Bright Green is one of the few companies to receive conditional approval from the Drug Enforcement Administration to produce federally legal cannabis.
Eva Marie Uzcategui/Bloomberg
Bright Green, the federally authorized cannabis producer, began trading Tuesday in one of the first direct listings of the year.
Stockholders of Bright Green have offered to sell up to 158.2 million shares, the prospectus said. The company itself isn’t offering stock. The Nasdaq on Monday issued an $8 reference price for the direct listing.
With 158,357,000 shares outstanding, Bright Green’s valuation is about $2.5 billion.
Shares of Bright Green (ticker: BGXX) opened at $15.99 on Tuesday. The stock recently changed hands in midday trading at $15.59, up 120% from its $8 reference price.
Direct listings, which are different from traditional initial public offerings, aim to level the playing field for investors and give companies another path to going public. In a traditional IPO, the companies raise funding by selling stock. But in a direct listing, existing shareholders sell their stock, which means the company receives no money. There is typically not a lockup period restricting stockholders from offering their shares. Underwriters in a direct listing also don’t set the price range. Instead, the exchange typically consults with a company’s financial advisors to set the price for the stock. EF Hutton is serving as the financial advisor for Bright Green.
Several companies in 2021 used a direct listing to go public, including cryptocurrency exchange Coinbase (COIN), eyewear start-up Warby Parker (WRBY) and Amplitude (AMPL), the products analytics company.
Bright Green, of Fort Lauderdale, Florida, is one of the few companies to receive conditional approval from the Drug Enforcement Administration to produce federally legal cannabis, the prospectus said. This means Bright Green is conditionally authorized to legally grow, make, and sell cannabis and cannabis-related products for research, pharmaceutical applications, and affiliated export, according to a statement.
Bright Green is building a facility in Grants, New Mexico that it hopes to make into one of the biggest federally authorized manufacturing and research complexes for plant-based therapies, including cannabis.
Bright Green hasn’t produced revenue. It is also not profitable, with losses narrowing to $2.5 million for the year ended Dec. 31, 2021. This compares with $3 million in losses for the same period in 2020.
Write to Luisa Beltran at luisa.beltran@dowjones.com
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