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TWD (tsx) - Tweed Marijuana Inc
Posted: 04/03/2014 11:55 am EDT | Updated: 04/03/2014 12:59 pm EDT
Investors will be able to buy shares in Canada’s first publicly-traded medical marijuana company starting Friday.
Tweed Marijuana Inc., one of 12 producers licensed so far by Health Canada, expects its shares to begin trading on the Toronto Venture Exchange when the opening bell rings Friday. It will be listed under the stock ticker TWD.
The company has executed a reverse takeover of shell company LW Capital Pool Inc., a deal in which Tweed bought the public company in order to bypass the lengthy and complex process of undergoing an initial public offering.
About 65 per cent of the shares will be available to the public, and are expected to start trading at 85 cents, said chairman Bruce Linton.
“I can’t translate what demand will be, but if interest is an indicator, we get daily calls that come from all over North America” from people interested in investing in the market, he said.
If you look at how long it took us versus a standard mining company, I bet it took us longer and had a lot more people working on it.” he said.
Tweed, which operates out of a converted Hershey’s factory in Smiths Falls, Ont., has yet to ship any product to customers, but it started signing up patients in February. Its marijuana is expected to be ready for harvest and sale later this month.
“The ladies are doing very well,” Linton said, a reference to the fact that all marijuana plants in the company’s “mother room” are female (pollen from male plants makes the female plants less potent).
Tweed was one of the first companies to secure a licence to grow and sell dried marijuana to patients under Health Canada’s new Marihuana for Medical Purposes Regulations, which took effect April 1.
The new rules make it illegal for licensed marijuana patients to grow their own, or from small-scale growers, requiring all patients to buy from licensed manufacturers like Tweed.
But a court-granted injunction has allowed patients with a licence to grow to continue to produce their own product until a trial is heard. Health Canada announced last week that it would appeal that temporary motion.
The court ruling threw a wrench into Ottawa’s plans to convert the medical marijuana program in Canada into a highly regulated commercial industry that it estimates to be worth some $1.3 billion annually within a decade.
It expects the number of patients to grow from about 40,000 to some 400,000 during the same period.
The market’s potential for growth has raised a huge amount of interest in the sector. Everyone from currently licensed patients to junior mining companies is looking to jump on board the green rush. Health Canada has received some 600 applications from those looking for a federal license to start growing and selling the controversial medicine.
Penny stock mining and oil companies have jumped at the chance to be associated with medical marijuana, a phenomenon that has sent their share prices soaring at the mere mention of the herb.
But Tweed will be the first Canadian company with an actual business that is federally authorized to earn revenue from marijuana that is listed on a public stock exchange.
The U.S., where medical marijuana is expected to become a $10-billion industry, already has an established market for medical marijuana stocks. Share prices have been on fire this year.
If the last few months have seen a swathe of hopeful changes of direction among companies hoping to make it big in the Canadian medical marijuana sector, a large shadow loomed over every crazy share increase and baffling news release.
Tweed (TSX:V.TWD, Stock Forum), a newly formed company that will list on the TSX Friday, has received approval to build a 50,000 square foot facility in Smith Falls, Ontario, literally across the street from an RCMP office. But marijuana takes time to grow, and neither the crop nor the facility will be ready to produce medicine for Canada’s 40,000 registered patients tomorrow.
Tweed’s solution? Buy up the supply from formerly licensed growers who, under Health Canada’s new system, may otherwise need to destroy their crops and seeds once an injunction by a federal judge ends.
The company today announced it “has completed an acquisition of medical marihuana seeds and plants from certain growers licensed under the Marihuana Medical Access Regulations (MMAR) in advance of the April 1, 2014 deadline for transfers to occur.”
“The Marihuana for Medical Purposes Regulations (MMPR) allowed for the transfer of seeds and plants from growers licensed under the MMAR up until the end of March 2014 with authorization from Health Canada.”
The company says it has completed transactions with a number of growers under the old licensing rules, allowing it to acquire over 60 new strains of product.
The presumed undersupply of strains that deal with specific ailments was the core reason a Health Canada directive to formerly licensed growers to cease operations was subsequently stayed by a judge, pending trial.
“With the addition of the newly acquired strains, Tweed will have over 80 strains it can offer patients,” says the company.
“In addition to providing Tweed customers with additional variety, these purchases were undertaken to assist Tweed in ensuring that it had sufficient future inventory to meet demand, which is already showing signs of exceeding short-term production capacity. In the medium-term, Tweed believes that with those acquisitions which were completed and an acceleration of its own in-house growing capabilities, it will have sufficient supply available to meet expected demand.”
One shipment to the company has been held up by the RCMP for confirmation of shipment authorization.
The company is expected to open trading at $0.85, according to Chairman Bruce Linton in an article on the Huffington Post. 65% of the float, some 23 million shares, will be available on the market.
The much awaited TSX medical marijuana listing, Tweed (TSX:V.TWD, Stock Forum) opened with heavy buying at the opening of the market Friday, with the stock breaking out of the gate at $4.60 and quickly jumping to $4.75, on 2 million plus volume in just the first 15 minutes.
But with plenty of shares available and a wait-and-see approach from many investors, the stock soon rolled down to $2.60.
The company, which has a 150,000+ sq. ft. growing facility awaiting final approval in Smith Falls, Ontario, has plenty of money behind it and is currently buying stock from groups licensed under the old Health Canada system.
Tweed expects to sell as many as 80 strains when it begins posting out orders.
The company announced before market open that it was granting executives options at $0.89 per share.
ADDENDUM: Sorry folks, some incorrect data from several sources was showing the market cap of the company at $400m+ when this article was written this morning. A consolidation hasn't been registered across the board, which led to the incorrect totals earlier. Our data shows 35m shares outstanding, TMX site shows 7m shares, QTrade showed 170m two hours ago. Such are the vagaries of a new listing/reverse merger/consolidation landing all at once. Mea culpa.
ADDENDUM II: Correct data for Tweed still making its way around the financial system. Have seen other outlets similarly confused by errant numbers of shares out and market cap, and our broker relations staffer has been fielding calls from brokers all morning wondering why their screens are showing different data to the TSX and us. It's true that a company news release yesterday featured the correct info, but exchange data is normally the go-to for brokers, reporters and investors. General consensus: (shrug) If you liked it enough to buy at a presumed $400m market cap, you must be stoked to be on it now that the cap is 1/4 that.
Tweed (TWMJF ) on pinks on Monday:
Tweed (TWMJF ) on pinks on Monday:
Canada’s first publicly traded marijuana company has rough first day when pot shipment seized by RCMP
Tweed Marijuana Inc. became the first publicly traded medical pot company in Canada on Friday, but behind the scenes the Ontario production facility has apparently been searching for answers after a run-in with the law.
On Monday, the company was hoping to beef up its stock with a shipment of medical marijuana products that it says it acquired from B.C. growers who had previously been licensed to grow their marijuana at home.
Even though the company had received Health Canada’s approval to import such products, the Mounties, who the company said it had invited to inspect the shipment, ended up seizing it at the Kelowna International Airport.
“We felt everything was done absolutely correctly,” Tweed chairman Bruce Linton said from the company’s office in Smiths Falls. “When you call police to say, ‘Come look at this,’ you believe you have everything in order.”
The case seems to highlight an ongoing confusion around the old legal regime, which allowed licensees to grow medical pot in their basements, and the new regime, which restricts production to commercial growers, such as Tweed.
As of Friday, the company — one of 12 licensed so far in Canada — had still not received an explanation for the seizure, Linton said.
Sgt. Duncan Pound, an RCMP spokesman in B.C., refused to comment on the reasons for the seizure.
“We typically do not confirm or deny investigations unless there is an investigational or public safety need. Specific details about any investigation only become known when that investigation results in charges being laid by Crown Counsel,” he said via email.
Before the April 1 switch to the new regulatory regime, individuals who previously had personal-production licenses were allowed to sell what “starting materials” they had, such as seeds and plants, to one of the new commercial producers.
Linton said Friday his company hadn’t originally intended to purchase other medical marijuana products; the initial business plan was to grow about 25 varieties of plant at the company’s 160,000-square-foot growing facility.
But when the company started accepting customers early in February, demand for its products proved much higher than expected, Linton said.
It became clear, he said, that the amounts sought per patient were “several multiples” higher than what the company had planned for. When Tweed pointed this out to Health Canada officials, the company was told that other commercial growers were buying medical pot from growers who had been licensed under the old regime.
The only stipulation was that they needed federal authorization to do so.
Health Canada spokeswoman Sara Lauer confirmed Friday that Tweed received the go-ahead.
Linton said the company collected plants, seeds and “in-production plant materials” from multiple growers across B.C. He declined to say exactly how much product was acquired, but said it provided the firm with an additional 55 varieties of marijuana.
Linton said the company’s purchases from B.C. were a one-time thing and that all future product will be grown in Smiths Falls.
The company invited the RCMP to come inspect the shipment at the Kelowna airport Monday, the last day such transactions could take place.
“Our intent was to be transparent,” he said. Plus, having the Mounties around also provided extra security for the precious cargo.
Health Canada officials were unable to say Friday how many other commercial growers had acquired marijuana products from home growers before the deadline.
Linton speculated that the RCMP seizure may have been the result of “confusion” because of overlapping regulations.
Last month, a Federal Court judge granted an injunction for medical marijuana users who had previously held a personal-production license.
The injunction allowed those users to continue growing pot until the court issues a final decision.
On Monday, the same day the Tweed shipment was seized, the federal government announced it was appealing the court ruling.
The closing price for shares in Tweed Marijuana Inc. on Friday was $2.59 on the TSX Venture exchange, valuing the company at $90.7 million (market capitalization).
So them giving up on pot seized by the RCMP is a good thing or bad? lol
I hope y'all invested cheap and consider a modest profit and run....
There is no way this company should be valued at what it is.
I don't believe they have shipped any MJ....with around 500 in patients signed up... it is mindblowing that this company is at its current value.
You all know most become patients so they can have a valid poss licence due to MMAR changes....they aren't going to be buying their 30g/day scripts..LOL...not at Tweed prices at least....
....It seems like alot of hype unless they have a pretty heafty export contract....and I know a few LP's have those monopolized already....tho demand is there I suppose.
Interesting , they got caught shipping nearly dried MJ along with Mettrum which they intended for their customers. 1200lbs... Sure they are refusing to pay, lucky too...I would laugh if HC pulled their license for violating the rules.....This is going to be brought up in Court (Allard Case)
Here is what I have seen
Their gardeners are having issues based on what I saw (Mg deff), humidity issues(thier words), and some pretty sorry looking plants for the amount of time and effort they have put in.....
With some of the sources the LP's are getting their strains from...Hope they enjoy battling PM, and an especially nasty critter that is worse than a spidermite and resistant to the types of chemicals they are allowed to use.
Not to mention by bringing in the Chemdog line they are inviting hermi's should they stress the plants (which they are doing right now)...FYI if it gets seeded, there is no value as "milled" bud is very hard to sell....Prairie Plant Systems and HC learned that one.
With some of soon to be licensed LP's in in the final phases of getting licensed and with the quality of their gardens, and master gardeners...well sorry to say but Tweed is gonna get schooled hard if they are hoping to sell to the medical crowd.
Expect some tears in the next couple of quarters....especially if the conroy injuction becomes permanent.
Yup...I'm wrong...It is going to go to skyrocket.,....keep buying it.....even if they don't get any more customers...keep buying it....even when new LP's get licensed offering a superior product for $1.25 a gram (rough trim) and $2.50 a gram (trimmed) keep buying it....Cause med user's aren't picky at ALL.
When you go into a growroom....and the humidty starts to bead down a growers face dispite the fact it is cool(and they are running dehum, chillers, etc.).....and they admit that they are having humidity issues (sealed rooms)....good luck......
Running a ghetto grow is one thing.....A show the size of Tweed's.....that takes skill and STABLE GENETICS...you don't bring 60 new strains into your stable.....
But hey...keep buying....