Canopy Venture Gyrates in Trading Debut as Cannabis Shares Churn

(Bloomberg) -- The venture capital arm of one of the world’s largest marijuana companies swung wildly in its trading debut as the investor frenzy over the nascent sector continued unabated.

Canopy Rivers Corp. traded around C$9 a share at 11:13 in Toronto, down about 16 percent from its C$10.75 opening price in Toronto Thursday, and giving it a market value of C$1.54 billion ($1.2 billion). The company was spun out from Canopy Growth Corp. and completed a C$104 million private placement offering in July. Its shares began trading on Canada’s TSX Venture Exchange through a reverse takeover under the symbol RIV.

Its shares rose to as much as C$11.82 a piece and fell to as low as C$7.50.

The company’s debut comes as pot valuations surge with Canada less than a month away from legalizing recreational marijuana. Smith Falls, Ontario-based Canopy, the first marijuana unicorn with a $1 billion valuation, has seen its share price balloon more than 32 percent in the last month. It was dethroned earlier this week as the largest publicly traded pot company by British Columbia-based Tilray Inc., which has soared to a market capitalization of about $20 billion after going public a mere two months ago.

Canadian Imperial Bank of Commerce led the deal with GMP Securities LP and Eight Capital, marking the first time a major Canadian bank helped a cannabis company gain a listing on a Canadian exchange.

“We’re really trying to make this smart money that goes global,” Bruce Linton, chief executive officer of Canopy Growth and acting CEO of Canopy Rivers, said in an interview. “The scouting has been pretty active.”

Canopy Rivers works to identify strategic partners seeking financial or operating support with Canopy Growth’s group of companies. Canopy owns about 25 percent of the equity and just under 90 percent of the votes due to a dual class structure.

The company has made 11 investments in the past 12 months, including 10 in Canada and one in Italy that range from licensed marijuana producers to media platforms, Linton said. There’s a “wild deal flow” of pitches to the company and Rivers evaluates all options for potential investment, Linton said.

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