New ticker TGOD debuted on the TSX VE Wednesday – seemingly sent from heaven for organic-minded marijuana investors.
Toronto-based Green Organic Dutchman Holdings Ltd finished up 8% from its opening price, peaking at $4.25 before closing at $3.89. It performed encouragingly again yesterday, closing at $4.09.
TGOD’s IPO, the largest for a cannabis company to date, completed a cash raise of $115 million (31.5 million units at $3.65), adding to the £130 million of capital previously raised.
Danny Brody, VP of Investor Relations, told Wealth Professional that both the IPO and private financing were oversubscribed and that its opening foray into the public markets leaves the company with an opportunity to become a global leader in the space.
He said: “It has always been part of our business plan to access the public markets. To list directly on to the TSX is a significant achievement and provides the company with access additional capital for further growth initiatives.
“We have experienced significant interest from both financial advisors and retail investors. We attribute this largely to our retail-first approach that we have emphasized from the very beginning. We are proud to advise that our IPO financing and previous private placements were all oversubscribed.”
He added: “In our view there are several factors that sets TGOD apart, however our all-natural and organic growing principles are certainly what we are known for and what we stand for, it is in our name.
“Our alliance partners and the relationships we have developed are providing us with the opportunity to become a global leader in low-cost, high-quality cannabis.”
Aurora has backed TGOD heavily, purchasing 17.5% of the IPO having earlier this year invested $55 million and committed to buying 20% of TGOD’s future output.
According to reports, Aurora has an option to increase its ownership interest to more than 50% should the firm reach certain operational and financial milestones.
Brody said investors worried about the sector’s volatility should look at what he call’s TGOD’s “very unique” IPO structure, with shares subject to a minimum six-month hold period from listing date.
He said: “TGOD has a very unique share structure where only the IPO shares are free trading for six months, which allows current investors peace of mind while the earlier investors get the benefit of value creation from the $115 million.”
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