Medical Cannabis Firm PharmaCann Files Confidentially for IPO

Kimberly Redmond  |

Image source: PharmaCann

PharmaCann, one of the largest medical marijuana companies in the US, plans to go public this fall in a deal that could value the company well in excess of $1 billion.

Citing sources familiar with the matter, Reuters reported on Monday that the Chicago-based company is likely to dual-list its shares on the Canadian Securities Exchange (CSE) and on the US over-the-counter market.

Sources told Reuters that PharmaCann had confidentially filed its paperwork with regulators in Canada and the US within the past month and has tapped Canadian investment bank Canaccord Genuity Group to serve as lead underwriter for the offering.

Neither PharmaCann nor Canaccord offered a comment on the report Monday.

Launched in 2014, PharmaCann operates six production facilities and 23 dispensaries in New York, Illinois, Ohio, Maryland, Pennsylvania and Massachusetts via the Verilife brand.

PharmaCann has fielded several takeover offers, including ones from special purpose acquisition companies.  In 2018, it was poised to be acquired by Los Angeles-based MedMen Enterprises in a $682 million all-stock deal, but the transaction fell apart a year later. 
 
In June of this year, Toronto-based Cronos Group purchased an option to acquire 10.5% of PharmaCann for $110.4 million. 

PharmaCann’s potential listing comes in advance of New York’s launch of its legal recreational marijuana market, which is expected next year. 

Earlier this year, New York — where PharmaCann is among the 10 original cannabis licensees — legalized the recreational sale of cannabis for adults 21 and older.

As of July, 18 states, plus Washington, DC, have legalized use of the substance for recreational purposes and 37 have authorized it for medical reasons. 

As a growing number of states approve recreational cannabis use, companies are rushing to capitalize on what could potentially be an enormous legalized industry.

By 2025, legal marijuana sales for both medical and recreational use are expected to reach more than $41 billion, according to a recent analysis by New Frontier Data.

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Source: Equities News

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