Former U.S. Speaker of the House John Boehner is part of the next major marijuana stock IPO and it’s looking like a “No Brainer” buy on its first day of trading.
The company is called Acreage Holdings.
It was founded in 2014 and has been acquiring marijuana companies across the country and it now has operations in 13 states.
It announced John Boehner was going to join its board of advisors back in April 2018.
It raised $119 million in its last round of financing.
And it’s set to go public through a reverse merger on the Canadian Securities Exchange (CSE) where many U.S. marijuana companies go public because of efficiency, marijuana is now legal in Canada, and no company with marijuana operations in the U.S. can list on a U.S. stock exchange because marijuana is still illegal at the federal level.
All in all, Acreage holdings is a pretty big deal in the marijuana industry.
The reverse merger (which we’ll call an IPO for simplicity) is looking to raise an additional $200 million in capital and we expect it to be a smashing success too.
If you look at the fundamentals of it all, there’ plenty of reason to be a bit weary of this.
Acreage Holdings has stated it expects revenues this year to come in around $130 million.
That’s tiny compared to the valuation of between $2 and $2.5 billion Acreage Holdings will have when it first starts to trade on the public markets.
However, the company has forecast revenues to grow to $3 billion by 2020.
As a result, Acreage Holdings is by no stretch a “value” play at all, however, we do consider it a “No Brainer” buy because of history.
The “Trade of the Year” so far in 2018 has been major marijuana IPOs which have raised $100 million or more like Acreage plans to do.
They have all soared in the weeks which followed their IPO.
The first big one was The Green Organic Dutchman (TGOD/TGODF). It raised C$115 million in its IPO in May 2018 and started trading around C$3.60 a share. A month later its shares passed C$8.00 a share.
That’s more than a 100% gain in less than a month during a time when marijuana stocks were, at best, treading water.
Next was Canadian marijuana grower Green Thumb Industries (GTII/GTBIF). It came public in June when it raised C$87 million. It was C$8.00 a share on opening day in June. By the end of the month it more than doubled when it passed C$16.00.
Another big payday.
One of the biggest successes of all came when Tilray (TLRY) raised $153 million in its July 2018 IPO. Its shares opened trading at about $22 each. A month later they were $44 each. Another month after that they topped out at exactly $300 a share.
Another quick exponential payday.
Finally, there was Colorado-based CBD company Charlotte’s Web (CWEB/CWBHF). It raised C$100 million when it went public in August 2018. It closed trading on its first day at C$9.70 a share. Within two weeks its shares hit C$18.00 a share.
Yet another quick payday.
See the trend?
It’s obvious…Big marijuana company goes public, shares soar.
So, if you’re looking for a big trade, Acreage Holdings is one of the best one out there when it becomes the next high-flying marijuana IPO.
We’ll worry about the fundamentals and comparative analysis after the hype-filled first few post-IPO weeks pass, and we’ve banked another winner in what continues to be one of the most reliable and profitable trends of the year.
As it stands John Boehner's marijuana company will be “no brainer” trade in more ways than one.