As the cannabis public market continues its trailblazing expansion across the US and Canadian markets more and more stocks are coming online for investors to gain exposure into the sector.
Thanks to the legalization process in Canada the cannabis industry has gained even more legitimacy and despite the US remaining an illegal space for the drug, positive momentum is building for an update in the status of cannabis.
Here the Investing News Network (INN) brings a closer look into some of the top cannabis companies that have gone public since May 2018.
FSD Pharma (CSE:HUGE)
FSD Pharma is a cannabis company working on the construction of a new facility in Ontario expected to give the company’s LP subsidiary FV Pharma 200 million grams of dried cannabis flower per year.
“[W]e are committed to cultivating the highest quality cannabis at scale by building out the world’s largest, state of the art, hydroponic cultivation and processing facility,” Thomas Fairfull, President and CEO of FSD said in a statement.
Chuck Rifici CEO of Auxley Cannabis Group (TSXV:XLY), formerly Cannabis Wheaton Income, said the blueprints for the first stage of the FSD facility are now complete. Auxley has served as a streaming partner for FSD.
According to the terms of the deal, FSD will grant 49.9 percent of all cannabis product produced at the new facility in perpetuity. Auxley has provided financial, design and operational support to FSD.
The company launched its public shares on May 29 on the CSE and since then has seen a 25 percent decline to its share value, despite an initial strong response from the market and broken records in terms of daily volumes on the CSE.
On Wednesday the company closed with a share price of C$0.09 and a market cap of C$118.77 million.
Green Thumb Industries (CSE:GTII)
Known as GTI this company is a multi state cannabis operator in the US. The company started trading on Wednesday thanks to a reverse takeover of Bayswater Uranium Corporation and after obtaining approval from the Canadian Securities Exchange (CSE).
GTI operates and oversees the development of its branded retail cannabis dispensaries called RISE. According to a statement the company currently owns seven manufacturing facilities and holds the licenses of 50 retail locations across Nevada, Florida, Massachusetts, Illinois, Ohio and Pennsylvania.
During its first day of trading, shares of the company reached a one-day high of C$9.55. After the closing bell, GTII was valued at C$8.95 per share. In relation to the public launch, GTI was able to raise C$87 million through a brokered and non-brokered private placement.
MedMen Enterprises (CSE:MMEN)
MedMen is a cannabis dispensary operator in the US, with stores across California, Nevada and other legal jurisdictions in the US. The company has established a modern look for its stores with various tablet displays aiding customers.
The stock for MedMen launched on May 29 on the Canadian Securities Exchange (CSE), the de-facto public listing option for US operators, since it doesn’t restrict US assets despite the current status of the drug in the country.
The company also plans to work on a Canadian strategy thanks to a partnership with Canadian licensed producer (LP) Cronos Group (NASDAQ:CRON; TSX:CRON). MedMen will operate retail dispensaries in legal jurisdictions once it obtains clearance from the local government and federal regulations allow its entry.
MedMen came under criticism as part of its public launch due to a C$143 million raise valuing the company at over C$2 billion. The company had also granted CEO Adam Bierman and president Andrew Modlin almost all voting power with each owning one million supervoting shares.
“It’s about Andrew and I making sure that we can continue to make the best decisions for the long term of this company,” Bierman told the Globe and Mail.
Nearly a week after the launch of MedMen’s stock, the company updated the compensation plans for its executive team, another item of criticism for the company.
Now Bierman and Modline will receive their long-term incentive plan units in three sets of thirds: first when MedMen’s subordinate shares reach C$10 in value, then when the price gets to C$15 and finally once the share price is worth C$20. “This modification to the grants under the LTIP was made to provide greater economic alignment with MedMen’s shareholders,” MedMen wrote.
Since its public debut, MedMen has increased in share value by 14.07 percent to reach a closing price of C$4.54 per share on Wednesday (June 13).
The Green Organic Dutchman joined the Toronto Stock Exchange (TSX) on May 2, becoming the eighth cannabis company to be listed on the premier Canadian public exchange.
This cannabis LP entered into a strategic partnership with fellow TSX producer Aurora Cannabis (TSX:ACB) in early May. According to the announcement, Aurora has participated in raising funds for the company and owns a 17.62 percent stake in it as well, with the potential to increase it to majority ownership according to Aurora’s third quarter fiscal 2018 results.
Aurora will also be able to purchase 23,000 kilograms per year of cannabis product from TGOD.
The company is working on the construction of an 820,000 square foot hybrid grow facility. The company projects, once this facility is completed, to hold an overall 116,000 kilograms of production per year.
TGOD has revealed a planned entry into the global beverage industry thanks to the potential of cannabis-infused drinks. “The focus will be to create industry-leading branded products, and to supply organic base ingredients for use in global beverage brands,” TGOD wrote.
Since its launch the company has increased its share price in value by 74.014 percent from its original asking price of C$3.65 per unit to reach a closing price on Wednesday of C$6.11.
Future debuts in the public markets
Recently the Globe and Mail reported private cannabis producer Tilray is exploring the possibility to become a public company.
The unnamed sources for the reporting said the company is evaluating a US exchange to launch its common shares.
“Tilray will need additional capital over time. We have various routes to that – additional rounds of financing, maybe the public markets. We will do the right thing at the right time,” a spokesman for Tilray told the Globe and Mail.
During a conference call to discuss a recent acquisition by MPX Bioceuticals (CSE:MPX), CEO Scott Boyes was asked if he had heard from other US-focused operators coming to the public markets.
“You will see mergers of public companies with large multistate private companies,” Boyes said in response to a question by cannabis analyst with 420 Investor Alan Brochstein. “You may even see mergers of public companies, we’ve seen some consolidation up here north of the border already.
“In terms of companies coming to the public markets I know some of the brokerage houses here in Toronto have just been overwhelmed with the interest they’ve received from US participants about going public in the Canadian market space,” Boyes said.
Province Brands of Canada intends to launch its common shares on the TSX Venture Exchange later this year through a reverse takeover of the Colson Capital Corporation (TSXV:COLS).
Trading for Colson shares have been halted and are expected to restart once Province Brands completes the acquisition.
The company is focused on the development of adult beverages, in particular, beer, infused with cannabis through a patent-pending process.
“Province Brands’ mission is to create safer and healthier alternatives to alcohol through a portfolio of products that intoxicate using cannabis, including beer brewed from the cannabis plant rather than barley,” Dooma Wendschuh, CEO of Province Brands said.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: FSD Pharma and The Green Organic Dutchman are clients of the Investing News Network. This article is not paid-for content.