In the last trading session, the stock price of ABCANN GLOBAL CORPORATION (CVE:ABCN) declined more than 1% to close the day at $0.920. The decline came at a share volume of 230,889 compared to average share volume of 305,536.
CFN Media Group reported publication of an interview and article highlighting how partnerships are leading Canada’s cannabis market towards greater efficiency as LPs work to meeting growing demand. Firms discussed include ABcann, Emerald Health Therapeutics Inc (CVE:EMH), WeedMD Inc (CVE:WMD) and Cannabis Wheaton Income Corp (CVE:CBW).
Cannabis Wheaton Income recently reported an agreement with ABcann Global. Under the agreement terms, Cannabis Wheaton Income will invest as much as $30 million preliminary into ABcann Global as an equity investment. After closure of that investment, Cannabis will further support a 50,000 square foot expansion in lieu for 50% of the net proceeds of imminent retail or wholesale sales from the latest production area, along with a stock stake in the entire firm.
ABcann is the sixth approved manufacturer in Cannabis Wheaton’s portfolio, however it’s their initial publicly-traded manufacturer with a sales license. This showcases a major turning point for Cannabis Wheaton Income just recently turning a publicly-traded firm itself. The agreement is highly attractive and could offer internal rates of return in surplus of 50% without any thought for equity, and serve as a model for future deals with public firms.
From ABcann’s side the agreement allows corporate advancement under favorable financing terms, with the preliminary $15 million priced at C$2.25 per share and the subsequent $15 million priced at $2.25 per share minimum, probably higher.
The equity has been hovering around $1. This financing brings $30 million to the cash the firm already has on hand, placing ABcann Global on robust financial footing as it increases production and plans for further advancement in preparation for the imminent adult use legalization.