Canadian first-publicly traded medical marijuana producer Tweed Marijuana Inc. surged after its shares started trading in the Toronto Stock Exchange.
Tweed climbed to C$2.59 as of 4.00 p.m. close in Toronto, a growth of 191 percent from its private placement issue price on March 7. The stock plunged from its opening offer of C$5.10 at the opening of the trade and was the third-actively traded share in Canada, with shares totalling 10.95 million switching owners.
Tweed, which operates out of a former chocolate plant in Smiths Falls in Ontario, disclosed on Thursday that it had acquired at least 60 new strains of medical marijuana plants and seeds from licensed cultivators. It however failed to reveal how much the deals cost.
“Being public helps, because it does give us another threshold of transparency or credibility,” Tweed Chairman Bruce Linton said by phone today. “It should assist us in capital access.”
Tweed, which has a market capitalization of C$90.8 million ($82.7 million), clinched a highly-coveted government permit to sell and plant medical marijuana. The company expects to cash in into the lucrative market, which Health Canada forecasts could hit C$1.3 billion in a decade.
Until recently, registered users could use their own home-planted marijuana before the government changed the laws to compel them to buy from licensed growers. However, users protested against the new rules, obtaining an injunction in the process.
In the United States, medical marijuana has been gaining prominence, thanks to favorable legislation by Washington and Colorado states, which also allow its sale for recreational purposes. Though the drug is considered illegal under federal law, the U.S. Justice Department is yet to issue a directive preventing the states from legalizing marijuana usage.
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