The Canadian cannabis sector’s largest IPO to date is a dud. The $100mm MedReleaf (TSX: LEAF) IPO was priced at $9.50 but opened for trading at $7.51 before trading as low as $6.81. The stock has traded almost 500K shares in the first 10 minutes of trading at a volume-weighted average price of $7.26 and a high of $7.77.
The company sold 80% of the shares, while existing shareholders sold the balance. At the offering price, the company was valued at just under $900mm. In the first three quarters of Fiscal 2017, it reported sales of approximately $30mm, making it one of the largest LPs in terms of market share, though the company reported a sequential decline in sales in Q3 ending 12/31 after new reimbursement rules for veterans went into effect in November.
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