TGOD stock is down nearly 20% this morning after The Green Organic Dutchman (TSX:TGOD) (OTCQX:TGODF) announced it was reviewing alternative forms of financing in order to complete the construction of its facilities in Ontario and Quebec.
TGOD Stock Struggling in Market Headwinds
The Green Organic Dutchman had previously been in talks to engage in standard bank facilities and equipment leasing in order to finance the completion of its Ancaster, Ontario site, and Phase 1A of its Valleyfield, Quebec facility. However, TGOD has now said that those forms of financing are no longer available to the company on acceptable concerns within the timeframe required, citing changing market conditions. As a result, investors have become concerned as to how this may impact the company's ability to fulfill its 2020 supply agreements, leading to a sharp drop off in TGOD shares.
Hope for Investors
Investors' concerns may be slightly put at ease by the fact that the Ancaster facility is near full completion, with all grow rooms licensed by Health Canada and substantial completion expected on the cultivation facility in six weeks. The Green Organic Dutchman has said it will submit the final evidence package to Health Canada by the end of November for final approval. TGOD stock may be boosted by news that the company will prioritize any secured funding in order to accelerate commercial production at the site ahead of legalization 2.0.
Worst Case Scenario
The worst-case scenario for The Green Organic Dutchman appears to be how the delay in completing construction would slow down the company's entry into the legalization 2.0 market, as cannabis firms across the board prepare for a surge in demand as consumers flock to alternatives to smoking. Investors in TGOD stock may have to brace for a further hut as the company said it may revise the construction schedule at both facilities if it is unable to obtain financing on sufficient terms, adding that there are no assurances today's update will result in the completion of any transaction.
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