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IPO watch: CannVaLate plans $65m ASX debut ahead of a rash of cannabis floats
Cannabis clinic CannVaLate is planning a $65 million Initial Public Offering next year, joining what may be a rash of cannabis listings as the sector wakes from its 2018 dormancy.
The company has raised $4 million from wealthy investors — and is expecting to raise another $4m from institutions next month ahead of a February or March listing.
Chief Dr. Sud Agarwal says he’s talking to brokers now — and may consider a dual retail offer on a platform like OnMarket.
Desperate for marijuana IPOs
There have been just two medical cannabis listings this year so far, Elixinol Global (ASX:EXL) in January and Althea (ASX:AGH) in September.
Stockhead understands that at least four more pot listings are in the wings in the coming months: possibly Cronos Australia, the local arm of the $C1.8bn Canadian pot stock Cronos Group, and two coming out of Africa.
Rival clinic operator Emerald Clinics, run by AusCann (ASX:AC8) exec Dr. Stewart Washer, is due on the ASX at the end of March.
Dr. Washer says they have “big funds from America” interested in investing in Emerald and one of the founders of dispensary giant MedMen — worth $C2.7bn — is keen to work with them.
Patient access businesses are taking off, if not patient access
The clinic business model began rising earlier this year as patient access became the big problem after the first growers and manufacturers started to receive their licences.
Dr. Sud says their model is different to that being explored by Emerald and Cannabis Access Clinics.
The two latter companies are rolling out stand-alone clinics: Cannabis Access in Sydney and Melbourne with plans for Brisbane and Adelaide, and Emerald plans to have a Perth clinic open in December and a Sydney one in January.
Instead, CannVaLate is offering a software backend that matches an application with a licensed producer, like Little Green Pharma, Cann Group (ASX:CAN) and MGC (ASX:MXC).
Dr. Sud says a GP, rather than a specialist, can put in an application for a medical cannabis product under the Special Access Scheme and they handle the whole backend application process.
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