2019 was a painful year for the cannabis sector as a range of structural issues affected the growth of the industry and also resulted in significant drops in the stock prices of various companies. TGOD stock has been hovering near its 52-week low over the past few weeks. Let's recap the recent key developments from The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF).
Successful Credit Facility
Towards the end of December, the company announced that it had managed to tie up a deal with Maynbridge Capital Inc, by way of which it is going to be provided with a first lien credit facility worth $42.7 million. The company announced that the package is made up of a $27.7 million term loan deal that will mature in 18 months. The rest is made up of a $15 million secured term loan that The Green Organic Dutchman can access if it meets certain operational and financial targets. The company believes that it is going to be able to meet those targets by Q3 2020.
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At the time of writing, TGOD stock is trading lower by 2.90% at $0.67 CAD.
The current sell-off in TGOD stock may attract a lot of interest from market participants, and investors could do well to track it closely over the coming days. Some market experts now believe that The Green Organic Dutchman could well prove to be one of the cannabis stocks with a major recovery in 2020. The company is involved in producing organic marijuana, and such marijuana can be sold at a steep premium.
Moreover, the company is also working towards ramping up its production capabilities in the first quarter of this year. It is possible that the market is currently trying to figure out whether it can successfully ramp up its production capabilities quickly enough.
TGOD stock has lost about 75% over the past year and is down over 85% from its March peak price of $5.81 CAD. The stock recently made a new 52-week low of $0.62.
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