Green Growth Brands Inc (GGBXF)

[pedro12]

As optimistic as I/WE are being asked to be, you can't deny the article below.[Let's hope upcoming revenues are all that and more]


6. Green Growth Brands: Down 66.5%
Not to sound like a broken record, but Green Growth Brands (NASDAQOTH:GGBXF), the final canna-bust on the list from July, has earned its place among the top losers because of (drum roll) share-based dilution.

On July 9, Green Growth Brands announced the acquisition of MXY Holdings for $310 million. With Green Growth already pushing into shopping centers and popular mall-based retailers with its CBD products, the addition of MXY Holdings adds tetrahydrocannabinol (THC) offerings as well that are distributed in more than 250 U.S. dispensaries.

The problem is that Green Growth doesn't have the cash finance such a deal (and this is often the case with most pot stocks). Although the deal is complicated, the main gist is that Green Growth is issuing stock, as well as providing warrants, to help pay for it. This could mean a whole lot of dilution for existing shareholders, as well as the possibility of these warrants being executed down the road, if the share price of Green Growth rises.

Two weeks after the MXY deal, Green Growth announced a bought deal public offering totaling about 50 million Canadian dollars. [colorLong story short, long-term shareholders are drowning in share issuances and paying the price.