage for legalization in 2018. Shares in companies like Canopy Growth Corp., the first Canadian pot company with a market value of C$1 billion ($750 million) -- making it a marijuana unicorn -- have soared, and the company announced last week it will expand west by acquiring rTrees Producers Ltd. in Yorkton, Saskatchewan.

Top 5 Reasons 1 Marijuana Industry Expert Believes Cannabis Stocks Are Overvalued

  Top 5 Reasons 1 Marijuana Industry Expert Believes Cannabis Stocks Are Overvalued A report by a leading analyst on the marijuana industry is hinting at significant overvaluations at Canada's marijuana companies, including Canopy Growth Corp. (TSX:WEED), Aphria Inc. (TSX:APH), and Aurora Cannabis Inc. (TSXV:ACB).AMZN

Marijuana Companies , Soaring in Stock Market , May Tap Bonds Next (Bloomberg). New Book Pins Corporate Greed on Lust Bred at Harvard Business School (Dealbook). Tesla Investors Party Like It’s 1999 (Fortune).

Marijuana Companies , Soaring in Stock Market , May Tap Bonds Next (Bloomberg). New Book Pins Corporate Greed on Lust Bred at Harvard Business School (Dealbook). Tesla Investors Party Like It’s 1999 (Fortune).

Aurora announced the sale of C$75 million of 7 percent convertible debentures, debt that can be converted to equity at a specific price, in a private placement Tuesday. The sale was increased from an initial target of C$40 million and marks the company’s third convertible debt deal. It sold C$15 million with a 10 percent coupon in September and C$25 million of debentures with an 8 percent coupon in October.

Aurora will use the proceeds from the sale to fund its international expansion, which includes acquiring a 19.9 percent stake in the first Australian company to be licensed to research and cultivate medical marijuana, Battley said.

“With the change in social attitudes, people are looking at the cannabis sector with different eyes,” he said in a phone interview. “This is going to be a significant market going forward.”

Aurora shares fell 7.6 percent to C$3.04 at 3:07 p.m. in Toronto, after soaring 18 percent Monday. The company has jumped 33 percent this year, for a market value of C$969 million.


What’s Next for the Marijuana Industry After Trudeau’s Proposed Legislation? .
How will companies such as Canopy Growth Corp. (TSX:WEED) and Aprhia Inc. (TSX:APH) be impacted by the proposed recreational cannabis laws?With uncertainty surrounding how the retail sale of recreational cannabis will play out and the anticipated legalization date continually being prolonged, how will it impact major players like Canopy Growth Corp. (TSX:WEED) and Aphria Inc.

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