Some Cannabis Companies Are Mere Months Away From Running Out of Cash

Article by Kristine Owram, Growth Op

CANNABIS BUSINESS Some cannabis companies are mere months away from running out of cash Liquidity a more pressing concern for Canadian cannabis companies than for their U.S. counterparts, report says By Kristine Owram

Liquidity is a more pressing concern for Canadian cannabis companies than for their U.S. counterparts, according to a new report.

Large Canadian pot producers have a median of 6.5 months of cash, compared to 14.4 months for U.S. multi-state operators, cannabis investment bank Ello Capital said in an analysis of firms’ balance sheets, cash flow from operations and capital expenditures.

Aurora Cannabis Inc. is near the bottom of the pack and the worst-positioned Canadian producer with 2.3 months of liquidity, followed by Tilray Inc. with 3.7 months. Aurora said Thursday that it’s cutting 500 jobs as part of a major cost-reduction effort.

Many cannabis companies will either have to raise capital or find a merger partner in the near future, said Hershel Gerson, chief executive officer of Ello Capital. Investors are open to providing capital, but only under the right circumstances, he said.

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