Canadian medical marijuana company OrganiGram set to go public
TORONTO (Reuters) - Canadian medical marijuana producer OrganiGram Inc is set to go public on Monday, its chief executive said, the second such firm to list on the venture exchange next week, highlighting investor appetite for a high-growth industry.
OrganiGram and Bedrocan Cannabis Corp both plan to list on Aug. 25. The two firms, via reverse takeovers, will join Tweed Marijuana Inc on the TSX Venture Exchange giving investors in public markets three licensed producers to choose from. Tweed went public in April and is valued at C$100.8 million ($92.11 million).
Canada appeals to U.S. and global investors because of its federally regulated program and contrasts with the United States, where medical marijuana is illegal at the national level. Regulator Health Canada estimates that the market will grow to C$1.3 billion over the next decade.
"The investment community is seeing Canada as a safe place to invest due to the regulatory framework," said Chief Executive Denis Arsenault, noting the firm had seen "tremendous" interest from U.S. and Canadian funds.
Moncton, New Brunswick-based OrganiGram wants to capture the Eastern Canadian and French-speaking markets. It has started to establish a sales force in Québec.
The company, which received its license in March, began production later in the month and will start shipping the product next week. It has more than 1,000 patients on the waiting list to receive the drug.
OrganiGram has raised C$10.6 million so far, and its latest financing this month was oversubscribed by four times, Arsenault said. The company was valued at C$36 million based on the recent round.
OrganiGram will list under the ticker symbol "OGI."
Jacob Securities and Jordan Capital Markets are providing investment banking services for the company, while McMillan and Tripp Business Law are giving legal advice.
Reverse takeovers, a method used by smaller firms to access public markets, are carried out using a shell company already listed on an exchange. They are typically faster and cheaper than traditional initial public offerings.
(1 US dollar = 1.0944 Canadian dollar)
(Reporting by John Tilak; Editing by James Dalgleish)