Green Thumb Raises $100 Million in First US Initial Public Offering

Green Thumb Industries

Chicago-based multistate operator Green Thumb Industries (GTI) has raised $100 million via the sale of 3.1 million registered subordinate voting shares to a single institutional investor at $32.03 per share.

GTI did not disclose the name of the buyer. 

The announcement, made on Tuesday, came shortly after the U.S. Securities and Exchange Commission (SEC) declared the company’s S-1 registration statement relating to the potential sale “effective.”

Traditionally, companies will file a form S-1 form ahead of a U.S. IPO. However, because of the federal ban on marijuana, plant-touching cannabis companies based in the U.S. are unable to list on major American exchanges like the NYSE or NASDAQ.

GTI’s $100 million deal, which was self-underwritten and closed on Tuesday, is a first for a U.S. cannabis firm.

“This investment reflects the very real interest, understanding, and momentum behind the potential $100 billion U.S. cannabis opportunity that is happening now,” GTI founder and CEO Ben Kovler said in a news release.

Nevertheless, the company’s shares are still not traded on a centralized market.

American cannabis companies looking to raise capital have been forced to attract high net worth individuals, private firms, or list on the over-the-counter market, which has less stringent requirements. They can also list in Canada, where cannabis is federally legal.

Meanwhile, Canadian cannabis firms have enjoyed access to American capital markets because they do not sell products containing THC in the U.S.

“The industry needs more meaningful access to capital to unleash the true economic and social growth potential,” Kovler added via the release.

Green Thumb’s U.S. IPO is yet another signal that federal legalization could be on the horizon. Earlier this month, three top Senate democrats said they plan to pursue “comprehensive cannabis reform legislation” during the 117th session of Congress.

“The next step should be allowing U.S. cannabis companies to formally list on major U.S. exchanges just like our Canadian counterparts,” Kovler argues. “The U.S. cannabis industry creates jobs, tax revenue, and has the opportunity to address head on some of the major injustices and inequities brought on by the War on Drugs.”

GTI trades on the over-the-counter market (OTCQX:GTBIF) and the Canadian Securities Exchange (CSE:GTII). Shares of GTBIF closed at $35.75 on Tuesday, up 5.5%.

Though cannabis stocks had rallied in recent days, driven by enthusiasm from retail investors on Reddit, the sector nosedived on Thursday. GTBIF closed the day down 6.9%, to 35.80, from Wednesday’s closing price of $38.45 on Wednesday.

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