7 Marijuana companies likely to have an IPO

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Young marijuana companies seek capital.

As competition in the marijuana market increases, some companies are seeking additional capital and planning to go public in 2019. While federal law prohibits the use of marijuana, its medical usage is allowed in more than 30 states and the District of Columbia. Last year, the U.S. marijuana market gained considerable traction, says Michael Berger, founder of Technical420, a Miami-based company that conducts research on pot stocks. “There has been a significant increase in the number of U.S. companies planning to list on the Canadian stock exchange, and we expect to see several new offerings in 2019,” he says. Here are seven marijuana companies that may have an IPO next year.

Dr. Kerklaan Therapeutics

Dr. Kerklaan Therapeutics, a California-based manufacturer of creams and sprays that target pain and inflammation, plans to file for an IPO next year, says Andrew Kerklaan, the company’s president. Since July 2018, the company’s revenues have doubled each month as the California market developed and the market for cannabidiol, or CBD, expanded, he says. The company projects revenue between $10 million and $15 million in 2019. “Our company has huge growth opportunities, but the industry is capital intense,” Kerklaan says. “To support growth in our multiple businesses, we are looking to the capital markets. There is interest from investors eyeing brands at the epicenter of the cannabis and CBD sectors.”

Raw Garden

Raw Garden is a Santa Barbara County, California-based company that was founded in 2011. It’s the leading cannabis concentrate company in the state and recently completed a private placement, Berger says. “The company is generating significant revenue and is in the middle of a major expansion,” he says. “The company has attractive growth prospects and is a low-cost producer. Raw Garden plans to go public in 2019 and is focused on one of the fastest-growing markets in the cannabis industry — cannabis oil.” The company reported $13 million in revenue in 2018 and estimates $72 million in 2019.

Cannalife Capital Corp.

Cannalife Capital Corp. plans to go public in 2019. The Vancouver, Canada-based company focuses on investing in or acquiring premium cannabis and wellness brands. In October 2018, the company says it closed on three to five portfolio investments. Cannalife represents a “differentiated opportunity and is in the early stages of a major growth cycle,” Berger says. “Over the next few years, we expect to see significant consolidation in the cannabis industry and Cannalife plans to be a beneficiary of this.”

Magical Butter

Magical Butter is a Port Richey, Florida-based company that was founded in 2012 and sells a blender, so users can create their own butters, infusions and tinctures made from marijuana. In 2017, the company generated more than $7 million in revenue, Berger says. “The company is one of the best known cannabis brands and plans to commence trading on the Canadian stock exchange in early 2019,” he says. “Magical Butter has an attractive leverage to the cannabis oil market and has strategic relationships with many major cannabis companies. We are watching how the team executes from here.”

Attis Trading Company

Attis Trading Company, a Portland, Oregon-based company, should go public in 2019, says Leslie Bocskor, president of Electrum Partners, a Las Vegas-based cannabis consulting company. Attis is a vertically-integrated owner and operator with local grow facilities and dispensary locations around Portland and western Oregon. Revenue figures were not disclosed. “They have great management who has worked hard to established a strong, regional brand with competitively priced products and a customer-centric focus,” he says. “Under the current regulatory environment, the company is staying focused on maintaining its leadership position in the Portland market, but they are well-positioned to expand their footprint in the future once they are publicly traded.”

Verano Holdings

Verano Holdings is a Chicago-based company with cultivation facilities and dispensaries in six states. In October 2018, the company received an $88 million equity investment by Toronto-based Scythian Biosciences Corp. and an additional private financing of $32 million. Founded in 2014, the company declined to provide revenue figures, since it is conducting financial audits of its recent acquisitions. Verano says its revenue rose by 157 percent from 2016 to 2017 and estimates revenue growth of 174 percent. “We are planning to go public in the first quarter of 2019 on the CSE, since it is a better way for us to grow strategically,” says George Archos, CEO and co-founder of Verano.

PharmaCielo

PharmaCielo, a Canadian company with a license to cultivate and process cannabis in Colombia, is the only fully licensed producer of medicinal cannabis oil products for the domestic and international export market, says Jeff Siegel, managing editor of Green Chip Stocks, a Baltimore-based investment research service that focuses on sustainability, cannabis and agriculture. PharmaCielo has 15 million square feet of company-owned and contracted cultivation facilities. The company also owns Colombia’s only patient and e-clinic platform with 80,000 patients registered. “Colombia is actually a market that has a lot of potential,” he says. “It’s one of the best places to grow cannabis due to its natural climactic conditions, low energy costs and industrious labor force.”

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