TORONTO (Reuters) - Canadian medical marijuana producer Bedrocan Cannabis Corp is set to go public on Monday, offering investors an alternative to Tweed Marijuana Inc in the nascent market, according to two sources familiar with the company’s plans.
The company has received an approval to list, under the ticker symbol “BED”, on the Toronto Venture Exchange and will do so in a reverse takeover, the sources said.
A spokesman for Bedrocan said the offering was planned for the coming weeks.
The move, which would come about four months after Tweed’s listing, highlights the growing appeal of a market the federal government has projected will grow to C$1.3 billion ($1.19 billion) in the next 10 years.
Unlike the United States, where medical marijuana is illegal on a national scale, Canada is one of the few countries with a federally-regulated program.
As a result, the industry is receiving increasing interest and funding from venture capitalists and other investors in Canada and the United States.
Bedrocan is a licensing partner of long-time Dutch medical marijuana producer Bedrocan BV, which currently supplies the Canadian company’s product.
Toronto-based Bedrocan, which received its license from regulator Health Canada in December 2013, is building out a 52,000-square-foot marijuana growing facility in the Greater Toronto area that it expects to complete by the end of the year. It has 1,100 registered patients across the country.
“We will be ready to start cultivating by the end of the year, and we will have the product ready for sale by early second quarter of next year,” Chief Executive Marc Wayne said on Wednesday.
The company was valued at around C$57 million at the time of its most recent financing, he added.
Bedrocan is not raising any capital tied to this listing, Chief Financial Officer Michael Singer said. “We believe we’re sufficiently capitalized to execute on our current growth plans.”
The company has raised about C$16 million so far and could use warrants to raise an additional C$16 million, if needed, he added.
Tweed, whose market capitalization is C$106 million, went public through a similar reverse takeover in April, using a shell company already listed on an exchange.
The method, often used by smaller firms to access public markets, is typically faster and cheaper than traditional initial public offerings.
PowerOne Capital Markets and Dundee Securities are providing investment banking services for the offering.
OrganiGram Inc and Mettrum Ltd are two other licensed producers that are expected to go public in the next few weeks.
(1 US dollar = 1.0961 Canadian dollar)
Editing by Jeffrey Hodgson and Andrew Hay