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Bankers jostled to raise about $2-billion in new capital for medical marijuana companies in the first three months of 2018, boosting the profile and fees of smaller investment banks in the latest quarterly deal rankings.

Among the largest stock sales so far this year have come from cannabis growers such as ABcann Global Corp. and Canopy Growth Corp. Canaccord Genuity Corp., GMP Securities Ltd. and other independent investment banks dominate coverage of the nascent sector, both because the industry is emerging and the big Canadian banks have mostly watched from the sidelines.

In January, pot stocks were changing hands at a blistering pace amid an extraordinary rally across the space. Cannabis companies capitalized by raising money to fuel their expansion plans both in Canada and abroad. This flurry of activity – and a lack of action across the rest of the capital markets – has helped vault their underwriters at the independents above many of their peers at the Big Banks by value of deals completed, marking a rare reshuffling of the equities table.

Over all, equity financings have dropped over the same time last year, as bankers and investors digested the potential effects of interest rate hikes, recent U.S. tax changes and trade threats, and elevated stock-market volatility. Proceeds from Canadian equity issuance was down 40 per cent compared to the same time in 2017, excluding self-led deals, and the number of transactions completed also dropped, according to quarterly tallies from Thomson Reuters. Unusually, none of the banks were credited with raising more than $1-billion in the quarter.

Despite the surge in independent investment bank activity, TD Securities was the top underwriter of stock sales, followed by Canaccord and Credit Suisse. Sante Corona, head of equity capital markets at TD Securities, said new issue volumes were down significantly in the first quarter largely because of “a decline in issuance from the energy sector, which was a big part of last year’s market.” Shopify had the largest issuance of the quarter with a deal valued at $835-million.

Peter Miller, head of Canadian equity capital markets at BMO Capital Markets, blames a lack of supply for the low level of new issue activity. “Corporate Canada seems to be sitting on their hands,” he said. “Balance sheets are strong, we just don’t see corporate issuers being particularly motivated to raise equity.”

Looking forward, Mr. Miller says he has a positive outlook for corporate earnings and the global economy – as long as trade negotiations don’t derail things. He projects that the coming months will see more initial public offerings coming to market. BMO has a solid pipeline of IPOs in the works, Mr. Miller said. “Their timetables are on track. There have been no revisions to timetables because of market conditions.”

So far, the only new activity on the Toronto Stock Exchange has been wood-pellets producer Pinnacle Renewable Energy Inc., which is up 27 per cent since its launch in February. CIBC World Markets worked on that deal and head of equity capital markets Benoit Lauzé said he’s expecting more new issues to come to market soon, providing they have three key characteristics. “In spite of high levels of volatility in broader equity markets in 2018, investors continue to be receptive to new stories that offer a combination of a great market in which companies operate, a great operation focused on growth and a great management team,” he said.

Unsteady markets didn’t stop the blockbuster deal struck by Thomson Reuters Corp. to yield control of its core financial data business to private equity giant Blackstone Group LP in a US$17-billion joint-venture deal that propped up the tallies in mergers and acquisitions. TD, which worked alongside several foreign investment banks on this deal, also led the M&A rankings in the first quarter of the year, working on 10 deals. Lazard and Citigroup rounded out the top three financial M&A advisers.