Foreign Assets Could be Next on the Block for Cash-Hungry Cannabis Companies

Article by Vanmala Subramaniam, Growth Op

CANNABIS BUSINESS Foreign assets could be next on the block for cash-hungry cannabis companies International holdings becoming burden to companies needing to divest non-core assets By Vanmala Subramaniam Cannabis plants grow on a farm in Jamaica. Ezra Fieser/Bloomberg

Two years ago, Canadian cannabis companies were racing to scoop up international assets, from swaths of fertile land in southern Africa to cultivation licences in Jamaica and everything in between.

Now, with fears of a cash crunch looming over the industry, some of the same producers who spent tens of millions to build an international presence have started dialling back, putting projects on hold or divesting of their foreign operations altogether.

And it’s a trend that some pot analysts expect will only intensify over the next 12 months.

“Licensed producers are now in a capital constrained environment and investors want to see profitability,” said Graeme Kriendler, an analyst with Toronto-based investment firm Eight Capital. “This is forcing management teams to take stock of what they have, divest out of non-core assets and focus on what’s in their own backyard.”

Read the full article here.

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