Canadian marijuana firms OrganiGram, Bedrocan soar on market debut
TORONTO Aug 25 (Reuters) - Shares of Canadian medical marijuana producers Bedrocan Cannabis Corp and OrganiGram Holdings Inc jumped as they began trading on the TSX Venture exchange on Monday with investors expecting fast-growing demand in the fledgling industry.
The companies are the first major alternatives to Tweed Marijuana Inc, which was listed in April. The offerings mean three of the 13 medical marijuana producers licensed by regulator Health Canada are now public.
Investors piled into the two stocks, pushing them well above their issued prices of 85 Canadian cents per share.
Both retail and institutional investors are showing strong interest in the Canadian medical marijuana industry, which the government projects will reach C$1.3 billion in a decade.
Bedrocan shares advanced to C$1.20, while OrganiGram gained to C$1.94. More than 4 million Bedrocan shares had changed hands by early afternoon, making it the second most heavily traded stock on the venture exchange.
"It speaks to the appetite out there for marijuana names with licenses," Jacob Securities analyst Khurram Malik said.
"There are (now) more ways to play companies with licenses," he added. "It's a sign that things are maturing, at least in the public markets context."
Malik expects both companies to be valued at close to C$100 million based on Monday's trading.
Moncton, New Brunswick-based OrganiGram is looking to capture the Eastern Canadian and French-speaking markets.
Toronto-based Bedrocan has a licensing partnership with Dutch medical marijuana producer Bedrocan BV, which currently supplies the Canadian company's product.
Both companies went public through reverse takeovers, which are carried out using a shell company already listed on an exchange. They are typically faster and cheaper than traditional initial public offerings.
PharmaCan Capital, a holding company involved with three licensed producers, and Mettrum Ltd are two other marijuana firms that are expected to go public in the coming weeks.