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A brand-new Colorado cannabis company just went public.
Charlotte’s Web Holdings (CSE: CWEB) raised C$115 million from investors in a Canadian initial public offering. In the pot stock IPO, it was offered to the public at C$7 per share.
Shares in the pot stock IPO jumped 50% on their stock market debut.
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Charlotte’s Web Holdings develops and sells hemp-based CBD wellness products. The company’s products are currently distributed in 2,700 retail locations.
The company is headquartered in Colorado, with growing operations in Kentucky and Oregon. Charlotte’s Web grows hemp on 95 acres in Kentucky and 70 acres in Oregon. In total, the company has 300 acres under cultivation.
Previously known as “Stanley Brothers,” the company was founded by seven brothers from Texas.
The company gained notoriety after being featured in the CNN documentary Weed. In that documentary, Dr. Sanjay Gupta shared the company’s story.
Here’s how Charlotte’s Web describes its story in the IPO prospectus (click here to maximize your profits).
“CWB markets its products under the Charlotte’s Web brand. The inspiration for the brand began in 2012 when the Stanley brothers met five-year-old Charlotte Figi. At the time, the Stanley brothers were breeding plants that were high in CBD content and low in THC content.
Charlotte has a form of epilepsy called Dravet syndrome and she experienced severe frequent daily epileptic seizures. In a final effort to help their daughter, Charlotte’s parents approached the Stanley brothers to see if they could create a high-CBD, low-THC extract that could positively impact Charlotte.
After receiving approval from Charlotte’s doctors, Charlotte’s parents administered the extract, and within a week, Charlotte’s well-being had significantly improved.”
Following the documentary, more than 15,000 families got on a waitlist for the company’s extract.
By all measures, the IPO was a huge success. The $115 million stock offering was sizeable. After the shares were issued at $7, the stock opened for trading at $9.75 and closed Friday’s session at $10.50.
It’s the classic “pot stock” growth story – and it’s attracting tons of interest.
Last year, Charlotte’s Web sales grew 172% to reach $40 million.
Meanwhile, the company’s EBITDA grew to $14.1 million. EBITDA is a measure of a company’s cash earnings. It’s unusual for a cannabis company to operate with healthy profitability.
It follows on the IPO of Tilray (NASDAQ: TLRY), which raised $135 million from investors. Tilray shares have surged since their July IPO at $17.
Tilray stock closed last Friday at $65.20 – a 284% gain.
Unlike Tilray, Charlotte’s Web elected to go public in Canada.
Following the pot stock IPO, the stock is not currently trading here in the U.S. on the OTC or Pink Sheets. I’d expect shares to begin trading here within the next two weeks. Listing in the U.S. could spark another run-up for Charlotte’s Web.
Cannabis stocks are currently in a bull market. And investors are looking for rapid growth and exposure to the U.S. market.
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