A plant that was once considered a “gateway drug” has emerged from the shadows for what it really is – a potential emerging medical success story in multiple treatment arena. Beyond early scientific studies demonstrating its potential medical efficacy, cannabis has also emerged as a popular lifestyle and wellness product. Cannabis’ main active compounds, THC (tetrahydrocannabinol) and CBD (cannabidiol), have been rigorously studied, tried and tested for their therapeutic abilities. It’s not hard to see why investors are placing major value in the plant, beyond the value of the stock price.
Now, there’s more chances than ever for investors to venture beyond the cannabis stigma and invest their money in a segment of the market that is expanding as we speak, not to mention becoming widely accepted by Millennials, Baby Boomers and Gen X-ers.
According to Grandview Market Research, as of 2025, the legal cannabis market will be worth $146.4 billion. If the predictions are correct, the value of the legal cannabis industry will grow at a CAGR of 34.6%. Dollar signs permeate the cannabis market and it just so happens that marijuana is permeating various areas of the current mainstream retail market, from the fizzy drinks industry to the beauty and wellness industries.
Rapid rise of legal cannabis consumption brings an opportunity for cannabis companies to go public with an Initial Public Offering (IPO). With so much capital raising potential (thus, potential to expand operations), there’s no wonder why recreational cannabis and medical cannabis companies are going public.
Which cannabis companies have already gone public with a IPO?
An early bird in the cannabis IPO space was Nutritional High, which became the first publicly-traded recreational cannabis company to go public in Canada on March 13, 2015.
It was on this date that the company announced its IPO at a per-unit offering price of $0.05. The total units included in Nutritional High’s IPO amounted to 32.9 million, with total gross proceeds totaling $1.645 million. The company funneled its IPO funds into its owned cannabis oil infused range of products, of which are distributed through the premium flagship brand named FLÏ™.
Following in Nutritional High’s footsteps was Canadian cannabis producer Cronos Group, which began trading shares of its company on the NASDAQ back in February. It was an exciting time that propelled the brand to the forefront of the pot stock market.
Then there’s the creator of Charlotte’s Web CBD oil. Also known as “CW Hemp Oil,” this product was developed to relieve seizures in a young girl called Charlotte Figi. The Stanley Brothers succeeded in their quest to help Charlotte, not to mention many other epilepsy sufferers. The pot stock IPO accrued $150 million in a Canadian offering to list on the Canadian Securities Exchange (CSE).
Let’s not forget about Aurora Cannabis, either. In October, the Canadian cannabis producer was preparing to list on a major U.S. stock exchange, but not before Tilray beat them to it. Tilray has probably been the best-performing cannabis IPO, with the British Columbia-based cannabis producer’s shares skyrocketing 800% since its stock-trading debut.
However, Tilray didn’t get in on the action before Canopy Growth began trading on the New York Stock Exchange (NYSE) back on May 24 of this year. Let’s not forget about The Green Organic Dutchman Holdings Ltd., too, which certainly deserves a mention for its organic production methods. Since sustainability is key in today’s legal cannabis industry, it’s always a good idea to debut sustainable cannabis cultivation with an IPO.
How can investors harvest a comfortable profit from cannabis IPOs?
There are myriad reasons why a cannabis company might want to go public with an IPO. Firstly, it establishes the company as an expert in the ever progressing field of medical and recreational cannabis. Furthermore, it guarantees additional exposure amidst an ocean of competing brands.
In the event that an investor is keen to funnel their funds into a cannabis IPO, the extra funding can aid a cannabis company in bolstering sales, marketing, and strategic brand expansion. It’s not necessary to use the funds from a cannabis IPO straight away, either. A brand may choose to use the money for future mergers or acquisitions, whether medically or recreationally related. The capital may also be spent in any number of ways, including establishing various forms of corporate infrastructure, continuing to improve the leadership team, and more.
A fine example is the investment that drinks producer Constellation Brands’ made in Canopy Growth back in August. The $4 billion price tag certainly caught the financial world’s attention – a price that will enable Constellation and Canopy Growth to research and develop cannabis-infused beverages. The cannabis drinks market segment is forecasted to reach $600 million in the next few years, according to analysts at Canaccord Genuity, proving the profit potential.
Nutritional High knows what it takes to initiate an IPO, what with the company being one of the first publicly traded cannabis companies to do so. Consider learning their business model outlook, market predictions, and expansion models if you want to deviate risk and broaden brand visibility on a colossal scale in the biggest U.S. cannabis market (California) and beyond.
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