Predawn, my reply predawn thanks for bringing that article to our attention. Before I address the contents of that article below (pasted below) I want you to know that I believe you are financially intelligent. You made a savvy move when you added another 165K to you existing position at 0.18$. As Boris Johnson would say "well played my friend"
Let me address the article now. I agree with it. Lots of small to medium size cannabis plays would be going under in 2020. One large company, CannTrust is actually going to be included in that list.
Now addressing the small and medium cannabis companies. Lots of them would go into bankruptcy. I actually feel that some of them, at this time, are supplying the Black Market in order to generate cash flow. Of course we know why. The rollout was a disaster. No. It was a partial disaster. Ontario is now ramping up with retail stores and that is a good thing.
I can see the wisdom in the Private Offering but wondered about the wisdom of doing it at 0.15$. Maybe management and the former CEO thought that investor sentiment was against them and they wished to regain control of the company thus protecting them from a hostile takeover. The company is a gem in the cannabis space.
I could see Canopy, Aurora and particularly Aphria would be eyeing and drooling to acquire Zenabis. The company was getting better but retail investors were getting a tad fed up. Zenabis was ripe for the picking. The price I believe was in the 0.40's$ and an offer around 0.60$ would have been welcomed by most of the retail investors. The catch is that the company was worth 1.50$++ Get the picture. Management maneuvered the company away from such a scenario.
Zenabis is poised for success and glory. Someone is picking up cheap 0.19$ shares and those someones may be directors in Loblaws, Ocean Spray, Aphria, Canopy, Coke, Pepsi et al. Fortunately for us they will not get controlling interest but they are going to make a hefty profit of over 10X
predawn, hold tight for an interesting ride upwards. One day we will meet at Tim's for a coffee. Enjoy the ride my friend.
Remember that Zenabis raised cash and not debt!
THE ARTICLE FROM THE NATIONAL POST
Cannabis industry insiders are bracing for a slew of bankruptcies in the coming year as small and medium-sized companies low on cash struggle to raise funds in the downtrodden sector.
“We have had a busy few years, but next year we’re going to be busy for a different reason — we expect a few million dollars in legal fees from insolvencies and consolidation,” said Ranjeev Dhillon, a partner at McCarthy Tetrault LLP and the firm’s cannabis group lead.
Dhillon says that his team is already seeing companies that are heading down that path.
“Companies that cannot distinguish their brands and don’t have the money to keep up operations on existing facilities will not be able to carry forward,” he told the Financial Post in an interview. “The only kind of money you can raise right now, if at all, is debt.”