As the anno horribilis for cannabis companies and investors comes to a close, it’s important to remember that for some, the pain isn’t over.  HEXO’s latest announcement of a US $25.0 million direct placement of 14,970,062 common shares at US$1.67/share with institutional investors, which is expected to close Monday, serves as a reminder.  The offer also includes a half-warrant per share to purchase an additional 7,485,032 common shares. The warrants will have a five year-term and an exercise price of US$2.45 per share.

This latest offer does not appear to be bound by the one-year anti-dilution provisions of the CAD $70 million, 8% convertible debentures issued to the founders and a small associated group just two months earlier.  The conversion price for the debentures is $3.16.

The latest stock offer may also not comfort the participants of the oversubscribed offer of $4.00 shares who each received a warrant to purchase one additional share per issued share at $5.60.

The funds will be used for working capital and other purposes, same as the debentures.

Just two days prior, The Green Organic Dutchman (TSX:TGOD) (US:TGODF), which six weeks ago released its third quarter financials that reflected a quarterly loss of $21.2 million on sales of just $2.5 million (down 12.8% from Q2 sales), announced that it had closed the committed portion of a $42.7 financing.   The first tranche, a $27.7 million senior secured term loan with an 18-month term, bearing an interest rate of 13% per annum and secured by a first charge against all assets of the company and its material subsidiaries. The second tranche, the remaining $15.0 million senior secured term, which remains uncommitted, is to be made available upon the lender’s approval achievement of certain milestones, which are at least four fiscal quarters away.

TGOD, also closed its previously announced short form prospectus offering its bought deal with Cannaccord Genuity Corp. a week ago, providing the company with $27.6 million gross.  A total of 36,800,000 units were issued at $0.75 per unit. Each Unit is comprised of one common share and one-half of one common share, entitling the holder to acquire one common share for a period of 36 months from closing of the transaction at an exercise price of $1.00 per warrant.

Clearly, these are times for bold action and vision with respect to these companies, who both had only a few months cash left, and showing tremendous losses.  In the case of TGOD, combined losses of almost $54 million on sales of under $8 million in just nine months is unsustainable.  Of this staggering number, $30 million is attributable to G &A and $11 million in share-based compensation.   Are these companies in a turnaround (after such brief growth spurts) or in a death spiral?

2020 is coming, so here’s hoping the ‘vision’ matches the year.