(Reuters) – PharmaCann, one of the 10 original cannabis licensees in New York, has confidentially filed for an initial public offering that could value it at well over $1 billion, sources familiar with the matter told Reuters.
The planned IPO would help PharmaCann raise funds before New York state begins recreational weed sales, expected sometime next year. The IPO could take place this fall, one of the sources said.
PharmaCann, which operates in five other U.S. states, is likely to seek to dual-list its shares on the Canadian Securities Exchange and for over-the-counter trading in the United States, one of the sources said.
PharmaCann has tapped Canadian investment bank Canaccord Genuity for the offering. Canaccord is expected to be the lead underwriter, while more banks are likely to be hired, the sources said. Canaccord did not offer an immediate comment.
A PharmaCann spokesperson declined to comment.
Sources declined to be identified as the information is not public.
New York in March became the 16th U.S. state to legalize the sale of recreational marijuana, kickstarting a race from companies to secure a position in a market expected to be among the world’s biggest.
Cresco Labs (OTC:CRLBF), one of the most valued U.S. weed producers with a market capitalization of $5.6 billion, took a 10.5% stake in PharmaCann for $110.4 million in June. That deal valued PharmaCann at $1.1 billion, and the IPO would likely be a higher valuation, the sources said.
PharmaCann, which currently operates four medical cannabis retail stores and a cultivation facility in New York, submitted paperwork for its IPO to U.S. and Canadian regulators during the past 30 to 45 days, two of the sources said.
PharmaCann rival AWH Holdings Inc listed in May, and the shares have climbed 38% since, giving it a market value of $1.9 billion
Despite growing state-level legalization of marijuana, it remains federally illegal and companies like PharmaCann, which grow or sell the plant, are prohibited from listing on the Nasdaq and the New York Stock Exchange.
Some 18 U.S. states have now legalized recreational use of weed, while 36 allow medical use. U.S. legal cannabis sales could reach $45 billion in 2025, according to analysts at JMP Securities.
PharmaCann has received multiple takeover offers in the last few months, including from blank-check firms, the sources added. Despite the confidential filing, PharmaCann could still decide to scrap the IPO and stay private or take a different route to go public, the sources said.
PharmaCann had agreed to be taken over by New York rival MedMen Enterprises (OTC:MMNFF) Inc in 2018 for around $700 million, but that deal fell apart the following year.
