Canopy Rivers Inc. couldn’t have asked for better conditions in which to begin trading .
The cannabis investment and operating platform is coming to market in a peak market environment, where market technicals, public portfolio investments, and investor sentiment are cresting at the same time. Under such auspices, Canopy Rivers (RIV) might just surprise a few folks with the voracity of the bid tomorrow. We explore further.
In an article disseminated last Friday, we made the case that Canopy Rivers is among the most exciting and best-structured RTOs or IPOs to list in 2018. While that would have remained true irrespective of market conditions, the bull perspective for Canopy Rivers has only been enhanced since then.
The most overt sign relates to investor sentiment, which has only picked up speed lately. Just yesterday, cannabis market proxy Horizons Marijuana Life Sciences Index ETF (TSE:HMMJ) obtained a record closing high (ex-rebalancing), and followed-up today by surging to new all-time highs. Naturally, angel investor Canopy Growth Corp.—owner of approximately 25% equity in Canopy Rivers—has also participated in the sector upswing. WEED has appreciated ↑114.24% since the $5 billion direct-equity investment into Canopy Growth announced August 15th, and ↑11.96% since we wrote our original analysis last Friday.
Obviously, Canopy Rivers is coming to market on near-peak investor sentiment, from a sector and prominent stakeholder perspective. The tide of indiscriminate and targeted inflows is still rolling in.
The impressive inaugural performance of Australis Capital Inc. (AUSA) also gives us good indication that Canopy Rivers will be exceedingly well received tomorrow. Shares of the Aurora Cannabis Inc. spin-out have traded 50 times higher than their Private Placement round, according to respected New Cannabis Venturesfounder Alan Brochstein. As of this publishing ($7.90/share), Australis Caiptal had a total fully-diluted market capitalization of approximately $1.15 billion dollars—or about forty percent greater than Canopy Rivers fully-diluted RTO implied price of $3.50, the final go-public financing round in June. A quick glance at both prospectuses quickly reveals that RIV has infinitely more balance sheet assets than AUSA at the present time. Both companies are incubator and early-stage holding/investment entities.
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