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Cannabis Summary for Jan. 24, 2020

2020-01-24 20:57 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index dropped 14.47 points to 212.73 Friday, ending its first week down 17.51 points. The Canadian Securities Exchange Composite Index lost 9.69 points to 422.22 Friday. Aphria Inc. (APHA) dropped 65 cents to $6.93 on 16.5 million shares after arranging a $100-million investment from an unnamed institutional investor. The investor is unnamed because of a confidentiality agreement, but whoever it is will receive 14.04 million units of Aphria at $7.12. Each unit will include one share and one-half warrant. A full warrant will be exercisable into a share at $9.26 for two years after the closing of the financing. The investor will immediately become the company's biggest shareholder and, if it exercises the warrants, it will own about 21 million Aphria shares, a little under 10-per-cent ownership.

The financing comes as a bit of a surprise given that the company has long hyped its financial position, which it has good reason to do. As of Nov. 30, 2019, Aphria had working capital of $675-million, including about $500-million in cash. Aphria's interim CEO, Irwin Simon, in fact told BNN Bloomberg, "We didn't have to do this ... It just gives us a much stronger balance sheet to continue doing what we're doing."

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