Cannabis Clinic Network Based Company, CannVaLate Plans To Raise $65 Million In An IPO

Financially, backed by Young Rich Lister Nick Bell, a medical cannabis company CannVaLate intends to seek $65 million raising from Initial Public Offer to be launched next year

The legalization of pots on the Canadian street has led the cannabis companies to an alarming stage. As a result, marijuana stocks are rushing to get listed on Australian Securities Exchange. So far two medical cannabis stocks have been listed this year: Elixinol Global (ASX:EXL) in January and Althea (ASX:AGH) in September.

While around four stocks are standing in the cue with a placard of ‘coming soon’. Emerald Clinics, a cannabinoid medical clinic, led by the founder of AusCann Ltd (ASX:AC8), Dr Stewart Washer, is expected to begin trading on ASX by the end of March 2019. Whereas another major player is to stem from Canadian pot stock Cronos Group.Â

When it comes to Victoria based CannVaLate, listing remains due for February or March next year. CannVaLate is a cannabis clinic that has been founded by Dr. Sud Agarwal along with the two other medical professionals Darryl Davies and Asaf Katz. After getting valued at $40 million, the company has raised $4 million from individual investors that too in just 7 days. Among all Nick Bell, a lister in Australia’s Young Rich and founder of digital marketing agency WME, has invested in CannVaLate. This marks his first investment in alternative health industry, branching away from its rigorous tech investment.

CannVaLate further revealed its plans to raise approximately $4 million more through institutional investment offers, expected to be unleashed next month.

Experts talking at a cannabis conference stated that there is a huge opportunity for Australian pot stocks, but it is going to be a touch fight in the global market.

Dr. Agarwal advised that CannVaLate’s business model is different to that being explored by rivals Emerald and Cannabis Access Clinics. It is because the former supports an application for a medical cannabis product instead of just rolling out the stand-alone clinics like its competitors. It has been stated that the software backend system being offered by CannVaLate will match an application with licensed producers like Cann Group, MGC and Little Green Pharma.

The idea behind this model is to retain specialist control over the patients who would then need not to refer another general practitioner. Dr. Agarwal said that it should not cost above than a patient’s normal trip to their GP as eventually the cost burden has to be borne by the producers for gaining access to the consumers. Meanwhile, CannVaLate has been the first medicinal cannabis based company to find support from medical community; and it already has four novel drugs licensed with orphan categories.

As per the estimates of new frontier, the Australian cannabis market, aggregate of both legal and illegal, is worth within the range of $4.6 billion and $6.3 billion. Moreover, Therapeutic Goods Administration report disclosed that 1442 people have been approved to medical cannabis in Australia.

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