With Canada planning to legalize both recreational and medical marijuana on a federal level, marijuana investments have reached more than $1 billion. While capital has continued to enter the Canadian cannabis industry it has slowed down quite a lot compared to last year’s sudden rise of marijuana investments. Investors now need to be more selective and look to companies that have actually begun to execute their business plans and are working to create value for shareholders.
A Golden Opportunity
Just a couple of days ago, Golden Leaf Holdings (CNSX:$GLH) ($GLDFF), an Oregon-based cannabis oil company, closed its efforts for subscription receipts financing with the overall total of above Canadian$35 million; 125,892,857 subscription receipts were sold at Canadian$0.28 each.
This development is definitely favorable for those who have invested in the company, as net proceeds will be used to aid in the purchasing of Chalice as well as to fund other acquisitions announced recently and for Golden Leaf’s already existing operations.
For now, the Canadian$35 million raised through the subscription receipts financing has been placed in escrow, and will be released shortly once Golden Leaf satisfies these conditions:
- Signing a definitive agreement regarding the purchase of Chalice
- All conditions before the purchase of Chalice is completed need to have been met
- Common shares that can be issued in accordance to the offering have been listed on the CSE
- Receiving all necessary regulatory, shareholder, and third-party approval for the purchase of Chalice
- Golden Leaf does not violate or default any of its responsibilities under its agreement with anyone related to the offering
Cannabis Wheaton Answers Questions Regarding its Engagement Letter
If you have been keeping up with your marijuana investments, you might have heard that Cannabis Wheaton (CVE:$CBW) ($KWFLF) has been subjected to what the company has stated to be multiple false and/or misleading reports. Cannabis Wheaton, along with financial groups Canaccord Genuity (TSE:$CF) and Eight Capital, was negatively referenced and targeted in regards to their dealings. As a result, Cannabis Wheaton had terminated its engagement with both Canaccord Genuity and Eight Capital, citing that the decision of termination was mutual.
Responding to the termination, Chuck Rifici, CEO of Cannabis Wheaton, stated, “Since the previously announced private placement, only positive events have occurred within the company’s business including the signing of the agreement with ABcann Global. The Co-Lead Agents confirmed that the termination of the engagement letter was not in any way related to due diligence conducted by the Co-Lead agents or investors’ reception of the company’s private placement.”
Rifici continued, “While we are disappointed at the timing of the termination of the engagement letter with the Co-Lead Agents, we are pleased with the enthusiastic response from the syndicate members and other leading firms seeking to take up the agency role in the private placement. We are acting swiftly to finalize an agreement with a new broad syndicate of agents to facilitate an expeditious closing of the proposed private placement.”
While the company has continued on despite the major loss in investments, the shares of Cannabis Wheaton are under a great deal of pressure. It is highly suggested that those in marijuana investing keep up with the company, its news, and stock trends.
Maple Leaf Breaches Contract and has Agreement Terminated
While investments n marijuana can give investors a lot of potential in returns, there are certainly a lot more risks involved. When Horizons ETFs Management released its Medical Marijuana Life Sciences ETF, investors were warned to take caution with the fund due to its structure and some of its investments. One of the biggest concern posed was the funds’ investment in the company Maple Leaf Green World Inc. (CVE:$MGW) ($MGWFF). Just recently, marijuana stock investment in Maple Leaf proved to be a rather poor choice.
As of May 29th, 2017, Maple Leaf had its consulting agreement with TheraCann International Benchmark terminated. TheraCann, an emerging international cannabis consulting company, ended the agreement with Maple Leaf largely due to the company’s failure to perform a big part of the contract, with May 25th being the deadline for fulfilling the responsibilities referred to in the contract.
TheraCann’s termination included an entire review of Maple Leaf’s ACMPR Application, analysis of site suitability, cultivation strategies, as well as an overview of project security. The consulting company stated that Maple Leaf had not operated responsibly, and as a result did not fulfill its promise according to their contract. The faults of Maple Leaf included, but is not limited to:
- Using TheraCann’s reputation in order to raise capital without showing any commitment or intention to apply TheraCann’s services.
- Mislead representatives with material facts related to Maple Leaf’s ACMPR application.
- Failure to pay the agreed amount of services provided to TheraCann.
As such, investment in Maple Leaf should be done with caution — the shares may be more risk than reward. Even without looking at the company’s poor handle on management, the numbers reflect a bad investment in marijuana: Maple Leaf had fallen more than 12% in the last month, and shares are up 290% in the last 12 months.
Featured Image: Twitter.com
