Cannabis producer Ascend Wellness jumps 22% in Canadian market debut
May 4th, 2021
Ascend Wellness Holdings (AWH) Inc surged about 22% in its Canadian stock market debut on Tuesday to fetch a market value of $1.6 billion, the latest pot producer to cash in on strong investor demand for U.S. marijuana companies.
Shares of AWH, which harvests cannabis, makes finished products and operates retail stores, closed at $9.75 on their first day of trading, compared with the initial public offering price (IPO) of $8.
Several U.S. pot firms have gone public in recent months as expectations rise that Democratic lawmakers will soon pass legislation granting the industry access to federal banking, a move that will allow more institutional investors to participate in the sector.
“I see private equity being the big player in this industry over the next few years,” AWH founder and Chief Executive Abner Kurtin said in an interview.
Two people familiar with the matter said AWH had held preliminary talks to be taken over by larger U.S. pot producer Trulieve Cannabis Corp in the months leading up to the IPO.
But the talks may have ended because AWH decided to pursue the IPO, said one of the people, who declined to be named because the talks were confidential.
Kurtin refused to comment on any ongoing discussions but said AWH remains open to merging with another U.S. multi-state operator that would be a “strategic fit,” such as Trulieve or smaller operator Terrascend Corp and privately-held Holistic Industries.
“We’re open to being sold if that is the best path forward,” he said.
Trulieve and Holistic could not be immediately reached for comment. Terrascend Chairman Jason Wild declined to comment.
AWH, which currently operates in five U.S. states, posted nearly $144 million in revenue last year and was profitable on an adjusted gross basis, a regulatory filing showed. (Reporting by Arunima Kumar in Bengaluru; Editing by Aditya Soni)
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