FP Dealmakers: ‘There are going to be bankruptcies'
Cannabis deals plunge by third after dizzying rally
Thursday, January 30, 2020
The one thing Bay Street’s top cannabis bankers are all in agreement about is how difficult it has become for the pot sector to raise money over the past six months, be it through debt or equity. That trend might continue for the next little while, as investors retreat to safer havens, and wait for companies to rejig their management teams, repair their balance sheets and generate profits — something that has been sorely lacking in the volatile growth industry. According to Financial Post Data, the number of cannabis deals on Bay Street plunged 33 per cent in 2019, versus a year ago. Of the eight biggest debt and equity raises in 2019, seven took place in the first half of the year. Investment firms raised a total of $3.6 billion for the cannabis sector in 2019, 45 per cent less than a year prior.
