Medical marijuana companies will likely tap the Canadian bond market to fund growth as investors become more comfortable with the industry and the federal government gets set to legalize the drug by next year.
“There would be an appetite for more traditional debt arrangements and, given that leading cannabis companies have significant assets now, this may be one direction that we see the market go in the future,” said Cam Battley, executive vice president of Aurora Cannabis Inc., a licensed marijuana producer in Mountain View County, Alberta. “I suspect we’re headed in that direction right now.”
Canadian marijuana companies have tapped capital markets to fund expansion plans amid expectations that Prime Minister Justin Trudeau’s government will unveil a proposed law as early as Thursday to set the stage for legalization in 2018. Shares in companies like Canopy Growth Corp., the first Canadian pot company with a market value of C$1 billion ($750 million) — making it a marijuana unicorn — have soared, and the company announced last week it will expand west by acquiring rTrees Producers Ltd. in Yorkton, Saskatchewan.
“With the change in social attitudes, people are looking at the cannabis sector with different eyes,” he said in a phone interview. “This is going to be a significant market going forward.”
With assistance from Jen Skerritt and Josh Wingrove
For the Complete Article please visit: Financialpost.com