IPO Watch: Another pot stock crops up on the ASX and fails to get investors high
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The second pot stock in as many weeks entered the ASX on Thursday afternoon and suffered a similar decline on debut.
Little Green Pharma (ASX:LGP) is Australia’s only cannabis company to produce locally grown and GMP-manufactured cannabis products for patients.
The company makes products into final dose form that it says have been used by more than 1,400 patients in Australia, with over 4,500 bottles of medicinal cannabis oil sold so far.
Little Green Pharma raised $10m from the issue of shares at 45c each.
Its largest shareholder is Canadian pot investment firm Elixxer, which holds a 23 per cent stake. Another notable shareholder is billionaire Alex Waislitz’s fund Tiga Trading, which has a stake of 2.5 per cent.
However it dipped as low as 32c — a nearly 30 per cent discount to its IPO price — during its first day of public life.
Little Green Pharma continues a poor run for cannabis IPOs in recent months.
The decline comes less than a week after the listing of Emerald Clinics (ASX:EMD), which fell 25 per cent on debut and now sits 45 per cent lower than its IPO price.
In a similar fashion, Emerald’s predecessor Cronos Australia (ASX:CAU) has dropped 68 per cent since its debut in November.
But it was not all bleak news for Little Green Pharma today. The company announced it had signed a purchase agreement with UK-based medical cannabis importer Astral Health.
Astral’s parent company, LYPHE Group, has a medical cannabis clinic licence and owns seven clinics across the country. It hopes to reach 2,000 patients this year alone.
Little Green Pharma managing director Fleta Solomon said this was an important milestone for the company, giving it an early mover advantage.