Earlier this month, represented by Pryor Cashman, Greenlane Holdings, Inc. became the first U.S.-based cannabis business to list on the Nasdaq Global Market. In its initial public offering, Greenlane sold 6 million shares at $17 each, above its projected price range of $14 to $16. The deal, which closed on April 23, has been well received by investors, with shares closing at $19.85 on April 24, or 17% above the IPO price.
In addition to supplying vaping products for the e-cigarette industry, Greenlane serves licensed cannabis cultivators in the U.S. and Canada. The company also distributes pipes, rolling papers, vaporizers and other products that can be used with cannabis, though it does not cultivate or distribute marijuana — it doesn't "touch the plant," in industry terms — which remains a controlled substance under federal law.
Speaking with Law360, Eric Hellige, co-head of Pryor Cashman's Corporate Group and a lead partner on the deal, said that since Greenlane's IPO he has received two calls from attorneys advising companies that "don't touch the plant" who expressed interest in seeking listings for their clients now that there is some precedent with Nasdaq's approval.
"A lot of people were watching this transaction. I think there will be many more Canadian companies also looking at U.S. companies [for acquisitions] without fear of delisting," Hellige said.
Jeffrey Johnson, Hellige's co-lead on the deal and head of Pryor Cashman's Cannabis practice, explained that listing on a major exchange will increase the visibility of companies like Greenlane, adding that institutional investors have expressed interest in investing in U.S. companies with ties to the cannabis industry but have had few options.
"By getting onto a large exchange, you open up to a much larger field of prospective investors," Johnson said.
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