Canadian medical marijuana company PharmaCan to go public next week

Fri Dec 12, 2014 5:49pm EST
 
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By John Tilak

TORONTO Dec 12 (Reuters) - PharmaCan Capital, a holding company focusing on the Canadian medical marijuana market, is set to go public next week, opening up for investors a basket of licensed producers and signaling the appetite for a growing industry.

The Toronto-based company has significant stakes of eight medical marijuana producers, including five licensed by regulator Health Canada. It will go public through a reverse takeover of a listed entity, with a ticker symbol on the TSX venture exchange of "MJN".

The move shines a light on the Canadian medical marijuana industry, which is expected to reach C$1.3 billion (US$1.12 billion) in a decade, though investors are also aware of the risks of betting on a new, untested market.

PharmaCan acquires large stakes, typically ranging from 10 to 30 percent, in medical marijuana producers and is engaged in discussions to make more such investments. It also tends to look for seats on the boards of those companies.

"An investor that seeks exposure to the fast-growing medical marijuana industry would be interested in PharmaCan because it mitigates the risk of investing in the industry," said Paul Rosen, chief executive of PharmaCan.

"We've created a diversified, regionally based portfolio of licensed producers," he added. "We're the only company in Canada that has this significant an investment in this many licensed producers."

PharmaCan's stable of licensed medical marijuana producers includes British Columbia-based Whistler Medical Marijuana Co and Simcoe County, Ontario-based Peace Naturals Project. PharmaCan also owns 100 percent of In The Zone Produce, a licensed producer based in Okanagan Valley, British Columbia.

Buying into the company means an investor does not have the hassle of trying to decide which licensed producer to invest in, said Daniel Pearlstein, life sciences analyst at M Partners.   Continued...