Pot companies have just months to live on average, study finds
The largest Canadian marijuana companies have less than a year’s worth of cash left on average, and their U.S. counterparts aren’t faring much better, according to a new study.
Canadian companies have, on average, enough cash on hand to operate for six and a half more months, according to an analysis released Tuesday by Ello Capital, while U.S. weed companies typically have about 14 months of cash. Ello examined company filings, other public statements and market data to determine how many months of liquidity remained for 13 of the largest U.S. weed companies by market value and seven from Canada.
Two of the largest Canadian names are on pace to run out of money within the next 12 months, according to Ello. Aurora Cannabis Inc. has just more than two months of cash remaining in its war chest, according to the analysis, and Canopy Growth Corp. slightly less than eight months of cash, with about $833 million remaining, the report said. Previously, Constellation Brands Inc. invested $4 billion in the Canadian weed producer.
Reported by Market Watch