After a successful 2018, cannabis companies continued to enjoy their moment in the sun in the first month of 2019.
The year kicked off with New York Gov. Andrew Cuomo reiterating his promise to legalize recreational weed in the state during the first 100 days of his third term. Lawmakers in Connecticut introduced a bill to legalize medical weed, and in Minnesota, a bill to legalize adult-use cannabis is making its way through the State Congress.
In this way, cannabis companies are poised to enjoy another successful year. As a result of expanding legalization in the U.S. and ongoing efforts in Canada to remove obstacles the cannabis industry is facing, investors are increasingly confident. More and more companies are making the decision to take their stock public in order to raise money for further growth.
Companies Still Prefer Canadian Listings, RTOs
We identified six cannabis companies that went public in January. Of these companies, only two — Slang Worldwide (CSE: SLNG) and TransCanna Holdings (CNSX: TCAN) — conducted initial public offerings.
The other five pursued reverse takeovers, a popular transaction in the cannabis industry that involves the acquisition of a public company by a private one, allowing it to list faster and with fewer hurdles.
All six companies listed on Canadian markets, although two of them are conducting the bulk of their operations in the U.S. Without any further ado, here are the cannabis companies that went public last month:
◘ Slang Worldwide was co-founded by Peter Miller and Billy Levy, who had previously launched Mettrum Health Corp. and sold it in 2017 to Canopy Growth Corp (NYSE: CGC) for $430 million. Canopy Growth is also an investor in Slang and holds warrants that allow it to purchase 32 million shares of Slang, or around 15 percent of the outstanding stock, if the U.S. legalizes cannabis on a federal level.
In addition, Canopy's subsidiary Spectrum Cannabis Canada Inc. holds 40 percent of Agripharm Corp., a Canadian licensed producer in which Slang has a 20-percent stake.
Slang is engaged in cannabis brands and consumer products. It has a presence in 10 states, and more than 2,600 stores are selling its products, which include the O.penVape, one of the best-selling cannabis products in the U.S.
Slang Worldwide started trading on January 29, listing at CA$1.50 ($1.14). It opened at C$2, but slid to C$1.68 before soaring to C$1.99 toward the end of its first trading day. Overall, Slang's stock has gained 20.50 percent since the IPO.
◘ Pharmacielo Ltd (OTC: PHCEF) started trading Jan. 19 on the TSX Venture Exchange after completing a merger with AAJ Capital 1 Corp. Pharmacielo is the Canadian-registered parent company of the Colombian medicinal cannabis oil producer PharmaCielo Colombia Holdings S.A.S.
Pharmacielo's plans after gonig pbulic include scaling its area under cultivation to 20 hectares (2.15 million square feet) from the current 5.3 hectares (570,487 square feet); completing its 2,300 square-meter (24,757 square feet) GMP-certified Research and Technology Center oil processing and product innovation facility; and launching cannabis oil sales in key markets.
◘ After completing a reverse takeover of IGC Resources Inc. at the end of December, Westleaf (OTC: WSLFF) started trading Jan. 9. Westleaf is a Canadian vertically integrated cannabis company that is working on building a retail footprint across the country under its Praire Records brand. The company has stores planned for British Columbia, Alberta, Saskatchewan and potentially Ontario.
On Feb. 1, Westleaf complted the acquisition of cannabis retailer Canndara Canada and the remaining 50 percent of Delta 9 Cannabis Inc.'s Delta West extraction facility, which gives it total of ownership of 100 percent. Both transactions were all-stock, and Westleaf paid $48.4 million for Canndara Canada and $14.95 million for the Delta West facility.
◘ 3 Sixty Risk Solutions Ltd (OTC: PTVYF) is the parent company of 3 Sixty Secure Corp., a Canada-headquartered provider of security services to the cannabis sector. The company provides transportation services to over 500 customers and 60 licensed producers, transporting arround C$250 million ($190.8 million) in product every month.
The company started trading on Jan. 8 after completing a RTO transaction with Petro Vista. Prior to the RTO, 3 Sixty Secure Corp. had merged with Total Cannabis Security Solutions.
◘ TransCanna Holdings completed its IPO on Jan. 8, selling 4.4 million units at 50 cents each. On Jan. 21, the company said it was approved for listing on the Frankfurt Stock Exchange.
TransCanna provides branding, transportation and distribution services through its wholly owned subsidiaries in California. On Jan. 18, the company said its nonprofit entity TCM Distribution Inc. received a temporary distributor license from the state of California. Last week, TransCanna said it intends to acquire cannabis and hemp advertising and marketing agency Goodfellas Group.
◘ Zenabis Global Inc (CVE: ZENA) commenced trading Jan. 10, two days after Sun Pharm Investments completed the reverse takeover of Bevo Agro, with the resulting entity being Zenabis. Zenabis is engaged in cultivation of medical and recreational cannabis, with facilities in Atholville, New Brunswick; Delta and Langley, British Columbia; and Stellarton, Nova Scotia.
Since its listing, Zenabis has completed two large transactions. On Jan. 22, it acquired Topgro Holdings for C$12 million including debt. On Jan.29, Zenabis said it completed the acquisition of 51 percent of Hillsboro Corp., a producer of kombucha under the True Buch brand. Zenabis and True Buch intend to create cultured tea beverages infused with CBD or THC.
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