Dreamstime
the latest cannabis company to tap the public equities markets, surged and then dropped in its market debut.
Shares of Flora Growth (ticker: FLGC) opened at $5.50, rose to a high of $6 and then fell, closing at $4.75, off 4.2% from its offer price. The decline makes Flora Growth a so-called broken deal.
Flora Growth had been expected to go public last week but delayed the transaction. Tuesday morning, the Toronto-based company said it raised about $16.7 million after selling 3.3 million shares at $5 each, the top of the range of $4 to $5 it had told investors to expect.
Boustead Securities is the underwriter on the IPO.
Flora cultivates and processes medicinal-grade cannabis oil and other products that it supplies to distributors including pharmacies, medical clinics, and cosmetic companies. It is currently focused on selling products in the U.S. and Colombia, but plans to expand to other Latin American countries, Canada, and Europe.
Flora began producing revenue in August through its Flora Beauty and Hemp Textiles units, according to the prospectus for the deal. Net losses widened to $14.3 million in 2020, from $2.8 million in losses in 2019. Revenue was $106,000 last year.
Flora is the latest cannabis company to tap the public equity markets. Ascend Wellness, a leading cannabis operator, went public last week, with shares rising in its Canadian market debut. AFC Gamma (AFCG), a marijuana lender, gained 21% during its first day of trading in March.
Write to Luisa Beltran at luisa.beltran@dowjones.com
