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Cannabis Summary for Jan. 23, 2020

2020-01-23 20:18 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index (which was put together on Monday) gained 83 points to 227.20 Thursday. The Canadian Securities Exchange Composite Index gained 2.79 points to 431.91 Thursday. Illinois-based Cresco Labs Inc. (CL) gained 27 cents to $8.57 on 816,900 shares after arranging loans for up to $100-million (U.S.), some of which will be drawn by about Jan. 30. If both parties agree, they can increase the loans to $200-million (U.S.). The loans are being provided by an unnamed syndicate of lenders, with participation from members of Cresco's management and board. Each loan will be for between 18 and 24 months, and will bear interest at roughly 13 per cent.

For U.S. producers such as Cresco, it is more difficult to raise money in ways other than share issuances thanks to marijuana's continued status as an illegal drug. There is a piece of legislation called the SAFE Banking Act that would allow banks to make loans to cannabis companies without fear of repercussions, but to take effect, it needs to pass through the Republican-controlled Senate. The act passed through the House in September with a final tally of 321 in support to 103 against.

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