By: Serach Nissim
New York State’s pot legalization is already proving lucrative for cannabis firms.
PharmaCann, one of the original 10 cannabis license holders in New York, has quietly filed for an initial public offering that could value it at above $1 billion, as per a source for Reuters.
In March, New York State became the 16th state in the country to legalize recreational weed. The legalized sales are slated to start sometime next year. The company’s IPO could take place as early as this fall, one source said.
As reported by the NY Post, PharmaCann, which also operates in five other U.S. states, already operates four medical cannabis retail stores as well as a cultivation facility in New York. It will likely try to dual-list its shares on the Canadian Securities Exchange and in the U.S. for over-the-counter trading, said a source who did not wish to be identified, as the filings are confidential.
Though 18 states in the U.S. have already legalized recreational marijuana, it is still illegal on the federal level and companies like PharmaCann, which grow or sell the plant, are not allowed to list on the New York Stock Exchange or the Nasdaq. The Chicago-based company has tapped Canadian investment bank Canaccord Genuity for the IPO. Canaccord is expected to be the lead underwriter, with other banks also joining, the sources added. Canaccord did not immediately comment. A PharmaCann spokesperson declined to comment. “We have no comment on this anonymous report by Reuters,” Jeremy Unruh, PharmaCann’s senior vice president of public and regulatory affairs, wrote in an email to MJ Biz Daily.
US legal cannabis sales could reach $45 billion in 2025, as per analysts at JMP Securities. NY’s market for recreational marijuana is expected to become one of the largest in the world, and companies are gearing up to get a piece of the action. In June, Canadian Cronos Group bought a 10.5 percent stake in PharmaCann for $110.4 million. As per the Post, that deal valued the company at t $1.1 billion, and the IPO would probably use a higher valuation.
PharmaCann may still decide to take the IPO off the table, rather aligning itself with a blank-check firm as an alternate way to go public. The company has reportedly received numerous takeover offers in the last few months alone.
PharmaCann’s competitor AWH Holdings went public in May, and the shares have jumped 38 percent since, leaving it a market valuation of $1.9 billion.
