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Cannabis Summary for Dec. 20, 2019

2019-12-20 21:10 ET - Market Summary

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by Stockwatch Business Reporter

The Canadian Securities Exchange Composite Index rose 11.36 points to 372.01 Friday, ending the week down 14.5 points. Joseph Lusardi's United States-based Curaleaf Holdings Inc. (CURA) gained 48 cents to $7.42 on 857,800 shares after arranging a $275-million (U.S.) term loan from "a syndicate of lenders," none of which were named. The loan will bear interest at 13-per-cent annually and will mature in four years. Even though paying 13-per-cent interest is expensive, shareholders were pleased with the loan since it has been difficult for U.S.-based cannabis companies to get financing. They can issue more shares, but that dilutes existing shareholders.

Major banks in the U.S. have avoided investing in cannabis companies as a result of marijuana's status as a federally illegal drug. U.S.-based cannabis companies are hoping that changes soon. The Secure and Fair Enforcement (SAFE) Banking Act, which would allow banks and credit unions to finance state-legal marijuana companies, passed the U.S. House of Representatives in September. The House vote passed 321-103 (needed two-thirds majority), including votes in favour from 91 Republicans. Still, because the House is Democratic-controlled, that is the easier of the two steps. The more difficult part will be getting the bill through the Republican-controlled Senate.

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