Happy Legalization, Canada!

We are regularly asked to comment on forward looking capital structures of young or start-up companies in the Cannabis industry. A primary concern is founder dilution.

Canadian cannabis is one of the hottest capital markets in the world, with multi-billion dollar capitalizations and acquisitions at record breaking multiples. It is important to note, however, that the industry is highly capital intensive and there is very little leverage available. In other words, virtually all capital raised is dilutive to the founders.

Below are tables of select Canadian companies with the percentage of ownership retained by founders:

Over $500 million market capitalization

 

Under $500 million market capitalization

Source: Capital IQ, SEDI and Company Materials