Well, the headline says it all, Canopy Growth Corp. found a well-known and respected bank to lead its equity financing. The co-leading banks are BMO Capital Markets and GMP Capital which are Bank of Montreal holding companies.
This deal will give Canopy Growth a severe running start, with at least $175 Million ($120 USD) to raise.
As of now, a price per share for Canopy is $34.60 where a number of syndicate writers have already purchased around 5.06 Million shares. This is an added option to purchase 759,000 more in shares which comes out to $2.6 Million in Canadian currency.
Chris Damas Editor for Barrie stated, “A Canadian bank co-underwriting a cannabis deal portends more bank involvement in stock issues and deals, a wider investor audience for cannabis stock issues and even bank-employed analyst coverage.”
These major capital shifts towards cannabis are creating a massive wave of funding deals that are leading well into the millions sector. Whereas at first Canadian banks were steering clear of cannabis-based industry companies beforehand. Because they were still dealing with operation based in the United States and teaming up with a cannabis company may lead to a strained relationship with their neighbors below. However, as lucrative as the cannabis market has become, this is by far the right choice.
As far as the future is concerned Canopy Growth Corp has no intention of crossing over into U.S. territory. This is mainly because it would be illegal under the Toronto Stock Exchange, yet it’s best since the U.S. has some catching up to do.
What is this equity financing proving to everyone? Well the big picture idea, capital banks are interested which will only bring cannabis into the mainstream. Cannabis marketing will be nowhere the taboo it was once before, the future is here and Canada is leading the way.