Consumer cannabis company Cellular Goods PLC says IPO 13 times oversubscribed

PLC (LON:CBX), a supplier of biosynthetic cannabinoid (CBD) products, has raised £13mln as part of an initial public offer that it says was 13 times oversubscribed.

Originally only looking to raise £8mln, the consumer CBD brands business saw strong demand in its placing with City institutions and via offer for retail investors on the Primarybid platform, with the latter receiving more than 6,000 valid applications.

As a result, the company said it scaled down allocations “to accommodate as many small investors as possible in a fair manner”, with any retail subscription greater than £500 given an allocation of 2.85% of the additional amount above £500, up to a maximum total allocation of £2,500.

A total of 260mln ordinary shares, representing 51.5% of the company’s issued capital on admission, will be issued at the IPO offer price of 5p a share, meaning it will have an initial market cap of £25mln.

Trading in the shares is expected to begin on Friday 26 February on London’s standard listing segment, under the ticker symbol CBX.

Cellular Goods, where David Beckham’s DB Ventures has retained a 5% stake, said it will use the net proceeds of the IPO to further develop and launch its initial CBD product range for cosmetics and sports recovery, as well as funding the ongoing development of the business.

Chief executive Alexis Abraham, who founded the company in 2019 after previous roles in brand development and digital strategy, said: “We are delighted with the tremendous support we have received from institutional capital and the unprecedented level of interest shown by retail investors for an IPO of this size.

“We want to involve as many private investors as possible so that they can both be part of and benefit from our growth as we become the trusted brand in consumer cannabinoids. Technology now means that ‘listening at scale’ is not just a possibility but a requirement for successful consumer brands. We firmly believe that the future of the cannabinoid industry will be driven by biosynthetic production and our significantly oversubscribed IPO is a sign of investor confidence in this future.”