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Emblem IPO: Seizing Opportunities in Canada’s Booming Medical Marijuana Industry

August 27, 2023 11:33 am
Published by: David Richardson

Emblem Corp. cultivates, processes, and distributes cannabis and its derivatives on the Canadian market.

The cannabis producer strives to deliver high-quality products while taking an active role in educating medical marijuana patients.

So, let’s talk about why the Emblem IPO matters and how the company navigates the hot pot market.

Emblem Pre-IPO

Formerly known as Saber Capital Corp., the cannabis firm completed a qualifying transaction and secured short-form offering document financing. The qualifying transaction involved a name change to “Emblem Corp.” and the consolidation of common shares.

The TSX Venture Exchange granted conditional approval for the transaction, and trading of common shares would resume under the new ticker symbol EMC.

As part of the qualifying transaction, Emblem finished funding 1,739,130 units at C$1.15 per unit to bring in C$2 million in funds. It also concluded an offering of subscription receipts to raise $21.6 million.

Additionally, Emblem aimed to secure C$800,000 through a non-brokered placement of units. A holder could buy a common share at C$1.75 per share within 36 months of issuance.

How Much Is Emblem Pre-IPO Valuation?

Emblem’s pre-IPO valuation stands at C$63 million or C$90 million on a fully diluted basis.

The fully diluted value is all the outstanding shares plus other instruments that are convertible into shares. In Emblem’s case, these instruments include warrants, share options, management performance shares, and issuer compensation options.

The Emblem valuation was considerably lower than that of other Canadian licensed medical cannabis producers like Tilray and Canopy Growth. On the upside, it positioned Emblem as a potential growth catalyst in the industry.

Emblem IPO

Emblem made its debut on the TSX Venture Exchange in anticipation of the expanding medical marijuana market in Canada.

In August 2016, Health Canada reported around 91,000 registered medical marijuana patients in the country. This figure was a massive leap from 43,000 patients in January of the same year.

Projections hint that numbers could surge to as many as 450,000 patients by 2024.

When Is the Emblem IPO Date?

Emblem Corp. entered the stock market on December 12, 2016. This was a few weeks after the Canadian cannabis sector experienced a flurry of mergers and acquisitions.

What Is the Emblem Share Price?

After evaluating comparable targets in the cannabis industry and its cash flow, the Emblem IPO stock was set at a 12-month target price of C$3.25 per share.

Emblem Valuation

Emblem Corp. has a market cap of C$245.45 million and generates annual revenue of C$5.71 million.

Before the IPO, Emblem predicted it’d break even by the second quarter of 2018. The cannabis venture estimated EBITDA to reach C$5.3 million and C$17.8 million in 2018 and 2019.

Note: EBITDA is short for earnings before interest, taxes, depreciation, and amortisation.

Is It Worth Investing in Emblem Stock?

With a saturated cannabis market, Emblem’s move into cannabis oil extraction adds a high-value product to its offerings. The increasing demand for cannabis oils positions the firm to capitalise on evolving consumer preferences.

Emblem runs three distinct divisions that complement each other’s values. These divisions include:

  • Emblem Cannabis: The state-of-the-art facility in Ontario can generate over C$17 million annually, with plans for expansion.
  • Emblem Pharmaceuticals: Cannabinoid-based medications in pharmaceutical forms can open up new revenue streams. For instance, cannabis extracts have immense potential for pain relief and sleep aids, two of the largest pharmaceutical markets in the world.
  • GrowWise Health: This division partners with doctors and operates cannabis clinics to make medical marijuana more accessible to patients.

Emblem IPO: In Closing

The Emblem IPO marked a significant milestone in the ever-evolving marijuana sector.

As one of Canada’s licensed cannabis producers, Emblem has an attractive valuation, seasoned leadership, and a forward-thinking strategy.

The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions. We hold no stock or interests in any of the Companies discussed on this website/app.

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