Cannabis Real Estate Lender AFC Gamma Rises 21% on First Day of Trading
The world of cannabis supplies expanded with a new addition on Friday. AFC gamma (Nasdaq: AFCG), a company that specializes in real estate financing for the marijuana industry, began trading on the Nasdaq after the IPO.
It was an auspicious debut. The company’s IPO was $ 19 per share and by the close of trading on Friday the stock had risen to $ 23.
AFC Gamma had timing on its side as cautious optimism returned in marijuana stocks. Investors are delighted with the recent legalization of recreational cannabis in certain states (Virginia is the most recent example), as well as speculation that the notoriously dysfunctional New York state government will be able to pull down the recreational desk there. At the national level, several top senators said last month that they would soon push for cannabis reform at the federal level.
Tightening this up is the success of Innovative industrial real estate (NYSE: IIPR). While this isn’t directly comparable as a business to AFC Gamma – it’s a real estate investment trust (REIT) and, as such, invests directly in real estate – Innovative has it at Pot Stock because of its profitable and dividend-increasing habits – Made extremely popular by investors.
AFC Gamma (AFC stands for Advanced Flower Capital) describes itself as “the leading provider of institutional loans to high quality cannabis companies across the country in all aspects of production”. It is a very young company that started its current operations last July. When it went public, 6.25 million common shares were floated on the stock exchange. She said she would use the proceeds of the issue to withdraw debt, fund her lending, and “working capital and other general corporate purposes.”
Despite the many challenges it faces, this is an exciting time for the marijuana industry. It is a good sign that various companies in the industry are going public.
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