The Globe and Mail reports in its Wednesday, Sept. 18, edition that class-action lawyers are lining up to sue Canntrust Holdings ($1.29 (U.S.)), which trades in Toronto and New York.
The Globe's Andrew Willis writes that upstart cannabis companies typically burn far more cash than they raise through marijuana sales. They count on regular trips to the capital markets to keep their coffers full as they expand operations. Canntrust, however, will struggle to tap public investors, to put it mildly, in the wake of a $200-million (U.S.) equity offering in May that left a stench on Wall Street and Bay Street. The financing -- led by Bank of America Merrill Lynch, Citigroup, Credit Suisse Securities and RBC Capital Markets -- featured significant stock sales from company insiders, including Eric Paul, the former chairman.
Canntrust's share sale in May played out at $5.50 (U.S.). What was a billion-dollar company earlier this year now has a market capitalization of $181-million (U.S.).
Health Canada's road map to regaining cultivation licences provides potential bidders with the information they need to make offers for Canntrust's greenhouses, production facilities, recreational brands or the medical marijuana business.
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