CanniMed Deal a Dud as Cannabis IPO Tanks Initially

Early trading in CanniMed Therapeutics (TSX: CMED) was disappointing, as the recent IPO broke its $12 offering price and traded below the $11.28 underwriters price. In the first half-hour of trading, the stock, which opened at $13.11 and traded to $13.18 before trading as low as $10.725, traded about 600K shares. The underwriters included Altacorp Capital as the lead along with Canaccord Genuity, Clarus Capital, Haywood Securities and Mackie Research Capital.

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The $60mm deal, 5mm shares at $12, represented about 1/4 of the approximately 20mm shares outstanding for the company, which has a fully-diluted share-count of about 25mm shares.  CMED is just the second Canadian LP to trade on the TSX, with the majority of the LPs trading on the TSX Venture. While the company is new to the public markets, it has a long history in the Canadian cannabis industry as the sole government provider under the old MMAR program.  In its most recent financials, it reported year-to-date cannabis sales through its third quarter ending 7/31/16 in excess of $6mm, making it one of the leading LPs in terms of sales.

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Breaking news by Alan Brochstein, CFA

ab-byline-ncvBased in Houston, Alan leverages his experience as founder of online communities 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV.

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