Interesting
The silent killer of cannabis stocks
However, all of these risks are well known and readily visible. There's one potentially silent killer which could wreck marijuana stocks that investors seem completely unaware of -- dilution.
The legal marijuana industry isn't particularly profitable, save for a handful of the larger players in the Canadian market that have managed marginal profits as a result of medicinal cannabis sales. This means cash flow for most pot stocks is either marginally positive or negative. For those that are rapidly expanding their growing capacity organically or through acquisitions, cash flow is most decidedly negative. Therefore, in order to generate the capital needed to expand growing capacity, marijuana stocks in Canada have been turning to bought-deal offerings.
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