Canada's medical marijuana market heats up as public listings near

Wed Aug 6, 2014 2:21pm EDT
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By John Tilak

TORONTO Aug 6 (Reuters) - Four Canadian medical marijuana producers are working on transactions that will allow them to go public in the next few weeks, according to industry sources and filings, giving investors fresh paths into a growing industry.

Mettrum Ltd, OrganiGram Inc, Bedrocan Canada Inc and PharmaCan Capital, a holding company involved with three licensed producers, will join Tweed Marijuana Inc, now the only listed producer, on the TSX Venture Exchange (TSX-V).

Once these companies become public, investors will be able to directly or indirectly own shares in seven, including the three associated with PharmaCan, of the 13 medical marijuana producers licensed by Health Canada.

Tweed went public via a reverse takeover of a listed company in April and has a market value of C$101 million ($92.7 million).

Its rivals are involved in similar deals, which give fledgling companies seeking access to public markets the ability to list via shell companies already listed on an exchange.

Several medical marijuana firms are listed on the less actively regulated over-the-counter market in the United States.

But the nationwide regulations governing medical marijuana in Canada distinguish it from the U.S. market, where marijuana is illegal at the federal level, and are making the nascent sector attractive to both Canadian and foreign investors.

Producers report robust demand from patients as well as rising interest from fund managers and venture capital firms. Further, signs of early consolidation have emerged, with Tweed acquiring a greenhouse facility in Ontario and PharmaCan buying licensed producer In The Zone Produce Ltd.   Continued...