Monday Issuing Stock: Shareholder Impact ~

Cash Flow and issuing marijuans industry stock.

Morgan Paxhia

U.S. stocks continued to advance today as broad markets regained record highs. The S&P 500 posted a gain of 0.40% to 2,079.

The recent, relentless selling pressure in cannabis seems to have passed for now. Indices were mostly flat last week and are pretty quiet today as well. MJIC Marijuana Index and Benzinga 420 Marijuana Index declined by 0.56% and 1.82%, respectively.

Daily Positive: GW Pharmaceuticals (GWPH) was added to the NASDAQ Biotech Index this past Friday. We see this action as yet another qualifier of the movement’s staying power.

Daily Negative: Three pump and dump names we’ve previously mentioned have been hit hard with selling pressure again today: THCZ, NWPN, and NHLE. This action looks pretty textbook to us.

One of the benefits of being a public company is the access to low cost capital. Public companies have the ability to issue stock versus other methods such as borrowing money. However, issuing stock is another way of saying you are potentially diluting your existing shareholders, adding supply to the market, etc. If the market is not bullish on your plan or execution, the stock will suffer.

Unfortunately, we are seeing this scenario play out in Canada with Organigram (TSXV: OGI.V). Its ambitions to grow came at the cost of its existing investors as Organigram had to raise capital at a lower price than the last capital raise. In addition, it was only able to raise a fraction of their intended goal.

 

The discussion above is provided for informational purposes only and does not constitute an offer of, or solicitation for, any investment services or products offered by the author. The author is not making any investment recommendations and the opinions above do not constitute investment advice. Reference to above indices [and companies] is based on information provided by sources the author believes to be credible. Investing in the cannabis industry, as with other industries, presents certain risks including the risk of loss on an investment.

 

Recent News Articles

Friday February 28

Colorado’s first licensed cannabis R&D firm to study marijuana’s effect on Alzheimer’s disease

in Medical News

by Bruce Kennedy - Editor in Chief

A Denver-based company hopes to be the state’s first to study the effects of marijuana…

2519 hits

Friday February 28

Texas state crime labs won’t test suspected marijuana in low-level cases - Cannabis News

in Law & Crime

by Bruce Kennedy - Editor in Chief

The Texas Department of Public Safety said last week that it would not perform testing…

2520 hits

Monday March 02

Cannabis And Lou Gehrig’s Disease: Here’s What You Should Know - Cannabis News

in Medical News

by Bruce Kennedy - Editor in Chief

Considering the neuroprotective effects of cannabinoids and the anti-spastic effects of cannabinoids in multiple sclerosis…

1538 hits

Monday March 02

Bill To Legalize Marijuana Sales Officially Passes Vermont House Of Representatives - Cannabis News

in Politics

by Bruce Kennedy - Editor in Chief

The Vermont House of Representatives finalized its approval of a bill to legalize the retail…

1477 hits

Monday March 02

Study reveals antibiotic potential of cannabis compound - Cannabis News

in Science

by Bruce Kennedy - Editor in Chief

A compound made by cannabis plants has been found to wipe out one of the…

1439 hits