Despite turbulent market conditions, Australian investor backed Next Green Wave (CSE:NGW) has come roaring into the Canadian Stock Exchange, with shares reaching a high of CAD85c, more than 40 percent above its CAD60c raising price.
With 5.2m shares traded during the day NGW finished trading at CAD75c, giving the cannabis company an approximate CAD$91M market capitalisation on debut.
Next Green Wave, which is one of only a few companies fully-permitted to conduct operations across the entire value chain – nursery and cultivation to manufacturing and distribution – has been well supported by some top Australian funds.
Among the key backers, BW Equities, a blue-chip Melbourne-based group has joined forces with Perth’s Trident Capital and Sydney’s Regal Funds Management to complete more than half of CAD$21 pre-IPO raise.
The Australian money appears to be following NGW Executive Chairman and Perth local, Leigh Hughes. Mr Hughes is a winner of Western Australia’s prestigious 40 under 40 business award in 2012 and is an integrated marketing communication and innovations professional.
Commenting on this influx of Australian money, Leigh Hughes said:
Australian high net worth investors and small cap funds recognise the significant upside of investing in NGW which is breaking into the very large and highly lucrative Californian market.”
“While Australian investors have seen the opportunity of Australian-based medical cannabis names, the industry is still in its infancy and there isn’t the same near-term revenue generating potential that currently exists with the US and specifically California-based emerging cannabis market,” he said.
“California, where recreational cannabis was legalised just this year, is the largest cannabis market in the world and is expected to grow to a $US5.1 billion industry by 2019 and US$6.5 billion by 2020. When you compare this to the size of the beer market in California, which was $5 billion in 2017, you begin to understand the scale of this industry and why we have positioned ourselves to become a key producer in this market,” he added.
NGW is set to take advantage of a booming market, with a unique seed-to-consumer model, holding four highly coveted Conditional Use Permits. The permits remove all typical distribution barriers, regardless of whether the distribution is business-to-business or direct business-to-consumer.
Funds raised will be used to investigate marketing opportunities for full-scale operations, as well as develop a major facility in the Californian city of Coalinga.
The company intends to develop a four-part facility covering over 15 acres of approved cannabis-zoned development land.
NGW is currently completing construction of Facility A, a 35,000 sqft facility that will be used as a premium indoor growing operation starting late-2018.
Ground is expected to be broken on its 50,000 sqft Facility B in early-2019, which is anticipated to expand nursery growing facilities and include cultivation and distribution operations.
The final sections, facilities C and D are planned to be in commercial operations by 2020.