The Current Cannabis Capital Crunch Affecting the Marijuana Industry Has Caused Pools of Investor Funds to Dry Up
With Burn Rates Still High, These 10 Pot Stocks Are Quickly Running Out of Money With 10 Months or Less of Cash Left
Unless you’ve been living under a rock, then you’re certainly aware of the cannabis capital crunch currently sweeping across the industry. This situation has resulted in the evaporation of the once plentiful pools of investment dollars and has left many marijuana stocks running on fumes. Some of the larger cannabis stocks have gotten creative resulting in the recent surge in sales lease-back deals. While other pot stocks have turned to debt financing where available. But for the smaller players without these options, there’re time may be running out.
Recently, a boutique investment banking firm by the name of Ello Capital conducted a review of the 20 largest North American pot stocks to get a better idea of their current cash situation. Ello looked into 7 of the largest Canadian cannabis stocks and 13 of the biggest U.S. marijuana stocks. The report’s findings were eye-opening, to say the least. Some may say, downright shocking.
One of the goals of the Ello review was to estimate how long each company would survive based on its available cash balance and burn rate. Ello found, that on average, the 7 Canadian cannabis stocks had only enough cash left to last for another 6.5 months. South of the border, Ello discovered the average U.S. marijuana stock in the report had 14 months of capital on hand, more than double the 7 Canadian companies.
Of the group of 20 pot stocks consisting of 7 Canadian licensed producers (LPs) and 13 U.S. multi-state operators (MSOs), the report noted that only the following 10 companies had more than 10 months of capital available:
- Columbia Care (NEO: CCHW) (OTCQX: CCHWF) (FSE: 3LP) (10.4 months)
- Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2) (14.4 months)
- Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) (17.8 months)
- Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF) (18.1 months)
- Aphria (TSX: APHA) (NYSE: APHA) (FRA: 10E) (>18.1 months)
- Cresco Labs (CSE: CL) (OTCQX: CRLBF) (FRA: 6CQ) (>18.1 months)
- Curaleaf Holdings (CSE: CURA) (OTCQX: CURLF) (>18.1 months)
- Cronos Group (TSX: CRON) (NASDAQ: CRON) (FRA: 7CI) (>18.1 months)
- Liberty Health (CSE: LHS) (OTCQX: LHSIF) (FRA: S6UQ) (>18.1 months)
- TILT Holdings (CSE: TILT) (OTCQB: TLLTF) (>18.1 months)
The remaining 10 cannabis companies have only 10 months or less of cash on hand and will need to raise capital very soon. The full list below goes into more detail and you may be surprised to learn that 1 U.S. MSO has less than a month of capital remaining.
Download the new ELLO Capital ‘Cannabis Revenue & Liquidity Analysis’ Report Here
Learn more about ELLO Capital: Website | ELLO Insights | Facebook | Twitter | LinkedIn | Instagram
*Market data as of the company’s latest quarterly report up to February 7, 2020
10. iAnthus Holdings (CSE: IAN) (OTCQX: ITHUF) (FRA: 2IA)
- Cash Flow from Operations: $1 million
- Capital Expenditures: $20 million
- Free Cash Flow: -$19 million
- Cash Balance: $64 million
- Cash Remaining | Time: 10 months
- Current Share Price: $1.68
- YTD Return:–13.85%
Learn more about iAnthus: Website | IR Website | Investor Deck | IAN Chart
9. Harvest Health (CSE: HARV) (OTCQX: HRVSF)
- Cash Flow from Operations: –$19 million
- Capital Expenditures: $18 million
- Free Cash Flow: -$37 million
- Cash Balance: $112 million
- Cash Remaining | Time: 9.2 months
- Current Share Price: $3.30
- YTD Return: -22.35%
Learn more about Harvest Health: Website | IR Website | Investor Deck | HARV Chart
8. Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1)
- Cash Flow from Operations: –$151 million
- Capital Expenditures: $172 million
- Free Cash Flow: -$323 million
- Cash Balance: $833 million
- Cash Remaining | Time: 7.7 months
- Current Share Price: $29.59
- YTD Return: +5.68%
Learn more about Canopy Growth: Website | IR Website | Investor Deck | WEED Chart
7. HEXO Corp. (TSX: HEXO) (NYSE: HEXO) (FRA: 74H)
- Cash Flow from Operations: –$26 million
- Capital Expenditures: $34 million
- Free Cash Flow: -$60 million
- Cash Balance: $129 million
- Cash Remaining | Time: 6.5 months
- Current Share Price: $1.91
- YTD Return: -10.75%
Learn more about HEXO: Website | IR Website | Investor Deck | HEXO Chart
6. MedMen (CSE: MMEN) (OTCQX: MMNFF) (FRA: 0JS)
- Cash Flow from Operations: –$44 million
- Capital Expenditures: $10 million
- Free Cash Flow: -$54 million
- Cash Balance: $109 million
- Cash Remaining | Time: 6 months
- Current Share Price: $0.43
- YTD Return: -41.1%
Learn more about MedMen: Website | IR Website | Investor Deck | MMEN Chart
5. The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF) (FRA: O1GA)
- Cash Flow from Operations: $7 million
- Capital Expenditures: $53 million
- Free Cash Flow: -$46 million
- Cash Balance: $59 million
- Cash Remaining | Time: 3.9 months
- Current Share Price: $0.57
- YTD Return: -25.97%
Learn more about TGOD: Website | IR Website | Investor Deck | TGOD Chart
4. Tilray (NASDAQ: TLRY) (FRA: 2HQ)
- Cash Flow from Operations: –$57 million
- Capital Expenditures: $24 million
- Free Cash Flow: -$81 million
- Cash Balance: $100 million
- Cash Remaining | Time: 3.7 months
- Current Share Price: $19.24
- YTD Return: -9.13%
Learn more about Tilray: Website | IR Website | Investor Deck | TLRY Chart
3. Aurora Cannabis (TSX: ACB) (NYSE: ACB) (FRA: 21P)
- Cash Flow from Operations: –$71 million
- Capital Expenditures: $82 million
- Free Cash Flow: -$153 million
- Cash Balance: $117 million
- Cash Remaining | Time: 2.3 months
- Current Share Price: $2.23
- YTD Return: -23.63%
Learn more about Aurora Cannabis: Website | IR Website | Investor Deck | ACB Chart
2. 4Front Ventures (CSE: FFNT) (OTCQX: FFNTF)
- Cash Flow from Operations: -$7 million
- Capital Expenditures: $9 million
- Free Cash Flow: -$16 million
- Cash Balance: $6 million
- Cash Remaining | Time: 1.1 months
- Current Share Price: $0.52
- YTD Return: -10.34%
Learn more about 4Front Ventures: Website | IR Website | Investor Deck | FFNT Chart
1. Green Growth Brands (CSE: GGB) (OTCQB: GGBXF)
- Cash Flow from Operations: -$13 million
- Capital Expenditures: $10 million
- Free Cash Flow: -$23 million
- Cash Balance: $7 million
- Time of Cash Remaining: 0.9 months
- Current Share Price: $0.395
- YTD Return: -50%
Learn more about Green Growth Brands: Website | IR Website | Investor Deck | GGB Chart
Also Read: 7 North American Cannabis Stocks With New Analyst Ratings and Price Targets
The Most Anticipated U.S. MSO IPO of 2020 is Drawing Near
The Cannabis Sector is Long Overdue for a High-Profile IPO
The Wait is Nearly Over, TCI’s MSO IPO of 2020 is Almost Here
Get Your Copy of The Ultimate Cannabis Investing Guide
Join the Discussion in the TCI Investor Group
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.
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