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U.S. cannabis retailer Curaleaf Holdings Inc opened lower in its trading debut in Toronto on Monday after amassing $400 million in the biggest equity raising in Canada’s marijuana industry.

Curaleaf opened at $8.70 on the Canadian Securities Exchange (CSE), lower than the offer price of $11.45.

It recovered to trade 18.4 per cent higher at 10:26 a.m. ET but remained below the issue price at $10.30. That compared with a 3.8-per-cent fall in the Horizons Marijuana Life Sciences Index ETF.

Curaleaf’s raising was almost triple its intended $150 million offering, giving it a market value of about $4 billion in the biggest-ever reverse takeover on the CSE.

Reverse takeovers allow companies to go public by rolling into listed shell corporations.

The lower trading price “is not unusual when a company increases the size of the raise,” said Russell Stanley, managing director for equity research at Beacon Securities. “We’ve also seen a rough couple of weeks for the cannabis space as a whole.”

The marijuana industry saw a flurry of capital raisings and acquisitions, as well as strong share price rallies before Canada’s legalization of recreational cannabis on Oct. 17.

Since then, cannabis shares have retreated on profit-taking and concerns about valuations.

Even so, Curaleaf’s raising attracted more than 100 institutional investors, according to the company.

Those institutions, from the United States, Canada and Europe, accounted for 90 per cent of demand, Boris Jordan, executive chairman of the Wakefield, Massachusetts-based company, told Reuters.

“We were quite surprised by the demand,” Jordan said. “Being one of the larger players in the U.S., there was a lot of attraction in investing in a company that has a multi-state footprint.”

Curaleaf owns 28 dispensaries, 12 cultivation and 9 processing sites in 12 U.S. states.

It plans to grow to 41 stores by year end, and to over 69 by the end of 2020, with cultivation also expanding, Jordan said.

With the company focused on the United States, it will likely open stores in Ohio and Illinois next, Jordan said.

The United States is the world’s largest cannabis market, accounting for almost 90 per cent of the $9.5 billion in global sales in 2017, despite a federal ban, according to research firms Arcview Group and BDS Analytics.

“If we can build the biggest company in the U.S. we’ll have the wherewithal, when we get to maximum penetration here, (to) start looking at other markets,” Jordan said.

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