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MedReleaf Prices IPO at $9.50 per Share

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Canadian cannabis stocks have been under pressure since early April and this weakness comes as trading volume has seemed to fall off a cliff.

Although these factors are concerning for many investors, companies appear to be less concerned and several licensed medical cannabis producers plan to go public this summer.

MedReleaf Files $100 Million Offering

Yesterday, MedReleaf announced that it will be going public on the TSX exchange in early June under the symbol, LEAF. Many investors have been waiting for this initial public offering (IPO) due to the company's improving fundamentals, its track record, and its listing (will be the second licensed medical cannabis producer to have its IPO on the TSX).

During the IPO and secondary offering, a total of 10,600,000 common shares will be sold at $9.50 per share. This will generate over $100 million in aggregate gross proceeds, with MedReleaf and certain shareholders receiving gross proceeds of $80,700,049 and $19,999,951, respectively.

The offering is expected to close on or about June 7th, at which time the offered shares are expected to commence trading on the TSX under the symbol, LEAF. MedReleaf directors and officers are subject to a 180-day lock-up on 50% of their holdings and a year on the balance.

MedReleaf has generated more than $30 million in revenue during the first three quarters of its 2017 fiscal year. The company plans to use the proceeds to build out its facility which was recently licensed by Health Canada, to expand its existing manufacturing capacity, and to conduct clinical research and product development.

Selling Shareholders Includes Several Well-Known Cannabis Investors

Pursuant to the offering, 8,494,742 shares will be issued by MedReleaf and 2,105,258 shares will be sold pursuant to a secondary offering by the selling shareholders. MedReleaf will not receive any proceeds from the secondary offering and the selling shareholders include: Zola Finance Inc., MENA Investment Network Inc., AJA Holdings 2013 Inc., Rayray Investments Inc., Tikun Olam Ltd., Baronford Heights Limited, Eva Fashion Limited, MedMen Opportunity Fund, and Neil Closner.

The offering will be made through a syndicate of underwriters including GMP Securities as co-lead underwriter and sole bookrunner, Clarus Securities as co-lead underwriter, and including Canaccord Genuity, Cowen and Company, Eight Capital, and PI Financial.

MedReleaf and the selling shareholders granted the underwriters an over-allotment option exercisable in whole or in part for a period of 30 days following the closing of the offering, to purchase up to an additional 1,590,000 shares at $9.50 a share. If exercised in full, this will generate additional gross proceeds of $6,104,985 to MedReleaf and an aggregate of $9,000,015 to the selling shareholders, respectively.

Discover Industry Leading Information on MedReleaf

Although we are favorable on MedReleaf, the sector's recent weakness and volatility may have a negative impact on the IPO. We are excited about this listing and plan to monitor it closely.

Become a Technical420 premium member today to access premium information about this opportunity!


This article was written by Mark Maulden for https://technical420.com/cannabis-article/medreleaf-prices-ipo-950-share on .

This article published in collaboration with Scutify, the best app for traders and investors. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

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