Cannabis bankruptcies start to roll in as pandemic halts financing
The weakest companies are succumbing and even relatively healthy firms are showing signs of strain
Monday, April 6, 2020
The cannabis bankruptcy filings are starting to roll in. Already plagued by a tough regulatory environment, disappointing sales and capital markets that had closed to all but the strongest companies, the industry is now facing a pandemic-related collapse in stock markets and ever-shrinking financing options. Pot companies completed two capital raises worth just US$5.6 million the week ended March 27, according to data from Viridian Capital Advisors. That’s the lowest level of activity this year and compares to 17 capital raises worth $169 million for the same period in 2019. (See also: Global stock meltdown is a disaster for cannabis industry already on the brink | 'Extinction-level event' looms for some cannabis companies as cash dwindles)
