During the past trading week (January 20 to 24), a Canadian cannabis producer announced a massive, multi-million dollar influx of cash from a mysterious benefactor.
TMX Group (TSX:X) unveiled a new index that tracks the performance of the biggest cannabis companies on its exchanges, and a pharmaceutical company that specializes in cannabinoid-based medicine enjoyed some major wins for product distribution across Canada.
Here’s a closer look at some of the biggest cannabis news over the week.
Aphria rakes in C$100 million from institutional investors
The Friday (January 24) announcement said the unnamed institution has agreed to purchase over 14 million units of Aphria at a price of C$7.12 per unit. Each unit is made up of one common share and a half of a purchase warrant. With a warrant, the investor will be able to buy additional common shares at C$9.26 a piece for up two years after the deal closes.
Aphria said it now boasts a cash balance pro forma of almost C$600 million. The company plans to use the new funding to finance international expansion, which has also been helped by the recent receipt of a European Union Good Manufacturing Practices certification from the Malta Medicines Authority for its facility in Leamington, Ontario, on Wednesday.
The money will also go towards working capital and other general corporate needs.
“Given the strength of our leadership team, the continued execution of our strategic plan and the robust opportunities we have for growth in the global cannabis industry, we were able to secure this additional capital from a single investor, a significant endorsement of Aphria in these market conditions,” said CFO Carl Merton in a press release.
The offering, subject to customary closing conditions and regulatory approval, is expected to close on January 31.
At the market open on Friday, Aphria prices were at C$7.85 in Toronto.
S&P/TSX Cannabis Index launches on TSX
The new exclusive index tracks 15 of the largest companies listed on the TSX or the TSX Venture Exchange (TSXV) that are “significantly involved in the cannabis market,” TMX Group said in a press release.
Firms on the list run the gamut from juggernauts like Canopy Growth (NYSE:CGC,TSX:WEED) and Aurora Cannabis (NYSE:ACB,TSX:ACB) to smaller companies focused on specialized sections of the supply chain like PharmaCielo (TSXV:PCLO,OTCQX:PCLOF) and MediPharm Labs (TSX:LABS,OTCQX:MEDIF).
The S&P/TSX Cannabis Index follows shortly after TMX launched the S&P/MX International Cannabis Index (TSX:MCAN) late last year. The global version of the index features 22 cannabis companies that list on the New York Stock Exchange and the NASDAQ, as well as the TSX exchanges in Canada.
On Friday, the S&P/TSX Cannabis Index opened at C$230.23.
Tetra Bio Pharma prepares for over-the-counter product distribution in Canada
Consumers in Canada will soon be able to get their hands on cannabinoid-based medicine without a prescription.
The distribution update comes after Tetra was granted two over-the-counter drug identification numbers from Health Canada earlier in January.
Prep work for the company leading up to its nation-wide distribution goals have included locking down undisclosed contracts with manufacturing and sales organizations to ensure the products are quickly developed and marketed.
The Ontario-based drug maker also told investors of a C$10 million bought deal offering on Tuesday (January 21). This round of financing is being completed by investment firm Echelon Wealth Partners, who has agreed to purchase almost 19 million units of Tetra for C$0.53 a piece.
An article from MarketWatch found that California-based MedMen Enterprises (CSE:MMEN,OTCQX:MMNFF) is in a scramble for cash as it offers retailers shares of its company as payment for cannabis products.
In an email sent to MarketWatch, MedMen CFO Zeeshan Hyder confirmed that the company has been working with vendors on adjusting payment terms, which has included offering class B non-voting shares in a payment plan to clear outstanding debts.
PharmaCielo signed a distribution deal to send its cannabidiol (CBD) isolate and CBD oil across Europe with the Quebec-based CBD Export Global. As a part of the three year deal, the first shipments are expected to be sent out sometime in 2020.
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: MediPharm Labs is a client of the Investing News Network. This article is not paid-for content.