SLANG Worldwide Inc. (CSE:SLNG), one of the Canadian marijuana stocks, soared more than 66% in its first two trading days
SmallCapPower | January 31, 2018: SLANG Worldwide Inc. (CSE:SLNG), one of the Canadian cannabis stocks, made its stock market debut on the Canadian Securities Exchange Tuesday, surging 33% from its $1.50 per share offering price to close the day at $1.99. SLANG Worldwide shares then advanced 26% on Wednesday.
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SLANG is co-founded by Peter Miller and Billy Levy, who sold their first cannabis company Mettrum Health Corp to Canopy Growth Corporation (TSX:WEED) for $430 million in 2017. Unlike several cultivation-focused cannabis companies, SLANG operates as a consumer-packaged goods company, selling a suite of popular brands including O.penVape at more than 2600 stores across 10 states in the U.S.
Prior to the IPO, SLANG acquired Colorado-based Organa Brands and Firefly vape pens. O.penVape, the flagship product of Organa Brands, is the second largest selling legal cannabis product in the U.S., generating sales of over US$180 million since 2014.
While the acquisition of Organa Brands has given SLANG a large footprint in the U.S., the partnership with Canopy Growth Corp. through the Agripharm joint venture helps SLANG gain access to the largest distribution footprint in Canada. Agripharm Corp., a licensed cannabis producer owned 20% by SLANG and 40% by Canopy, will manufacture and distribute SLANG -branded goods in Canada and international markets including Europe, South America, Africa, and Australia.
In addition to the Agripharm JV, Canopy Growth could invest up to 15% in SLANG through a warrant that allows it to acquire 32 million shares, contingent on the U.S. legalizing cannabis at the federal level. Linked to a collaboration agreement, the warrant entails Canopy and SLANG to partner on distribution, marketing and research, which could result in significant synergies for both companies over the longer term.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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