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Cannabis Summary for Feb. 24, 2021

2021-02-24 20:24 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index added 13.07 to 278.67, while the CSE Composite Index lost a fraction to 963.21. Canadian cannabis giant Canopy Growth Corp. (WEED) wobbled up and down before closing at $44.53, up 12 cents, on 1.77 million shares. Yesterday after the close, it filed a shelf prospectus that will allow it to raise up to $2-billion (U.S.) over the next 25 months. The prospectus qualifies the potential issuance of shares, subscriptions, units and warrants (no mention of debt).

This appears to be the largest shelf prospectus of any cannabis company. It is also the first prospectus that Canopy has filed since early 2018 (when it closed a $200-million bought deal). In late 2018, Canopy famously received a $5-billion investment from U.S. alcohol giant Constellation Brands -- an amount that left shareholders heavily diluted, but also left them with the reasonable expectation that Canopy would not need to do another dilutive financing any time soon. Two and half years is quite soon, even if, as noted above, Canopy is not actually raising any money at this time, merely giving itself the option. The company's balance sheet showed $825-million cash as of Dec. 30, 2020. That compares with $4.1-billion two years earlier. During this period, Canopy has lost money, lost market share and reported negative operating cash flow.

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