IPO CAPS MEDICAL MARIJUANA SECTOR’S BUSY YEAR.

CanniMed latest marijuana stock to go public

CanniMed Therapeutics Inc. became the latest and last medical marijuana company Thursday to go public in 2016, capping off a banner year in the burgeoning sector. With just two trading days left in 2016, the company opened the TSX market Thursday, opening with a listing price of $12 a share, but was trading slightly lower than that, at $11.45 per share Thursday afternoon on a down day for the entire sector. That gives it a valuation of some $208 million.

CanniMed, previously Prairie Plant Systems, was one of the first medical marijuana companies to be granted a Health Canada licence to produce in 2013. Prior to that, Prairie Plant Systems had been the government’s official marijuana provider on the earlier program enacted in 2000. Eyeing opportunities in an increasingly attractive market, CanniMed wanted to go public ahead of a big year coming, with the government slated to put legalization legislation on the table in the spring.

“When the market first emerged we had a lot of excess capacity so we couldn’t really justify doing a large (capital) raise at that time because we didn’t have a purpose for it: Now we do,” said Brent Zettl, the company’s president and CEO.

“Now we see the market coming with great energy and we’re seeing that not only the domestic market but international markets are opening up so we said ‘Now we’ve got to get ready,’” for a large wave of demand on the horizon, he added.

It is only the second marijuana company to list on the main TSX exchange — with the rest listing on the smaller venture market.

The company is focused on cannabis oil, something only recently available for sale after a Supreme Court ruling earlier this year.

There have been several other notable marijuana company initial public offerings on Canadian markets in 2016, including a U.S.-focused listing and Uruguay’s biggest player International Cannabis Corp.

Investors have been jumping into the 36 licensed marijuana producers in anticipation of an estimated $6-billion market.

Stocks have risen significantly, especially since the beginning of November, when four states legalized recreational marijuana during the U.S. election. The year 2016 also gave rise to the world’s first “cannabis unicorn” as Canopy Growth Corp. reached a $1-billion valuation. Many companies have since announced they’ve secured millions of dollars in funding for expansion efforts.

Earlier this month, the federal government’s task force on marijuana legalization released a framework report setting out how the government should go about setting up a legal recreational marijuana market, including a big role for existing licensed producers such as CanniMed and Canopy.

In a crowded market, the company is targeting the baby boomer demographic, a base that comprises nearly half of its reported 18,000 patients.

“Baby boomers are coming through their sunset years, they’re finding there’s a lot of health-related issues coming to fruition,” said Zettl.

“The people who are using it, especially through our oil product, are finding a lot of symptom management for their conditions.

“We think its going to resonate with that demographic, especially as we move into more doseable forms, such as gel caps.”