How the short may coverIt has been postulated that the short would cover based on XBC's appetite to raise funds for it's growth by getting into a secondary offering. Or shorting a stock beyond "reasonable valuation" to get a better price for covering?
That practice is may be curbed in the future. From today's Bloomberg article about the DOJ probe of Toronto based ANSON.
https://www.bnnbloomberg.ca/toronto-hedge-fund-with-45-returns-in-doj-probe-of-short-sales-1.1742961 On some occasions, people with knowledge of its operations said, Anson engaged in a controversial practice of betting that shares of cannabis companies would fall, and later participating in their secondary stock offerings -- sales that often trigger price drops. The Globe and Mail reported on the strategy in 2019.
Canadian regulations are looser than those in the U.S., making it easier for investors to legally use discounted shares from such an offering to finish up -- or “cover” -- earlier short sales, said Paul Davis, a securities lawyer in Toronto who has sought more-stringent rules for short sellers. “We don’t have the outright prohibition that exists in the U.S.,” said Davis, a partner at McMillan. But securities regulators are considering a proposal that would bar such trading, he said.