Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }
HIGHLIGHTS
  1. Flowr intends to raise $43.5-million in a bought deal underwritten by GMP Securities.
  2. The deal comes three days after Flowr cancelled a $125-million bank-led offering, due to “prevailing market conditions,” the company said.
  3. Flowr units will be priced at $4.10, a 15 per cent discount to where the company’s shares finished trading on Friday.

Three days after cancelling a $125-million financing that was supposed to be underwritten by a syndicate of large banks, The Flowr Corp. has announced a $43.5-million bought deal led by GMP Securities.

The new deal is priced at $4.10 a unit, a 15-per-cent discount to the price at which Flowr shares finished trading on Friday. A unit includes one Flowr common share and one share-purchase warrant exercisable at $5.

Flowr shares dropped 17 per cent on Monday, finishing the day at $4.00.

Story continues below advertisement

Flowr’s previous deal, which was meant to be led by Credit Suisse Group AG, Barclays PLC and BMO Nesbitt Burns, was cancelled due to “prevailing market conditions which were not conducive to the completion of the Offering on terms that would be in the best interest of Flowr’s current shareholders,” the company said in a statement on Friday.

The Kelowna, B.C.-based firm also said on Friday that it is re-assessing the timing of its planned Nasdaq Stock Market listing, amid a broad sell-off in cannabis stocks and a hit to investor confidence caused by Health Canada’s investigation into CannTrust Holdings Inc.

Credit Suisse was part of a syndicate of banks that underwrote a US$195.5-million CannTrust financing in May, shortly before the company received a non-compliance order from Health Canada for illegal growing activity, causing CannTrust stock to drop more than 40 per cent.

As with the previous unsuccessful offering, Flowr intends to use the proceeds from the new financing to expand its facilities and to finance the acquisition of Portuguese cannabis firm Holigen Holdings Ltd., of which Flowr already owns 20 per cent.

However, market activity over the past month suggests there may be little interest among investors in the Holigen deal, wrote Ryan Tomkins, an analyst with investment bank Jefferies International Ltd., in a research note on Monday.

“With the equity offering being pulled as there was little appetite, and underwriters only willing to come in at this level with warrants exercisable at not much greater, it suggests very little conviction in the Holigen deal,” Mr. Tomkins wrote.

"The fact the company is taking the money at these terms possibly confirms near-term concerns around cash. The market may start to wonder, therefore, in the absence of further funding, will Flowr be able to invest as they would have hoped behind growth (remember they wanted C$125mn, not C$43.5mn)?” Mr. Tomkins added.

Story continues below advertisement

Flowr declined to comment on Monday’s announcement. The deal is expected to close around Aug 8.

Conference call with Greg Taylor
Cannabis Professional
What does the continued CannTrust fallout mean for the cannabis industry? Join us for a Cannabis Professional discussion with Mark Rendell and special guest Greg Taylor, CIO at Purpose Investments.

Related topics

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies