Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

High as a kite? Danish cannabis firm StenoCare shares surge on debut

Published 10/26/2018, 05:44 AM
Updated 10/26/2018, 05:44 AM
© Reuters. FILE PHOTO: North Grow Cannabis Expo, the first Nordic cannabis convention, takes place in Bella Center in Copenhagen

© Reuters. FILE PHOTO: North Grow Cannabis Expo, the first Nordic cannabis convention, takes place in Bella Center in Copenhagen

By Jacob Gronholt-Pedersen

COPENHAGEN (Reuters) - Danish cannabis firm StenoCare sparked a stock market stampede on Friday as investors rushed to buy into its shares on their debut, driven by enthusiasm for the therapeutic benefits of its products.

The stock nearly quadrupled in price to hit a high of 33.50 Danish crowns in early trade, valuing the company at more than 200 million crowns ($30 million). They had been priced at 8.80 crowns in their initial public offering.

Interest from investors in the stock had been overwhelming, Chief Executive Thomas Skovlund Schnegelsberg said. "From our communication with investors, we get a sense that many might have followed their heart rather than their wallet.

"We've had people contact us who themselves are users of medicinal cannabis and said they want to support the case," Schnegelsberg said.

Scientists say evidence is growing that cannabis can ease epilepsy and other conditions such as chronic pain, multiple sclerosis and chemotherapy-induced nausea, prompting renewed interest in a substance best known for its psychoactive properties.

Denmark is one of several European countries, including Germany, Britain, the Czech Republic and Italy, that have allowed prescriptions of medicinal cannabis oil. Denmark, which legalized the medicinal use of cannabis from Jan. 1, is also one of the few European nations to legalize local production.

Recreational use of cannabis is still prohibited in the country even though Copenhagen's Christiania district is famous for cannabis-selling booths which are rarely targeted by the authorities.

StenoCare plans to use money raised in the IPO to launch its own production to serve local customers and export to other European markets. It plans a first sowing of cannabis plants in the first quarter of 2019.

"Our ambition is to have our own products on the shelves next year, but the exact timing depends on approval from the Danish Medicines Agency," said Schnegelsberg.

StenoCare currently imports cannabis from Canada's CannTrust, with first deliveries to Danish pharmacies and hospitals made last month.

Cannabis is also attracting the interest of consumer product companies after Canada last week became only the second country in the world after Uruguay to fully legalize cannabis.

© Reuters. FILE PHOTO: North Grow Cannabis Expo, the first Nordic cannabis convention, takes place in Bella Center in Copenhagen

The move has prompted drinks firms such as Constellation Brands (N:STZ), Molson Coors (N:TAP) and Heineken (AS:HEIN) to look into cannabis-infused drinks.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.