Eek. Talk about volatility. Who would've thought that the biggest equity raiser in Canada's marijuana industry thus far would underperform on its debut on the CSE? I didn't! But that's exactly what happened to Curaleaf Holdings stock.
Curaleaf Holdings Stock
Curaleaf Holdings (CSE:CURA) opened lower in its trading debut on Monday after raising a massive $520 million CAD. Curaleaf Holdings stock opened at $8.70 CAD on the CSE, despite its offer price of $11.45 CAD. It recovered 18% during the morning but still remained below the issue price at $10.30.
Raising More than Expected
The US cannabis retailer raised almost three-times its intended $150 million offering. This gave it a market value of about $4 billion.
However, according to Russell Stanley, managing director for equity research at Beacon Securities, Curaleaf Holdings stock trading lower "is not unusual when a company increases the size of the raise."
"We were quite surprised by the demand [...] being one of the larger players in the US, there was a lot of attraction in investing in a company that has a multi-state footprint.”
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About Curaleaf Holdings Stock
Curaleaf operates across 12 US states with 28 dispensaries, 12 cultivation, and 9 processing sites. It will grow that number to 41 stores by next year and further to 69 by the end of 2020.
The company has plans to become the biggest cannabis company in the US. When it achieves this, it will look to take over other markets.
"If we can build the biggest company in the U.S. we’ll have the wherewithal, when we get to maximum penetration here, [to] start looking at other markets," Jordan said.
Despite a federal ban on marijuana in the US, the country still accounts for almost 90% of the $9.5 billion in global sales in 2017, with states such as California and Florida marked as cannabis meccas.
Featured Image: Depositphotos/© ijeab
