Shares of Sundial Growers (NASDAQ:SNDL) sank on their first day of trading, providing more evidence that investors’ infatuation with the cannabis sector may be wilting.
The Canadian cannabis company priced its initial public offering (IPO) at $13 per share and raised $143 million in investor capital at that price. However, Sundial’s stock closed its initial day of trading at…
$8.48, or nearly 35% below its IPO price.
Sundial CEO Torsten Kuenzlen believes that investors have grown nervous after fellow Canadian cannabis producer CannTrust (NYSE:CTST) was found to have committed regulatory violations. CannTrust subsequently fired its CEO and forced its chairman to resign and is now considering a possible sale of the company.
The scandal has weighed on the cannabis industry. Other major producers have seen their shares plunge in recent weeks. Canopy Growth, Aurora Cannabis, and Cronos Group all fell at least 4% on Thursday.
“We fully expected volatility, we continue to expect volatility,” Kuenzlen said during an interview with Bloomberg.
Yet Kuenzlen attempted to highlight some key differences that he believes separate Sundial from its competition. Among them is an experienced leadership team. Kuenzlen previously held senior management positions at beverage titan Coca-Cola and beer giant Molson Coors.
“What differentiates us is we’re very much a consumer packaged goods industry play, we have people that have decades of experience in the industry, and investors really found comfort in knowing this is a professional team,” Kuenzlen said.
Sundial Growers intends to use the proceeds from its IPO to…
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