Slang Worldwide Inc. listed on the Canadian Securities Exchange Tuesday and investors valued the Canopy Growth Corp. (WEED.T)-backed cannabis branding and distribution business at C$645 million ($480 million). Slang listed at C$1.50 and closed up 33% at C$1.99 Tuesday, according to CSE data. According to the company's listing documents, it logged net losses of C$23.6 million on pro forma consolidated revenue of C$20.9 million for the nine months that ended Sept. 30. Slang raised C$66 million in September and said in the documents it plans to use the funds to expand the company's operations into Europe and Latin America. Canopy is backing the company through a complex financial arrangement that it uses to comply with the Toronto Stock Exchange policy of delisting pot business that operate in territories where cannabis is federally illegal, as it is in the U.S. Canopy has acquired warrants that allow it to acquire about 20% of Slang if the U.S. legalizes cannabis federally. It also works with Canopy through Agripharm Corp., a Canadian licensed producer that is 40% owned by one of Canopy's subsidiaries. Slang owns 20% of Agripharm. Several licensed producers in Canada, such as Aurora Cannabis Inc. , have similar agreements through warrants to acquire significant stakes in pot companies operating in the U.S., should marijuana's legal status change federally. Slang's co-founders Peter Miller and Billy Levy sold their first weed company, Mettrum Health Corp., to Canopy for C$430 million in 2017. Mettrum was one of the so-called blessed eight, a group of Canadian cannabis companies that received the first approvals to move marijuana genetics from the black market into the legal regime. Aside from one independent company and Tilray Inc. , the remaining members of the blessed eight have been acquired by the likes of Canopy and Aurora. The ETFMG Alternative Harvest ETF (MJ), which tracks a basket of pot stocks, fell 1.7% Tuesday.
-Max A. Cherney; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
January 29, 2019 18:07 ET (23:07 GMT)
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