TORONTO Aug 25 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.