Canada may soon have another competitor on the cannabis market, as four separate companies recently came together and decided to join forces, and aim for an IPO at the Toronto Stock Exchange.
Aurora Cannabis and Canopy Growth may soon get another pretender on their top spots in the Canadian cannabis market.
This Tuesday, Baker Technologies Inc., a Denver based cannabis software company, decided to join forces with three other companies in order to compete for dominance north of the border.
A new challenger rises
The four company merger would be led by Baker Technologies, in order to form Tilt Holdings Inc., a provider of cannabis services, technologies and products to feed the global cannabis industry.
The other three companies included in the merger will be:
- Briteside Holdings LLC, an Oregon-based marijuana delivery company;
- Sea Hunter, a Boston-based marijuana facilities operator and finance provider;
- Sante Veritas Holdings Inc, Toronto-based ACMPR applicant
Together, these four companies plan on a fruitful IPO and a near $500 million market capitalization, which would put them near the market cap of CanniMed at the time of Aurora’s acquisition.
Take a look at the performance chart below in regards to the market capitalization as of Dec. 29.2017. :
|Canopy Growth Corp.||~$6.2-billion|
|Aurora Cannabis Inc.||~$5.4-billion|
|Cronos Group Inc.||~$1.5-billion|
|CannTrust Holdings Inc.||~$900-million|
As you can see, in case that the IPO rolls out as expected, Tilt Holdings would be in the upper echelon among Canadian companies when it comes to market capitalization.
Tilt Holdings is projecting around $70 million in sales by the end of this year, and that number could go up to $200 million in 2020.
“Right now, there’s a massive opportunity — where the Canadian public markets have really high multiples of revenue (for cannabis firms),” said Joel Milton, Baker’s CEO, “but structure is lacking.”
Even though Baker has raised $11.5 millions of dollars up to date, raising money for a company that is in the federally illegal space has proven to be extremely hard, thus the move towards the Canadian market.
That money helped Baker acquire its largest CRM competitor, Grassworks Media, in late 2017, and potential future funding raised through an IPO in Toronto would allow for extra capital to flow toward acquisitions of other technology firms.
Once Tilt Holdings is established and works out the kinks and legal things, they will maintain offices in Boston, Denver, and Toronto while ditching the location in Oregon.