All dried up: How Bay Street cashed in on the cannabis frenzy before the carnage
The smart money got out before the cannabis bubble burst. Now, retail investors are suffering and pot companies face a financing drought
Friday, November 1, 2019
The warning signs were there all summer, but it wasn’t until the first business day of September that the reckoning arrived for Canadian cannabis companies in need of money. There were already clear signs that the days of easy money for cannabis companies were over. The total amount of money raised by the sector had plunged over the summer. With little access to fresh cash, Canada’s licensed producers now face a new reality. They have spent years focused on financings to fund their expansions, paying little mind to positive cash flow. Without new capital, they will have to scrap construction projects and scale back growth plans. “The vast majority of the companies are going to go bankrupt.” (See also: It’s time for Canada’s cannabis companies to get their governance houses in order)
