Cap Raises by Sector: One of the companies that raised capital this week came from the Cultivation & Retail sector, and the other came from Infused Products & Extracts.So why haven't we seen more debt issuance? The answer lies in the table below, which shows that the top 10 MSO's, proforma for publicly released data on capital raises and cash M&A consideration, now have more than $2 billion of cash. For the most part, the MSOs are more worried about spending cash than raising it. Most importantly, much of cannabis debt has low or no prepayment penalties giving issuers valuable optionality to react to equity market changes. We believe that even if debt providers require short non-call periods or prepayment penalties, it is probably money well spent.Debt costs have come down significantly. Major MSO's can raise debt with single-digit all-in costs, frequently with no equity kickers.In that case, it makes sense to delay selling additional equity. But suppose you believe that legalization will happen in the relatively near term and produce a significant run up in the market.
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