Detroit, Dec 26th, 2018, (PENNYSTOCKS.NEWS), Companies that possess liquid assets such as cash can make a strategic acquisition. And can more easily and fund these acquisitions. The global marijuana markets have witnessed major growth and development. These efforts can in the long term lead to failure or success.
Which marijuana stocks claims the major cash stockpiles?
The top three are, Canopy Growth(NYSE: CGC), Cronos Group(NASDAQ: CRON), and Aurora Cannabis(NYSE: ACB).
1. Canopy Growth:
The number one spot for most cash in the marijuana industry, goes to Canopy Growth. As of September 30th2018, the company reported $429.4 million Canadian (roughly US$319 million). Since the last quarter, the company continues to develop causing an impact on the cash position of Canopy Growth.
On November 1st 2018, the closing of Constellation Brands’ (NYSE: STZ) investment was for Canopy the biggest of these developments. This deal brought an extra US$4 billion into the sector of Canopy. More significantly, Canopy Growth has aligned with one of the largest alcohol beverage companies in the world. A company which has an impressive track record in producing successful labels in the extremely controlled markets.
Over the last few months, Canopy has been using some cash. To buy Colorado-based hemp researcher ebbu. In addition to, funding the company operations. They paid out 25 million Canadian dollars, plus Canopy handed over 6.2 million shares of its stock. Canopy Growth invested 3 million Canadian dollars (about $2.2 million US) in a smaller Canadian marijuana grower 48North Cannabis and acquired the German vaporizer Storz & Bickel for 145 million Euros (about $165 million US dollars). Even with all the money that Canopy is spending, the Constellation deal puts Canopy on top for most cash position compared with its peers.
2. Cronos Group:
Second is Cronos Group reported 41.5 million Canadian dollars (about 31 US million dollars) in cash assets as of September 30th, 2018. With the growing of the marijuana industry, those numbers are not enough to land Cronos in the top 3 cash stockpiles. Thus, you might be wondering how it made it in second place.
Similarly to Canopy, Cronos also had the major deal with the company outside of the cannabis industry. On December 7th, 2018 Cronos Group indicated that tobacco giant Altria (NYSE: MO) was buying 45 percent of the company for almost 2.5 billion Canadian dollars in cash.
Given the fact that the Altria deal has not yet concluded. Officially, Cronos Group does not have a large amount of cash on hand. However, there are no difficulties in sight to avoid the transaction from being finalized in the next few months. The cash stockpile of Cronos Group might have a lot of IOUs as of right now, but there is no question that the company is sitting idle.
3. Aurora Cannabis
Aurora Cannabis had 147.8 million Canadian dollars (about US$110 million) in cash and the cash equivalents at the end of September 2018. The cash stockpile for Aurora increased by issuing many shares. The reality for Aurora is that allotting additional shares, is the easiest way to get its hand on much-needed cash. Although, it comes at the cost. In addition to, the market cap of Aurora increasing tremendously in 2018, its share price has fallen.
Furthermore, Aurora continues to consume their cash stockpile. Since the end of the 3rd quarter, which ended on September 30th, 2018. The company has invested an additional CA$20 million (about US$15 million) in cannabis retailer Choom and CA$10 million (about US$7.4 million) in cannabis lifestyle and accessories retailer High Tide. Aurora completed the acquisition of ICC labs, but that deal was supported by the issuance of the warrants and stocks.
Cash heading south:
Nevertheless, all three companies with all the money they have been witnessing, their cash stockpiles are heading down.
The legalization of hemp which is cannabis plants that do not contain more than 0.03 percent THC. The U.S. grants the considerable opportunity for the significant Canadian cannabis producers. Canopy Growth revealed that it aims to enter the U.S. hemp market. Aurora Cannabis and Cronos Group won’t be too far behind.
So far none of these three companies are operating in the U.S. currently, because they cannot do so and retain their stock listings on the major exchanges. This new opportunity could mean that cash will start to flow from Canada to the United States. Other cannabis companies in the Canadian marijuana industry without the good amount of money could struggle to gather the money to move to the U.S with these three companies.
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