Stock IPOs are one of Wall Street’s most exciting events. When shares of a company begin trading on the stock exchange, investors get their first shot to invest in an exciting, young company. These early investments can also turn out to be very profitable. That is particularly true for the cannabis industry.
Although there is plenty of risk in cannabis stock IPOs, many have turned into profit gushers in the last few years.
One example is Cresco Labs (CL, CRLBF). Cresco is one of the largest cannabis companies in the U.S. This stock is a direct play on Illinois legalizing recreational cannabis. Since going public on the Canadian Securities Exchange in December, shares have almost doubled.
New Cannabis IPOs Hitting The Street
Two new cannabis IPOs just began trading this week. That means that investors can now buy shares in these companies and do so ahead of the curve.
One is a play on California’s high-growth cannabis market.
The second is a play on the high-growth U.S. hemp market.
IPO #1 – Harborside (HBOR)
Harborside began trading on the Canadian Securities Exchange on Monday, June 10. Harborside is a US-based cannabis company and a direct play on California’s high-growth cannabis industry.
Not only does Harborside own an impressive portfolio of cannabis dispensaries and cultivation facilities, but it owns two the largest cannabis dispensaries in California. Its first dispensary is located in Oakland and the second is located in San Jose. These two stores are seeing big-time sales and massive growth.
In March of 2019, Harborside reported:
- 1,000 – 2,000 customers per day
- 24,611 total unique customers
- $116.45 average ticket
Upon going public, Harborside combined operations with FLRish, Inc and Lineage Grow Company. This partnership added more cannabis assets to Harborside’s portfolio. That includes:
- 160,000 square foot cultivation campus in Salinas, California
- A dispensary in Portland, Oregon
- A dispensary in Eugene, Oregon
Looking forward, Harborside plans to add additional dispensaries in San Leandro and Desert Hot Springs. These new locations are expected to open in 2019.
Harborside has also entered into a purchase agreement with Walnut Oaks. Walnut Oaks operates a 44,000 square foot cultivation center in Yolo County, California. They have also signed a letter of intent to acquire Lucram Enterprises, which owns and operates a dispensary in San Jose, California.
As you can see, Harborside is very busy right now running some very successful cannabis operations while also aggressively growing its footprint in California.
Harborside just began trading on the Canadian Securities Exchange on June 10. Shares are down small since listing but it’s still very early in the game and this is a stock to keep an eye on.
*chart from Canadian Securities Exchange
IPO #2 – Jushi (JUSH)
Jushi is a multi-state U.S. cannabis and hemp company that began trading on the Canadian based NEO exchange on June 10. Jushi is another play on the high-growth U.S. cannabis industry.
The company has been busy building an impressive portfolio of cannabis and hemp assets.
Jushi’s business partner, Sound Wellness, has secured a New York State industrial hemp-CBD processing license.
Sound Wellness is now in the early stages of building a 65,000 square foot extraction, manufacturing, and distribution facility in Buffalo, New York. Sound Wellness is also establishing a cultivation center in central New York to provide genetics, drying facilities, and farm equipment to growers across the Northeast U.S.
Furthermore, Jushi has also developed branded CBD products through a line called Mend.
*Image from Jushi investor presentation
On May 23, Jushi announced the opening of its first Mend retail location to sell its portfolio of Mend CBD products. Here are some more details from the press release.
Mend is a full spectrum CBD store and is located within Dent Tower at 3980 Sheridan Drive, Amherst, NY 14226. Mend products are physician-formulated with phytocannabinoid-rich oil derived from the highest quality hemp plants and promote restful sleep and relaxation and improve general well-being. The initial Mend product line will consist of: Tinctures, Soft Gel Capsules and Topical Lotions. Later this year, Sound Wellness plans to add a unique Swiss-made, hemp-derived CBD Lozenge to the Mend line. Jushi is making big moves to capitalize on the coming hemp industry boom.
The Big Picture on Two Fresh Cannabis Stock IPOs
Cannabis stock IPOs are risky. But, many have delivered big returns in the last two years. Two new U.S. cannabis stocks just began trading on Canadian stock exchanges. One is a direct play on California’s high-growth cannabis market. The other is a play on the U.S. hemp industry. Both have plenty of long-term potential, and I will be following these two cannabis IPOs closely.
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