In this market news, the much-anticipated debut of Canopy Rivers Inc. (TSXV:RIV), one of the Canadian marijuana stocks, is showing signs of fading momentum
SmallCapPower | September 24, 2018: Canopy Rivers Inc. (TSXV:RIV), a spinoff from Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), surged 150% in its stock market debut on Thursday from its offering price of $3.50, to close at $8.75. Canopy Rivers saw extreme volatility in its trading debut as a result of investor frenzy over the nascent cannabis sector. Canopy Rivers, one of the Canadian cannabis stocks, rose to an intraday high of $11.82 per share on Thursday while hitting a low of $7.50. Its stock fell more than 11% the following day on Friday.
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Canopy Rivers was spun out from Canopy Growth Corp. in July after completing a $104 million private placement. Its shares began trading following a reverse takeover. The offering was led by Canadian Imperial Bank of Commerce, GMP Securities LP and Eight Capital.
Canopy Rivers is a unique investment and operating platform structured to pursue opportunities in the emerging global cannabis sector. It works to identify strategic partners seeking financial or operating support with Canopy Growth’s group of companies. Canopy Growth owns about 25% of the equity and just under 90% of the votes due to a dual-class structure.
The Company’s debut comes ahead of the legalization of recreational cannabis in Canada, which is less than a month away. Smith Falls, Ontario-based Canopy Growth, the first marijuana unicorn with a $1 billion valuation, saw its share price surge more than 32% in the past month, while British Columbia-based Tilray, Inc. (NASDAQ:TLRY), soared to a market capitalization of about $20 billion after going public a mere two months ago.
Canopy Growth Chief Executive Officer Bruce Linton and acting CEO of Canopy Rivers said, “We’re really trying to make this smart money that goes global. The scouting has been pretty active. The company has made 11 investments in the past 12 months, including 10 in Canada and one in Italy that range from licensed marijuana producers to media platforms. There’s a “wild deal flow” of pitches to the company and Rivers evaluates all options for potential investment.”
Canopy Growth trades at a market capitalization of $15.44 billion with a price to book multiple of 11.97x. Shares of Canopy Growth surged 6.5% to close at $67.57 on Thursday.
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