The cash burn last Q was due to the development on the Mildura facility. If they're planning to scale back the work then the cash burn shouldn't be as high. You need to consider operational cash flow rather than investing cash flow. If you look at this in the last cash flow report you can see that operational cashflow was close to positive. They also say (which I take with a grain of salt) that there will be some proper revenue generation in Q1. If they decide to scale back the investment into the Mildura, which they have said they'd do in a previous announcement, then cash flow can still be salvageable to a healthy position (if these promised revenues actually come through). It appears they're trying to realign their investing with what now appears to be a softer demand than originally expected. They might be able to pull it off, get cashflow in order and then scale up in the future as the demand comes through. I think it will still be years for medical cannabis to really take off.
That being said I don't understand why the price is rebounding like this. It doesn't make sense and I'm concerned that something fishy is going on.
IMO DYOR
CAN Price at posting:
93.5¢ Sentiment: None Disclosure: Held
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