The investment arm of Ottawa-area pot producer Canopy Growth went public on the TSX Venture Exchange Thursday morning, sending an already-hectic cannabis market into even more of a frenzy.
Canopy Rivers, which makes investments in Canadian cannabis firms alongside strategic partner Canopy Growth, went public Thursday following the reverse takeover of shell company AIM2. A few minutes after the company began its public listing – under the symbol “RIV” – the TSX-V temporarily halted trading of the shares due to an imbalance of orders.
Trading picked up again an hour later. By midday, Canopy Rivers’ 361,000 shares had been traded 15 million times – for comparison’s sake, that’s 10x more volume than Shopify, one of Ottawa’s largest tech firms, saw by the same time that day.
Shares of Canopy Rivers hit a price of $9.08 on Thursday afternoon, giving the firm a market cap of roughly $3.28 million.
The pot investment firm’s public listing comes during a busy time for the Canadian cannabis market as national firms prepare for the legalization of recreational marijuana on Oct. 17.
For Smiths Falls-based Canopy Growth’s part, the firm’s share price has more than doubled in the past month, trading around $65 on the TSX as of Thursday. Gatineau-based HEXO has also seen its share price nearly double over the same timeframe.
On Wednesday, Nanaimo, B.C.-based pot producer Tilray went on a wild ride, surging more than 90 per cent then briefly dropping into negative territory and rebounding to close up roughly 38 per cent, at more than US$214.
Spreading Canopy seeds
Canopy Rivers got its start in 2017. This past January it raised $26 million through a private round, including a $5.14 million investment from Canopy Growth, and followed that up this summer with another $104 million placement. Among the firm’s portfolio is Gatineau-based pot firm LiveWell and Canopy Growth-owned Agripharm.
Speaking to OBJ this past summer, Canopy Rivers co-founder and principal of XIB Financial Sean McNulty was bullish – to say the least – on the investment opportunities in the cannabis space.
“I think that commercialization on a global scale of cannabis is probably the most compelling investment opportunity in the history of capitalism."
“I think that commercialization on a global scale of cannabis is probably the most compelling investment opportunity in the history of capitalism,” he said.
Though both Rivers and Growth share the Canopy name – as well as a chief executive in Linton – McNulty said the investment company’s financing is more about building a network of cannabis brands than controlling a firm’s operations. An investment from Canopy Rivers will open a firm up to expertise and product partnerships with the larger Canopy brand, he said, but won’t require a firm to relinquish control of the company as is usually the case in Canopy Growth’s acquisitions.
“They get to hitch their wagon to Canopy indirectly by taking money from Canopy Rivers,” McNulty said. “We’re bringing something to the table that’s much more valuable than just the money.”
Earlier this year Canopy Rivers hosted a pitchfest in British Columbia looking for cannabis entrepreneurs: micro-growers, hemp producers or retailers. Its investments have also branched out in cannabis-adjacent industries, putting $5 million into a New Brunswick-based marijuana media platform in April.
”What we’re trying to build is a portfolio that represents an entire ecosystem of complementary cannabis businesses,” McNulty said.
"Canopy Rivers presents a world of opportunity for its partners and for Canopy Growth. It's the type of relationship that allows us to continue to grow our lead in this incredibly dynamic industry, and we at Canopy Growth couldn't be more excited for Canopy Rivers to be taking this transformative step into the public markets," added Linton in a statement on Thursday.
Elsewhere in Ottawa pot
Ottawa’s other pot companies have also had an eventful Thursday. CannaRoyalty, a cannabis company holding firm targeting California’s burgeoning industry, consolidated two of its holdings in the western state.
The Ottawa-based firm announced Thursday it would merge its two California-based distributors, Alta Supply and RVR, to create a large third-party distribution platform with access to a majority of the state’s licensed dispensaries.
National Access Cannabis, which is targeting western Canadian retail opportunities, announced Thursday that it had executed on its agreement with the government of Manitoba to operate 10 privately-owned cannabis stores in the province. Ottawa-based NAC says it’s planning to open another five outlets on First Nations land in Manitoba and previously said it expects to have 30 locations in operation by Oct. 17.
– With reporting by Rosa Saba and files from Canadian Press