CanaFarma Surges On News Of $20M Financing

Shares in CanaFarma Hemp Products (CAN:CNFA / GER: WKN A2P0WJ) are up 9% this morning to CAD$0.84. This follows Friday’s after-hours announcement that the Company is seeking to raise US$20 million in a new private placement.

As The Seed Investor reported last week, CanaFarma is hot.

The stock is up over 50% since CanaFarma began trading in March. And it is up almost 600% from its March 24th low of CAD$0.13.

Units in the financing are priced at CAD$0.63. Each unit provides the holder with one common share and one common share purchase warrant. Warrants have an exercise price of CAD$0.78, for a period of five years from the date of closing.

CanaFarma’s YOOFORIC™ product line has been generating steadily rising revenue. Sales totaled over $4 million in the first 6 months alone.

To date, these sales have been driven by CanaFarma’s robust direct-to-consumer marketing strategy. However, the Company has already announced its intention to seek out partnerships with larger distributors in the second phase of its marketing program.

YOOFORIC’s organic “full spectrum” hemp oil products are a whole plant extract. This CBD-rich hemp oil provide consumers with the complete spectrum of phytocannabinoids in the hemp plant as well as vitamins, minerals and Omega fatty acids.

The Company’s flagship YOOFORIC™ chewing gum is backstopped by hi-tech: two patents and one pending patent. This allows YOOFORIC™ gum to deliver superior bioavailability but also a higher quality “chewing experience”.

For investors, the new financing positions CanaFarma for further growth. Its recently announced LOI (April 24, 2020) for a 25,000 square foot manufacturing facility completes its internal supply chain. This should translate into greater operational efficiencies going forward and add to already-strong margins.

While some U.S.-based hemp companies are struggling to deliver returns to investors, CanaFarma continues to outperform.

DISCLOSURE: CanaFarma Hemp Products is a client of The Seed Investor.