The Biggest Marijuana IPO in History Continues to Grow
It seems we can put to bed the fear that was plaguing the marijuana market following the massive drops in a lot of companies over the past few weeks. MedReleaf Corp (TSE:LEAF) was valued at $636.0 million when it went public on May 30, making the company the largest marijuana IPO ever to hit North America, and it hasn’t slowed since.
It is especially good news that LEAF stock is performing well so far, considering the downturn that many marijuana stocks have recently faced, and considering the common belief that the marijuana bubble may have finally popped.
Since its IPO, MedReleaf has gained 25% in its share price, representing a massive surge in a short period of time. While many marijuana plays are looking to be more long-haul buys (something I’ve advocated for a while now), LEAF stock may be a short-term play or, at least, more open to short-term buy and sell action.
MedReleaf is a licensed Canadian medical marijuana producer and was able to parlay that into a strong valuation followed by an even stronger performance in its first few days on the market.
Its market cap is also second in all of Canada, at over $800.0 million, trailing juggernaut Canopy Growth Corp (TSE:WEED, CVE:CGC) and its current $1.0-billion-plus market cap.
But there’s more to MedReleaf than just another stock to watch. The company’s good fortune in its short stint on the market so far means that, despite the risk in the marijuana market, there is still a solid block of investors willing to bet on the drug.
So, with LEAF stock, it’s important to look beyond the largest marijuana IPO in North America and instead examine what this means for the industry as a whole.
The Future of the Marijuana Industry
There’s no use repeating the huge sales numbers that many are projecting for marijuana. We all know about the billions of dollars in sales projected, the strong growth numbers, and the stock rush that will take place as more jurisdictions legalize the drug for both medicinal and recreational usage.
But, for all the marijuana backers, there are marijuana doubters. That’s why the largest marijuana IPO in history is important.
While relying on projections means playing the long game—as hype and enthusiasm will lead to a repeated boom and bust cycle in the market until laws are passed and we see solid numbers—MedReleaf going public was a good reminder of the potential moves you can make on the marijuana stock market.
I recently advocated (and still do) playing the long game in marijuana and accepting the risk inherent in the industry. But LEAF stock proves that there are also other moves to be made on the market.
The huge surge that the company experienced in such a short time proves that there are indeed ways to make a quicker buck off of weed.
Taking advantage of the mini boom-bust cycles that will keep occurring until the hype machine slows down can also be a good way to make money off of the market, except it requires far more diligence on the investor’s end, and means that taking on more risk.