Canopy Growth Corp (TSX: WEED), the embattled cannabis producer, has once again risen to the top of Canadian markets in terms of volume. The equity saw over 35 million shares exchange hands today in what appears to be a short squeeze.
The equity topped out at a high of $2.43, marking a gain of over 91% before giving back some of the gains. The equity finally closed out the market at $2.30, a gain of $1.03 over Friday’s close of $1.27 per share.
The sharp change appears to be driven by a sudden interest in cannabis stocks as a result of rumored legislative changes in the United States, despite Canopy’s focus on the Canadian market. The AdvisorShares Pure US Cannabis ETF (NYSE: MSOS) is currently the third most discussed name on r/WallSteetBets, a popular subreddit for investors, which may be behind some of the sudden renewed interest in the cannabis space.
Canopy meanwhile this morning issued a news release, reminding investors to submit their proxy statements for the oncoming shareholder meeting to be held on September 25. Aside from the standard election of directors, compensation matters and appointment of an auditor, the company is looking to seek approval to consolidate its common shares.
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The proposed consolidation is for a range of between 1 for 5 and 1 for 15, which would see the company’s outstanding share count reduced to a figure between 47.8 million and 143.4 million.
READ: Canopy Growth To Propose Share Consolidation Of Up To 1 For 15 Shares
Canopy at the same time is seeking approval for the issuance of up to 76.3 million additional shares in connection with the issuance of certain convertible debentures worth $41.9 million, or $0.55 per share. The debentures were issued in connection with the settlement of $193.0 million in notes that were due in July 2023.
The recent run-up meanwhile follows the sale of the firms flagship Hershey Drive facility in Smith Falls, Ontario. The facility was sold back to Hershey Canada for a figure of $53 million, the proceeds from which will be used to pay down a senior secured credit facility. Year to date, seven properties have been sold by the company for gross proceeds of $155 million.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
