Article by Devon Scoble, Lift News
Yesterday, Smiths Falls, Ont. licensed producer Canopy Growth Corporation announced an $175 million bought deal financing via BMO. This unprecedented investment makes BMO the first Canadian financial institution to lead equity financing for a medical cannabis company.
The deal saw a syndicate of underwriters, co-led by BMO Capital Markets and GMP Securities L.P., purchase just over five million shares, at a price of $34.60 per share.
“I think this signals a new normal,” Bruce Linton, chief executive officer at Canopy, told the Globe and Mail. “What I think is going to happen is the institutional buyers who’ve said we don’t really do this because banks don’t do this are going to say ‘shoot, we really should do this.'”
The $175-million dollar investment comes at a turbulent time in the cannabis stock market, which has fluctuated wildly in the past weeks, with many analysts pointing to uncertainty in US cannabis regulations. Although many states have legalized cannabis, or announced plans to legalize it, the plant and its products remain illegal under federal law – a sore point for legal cannabis businesses under the aegis of anti-cannabis Attorney General Jeff Sessions. Analysts also point to concerns about the potential overvaluation of Canadian cannabis companies.