A $40. 25 million convertible debt offering from Aleafia Health Inc. pushes Cannabis stocks up with the Toronto-based cannabis company leading the charge.
The multimillion convertible debt can definitely bolster the company’s balance sheet and help grow its business and with its announcement, Aleafia’s U.S.-listed shares ALEAF, +13.51% were last up about 14% in heavier-than-average volume to mark their biggest one-day percentage gain since September 21.
Mackie Research Capital, BMO Capital Markets and Canaccord Genuity Corp., the underwriter’s for Aleafia’s debt offering have fully exercised the over-allotment option to contribute $5.25 million to the total raise. More than 793,000 shares had changed hands by midday, exceeding the average daily volume of 579,000.
The capital raise for Aleafia is currently leading the charge for almost-all-high trading for the cannabis industry. Industry leader, Canopy Growth, Inc., rose 1.5% after they have already started implementing their agreement with Acreage Holdings Inc. The deal would allow Acreage to sell some of Canopy’s best-known brands, including Tweed and Tokyo Smoke. Acreage shareholders will receive about $2.63 per share as part of the $300 million that Canopy is paying for that option by July 3.
“This arrangement supplements and amplifies Canopy’s ability to attack the U.S., the largest global cannabis market ($100 billion opportunities by our estimate) providing a significant competitive advantage for Canopy about its Canadian peers,” Stifel analysts led by Andrew Carter wrote last week in a note to clients.
Zenabis Global Inc. shares ZENA, +7.69% also rose 3%, after GMP initiated coverage of the stock with a buy rating and C$3.25 ($2.48) stock price target that is almost double its current trading level. “We spoke to several of ZENA’s partners, including government contacts who all had exceptional regard for the company and its products,” Keywood wrote in a note to clients. “ZENA’s quality of facilities, the receptiveness of management, and ethical practices were all mentioned as key criteria in a stringent partner evaluation process.”
Other cannabis stocks closed trading high as well.