Shares in a cannabis skincare company backed by David Beckham soared on their debut on the London Stock Exchange on Friday.
Cellular Goods (CBX.L) offered shares at 5p in its initial public offering but saw the price of its stock climb as high as 28.5p on its first day of trading on Friday. The stock was still changing hands at 23.90p by 10am in London. The surge valued the pre-revenue business at over £100m ($139m).
Cellular Goods is a "wellness" company that plans to make skincare and mood enhancing products from cannabinoids, natural compounds produced by the cannabis plant. The products will not contain THC, the psychoactive compound found in cannabis that makes people high. The best known cannabinoid is CBD, which has seen a boom over the last few years. Consumer goods companies have put the compound in everything from drinks to eye creams.
WATCH: CBD competition heats up
Former star footballer David Beckham is one of the biggest outside backers of Cellular Goods. Beckham owns a 5% stake in the company through his holding company DB Ventures.
"With shares 13 times over-subscribed, initial demand for cannabinoid company Cellular Goods was always likely to be high and as trading has got underway it’s become a hot stock," said Susannah Streeter, a market analyst at Hargreaves Lansdown. "David Beckham’s backing certainly added a celebrity glow to its listed debut."
Streeter said the CBD skincare market was forecast to grow to $3.5bn over the next five years but said it was already "a highly competitive field."
Cellular Goods' IPO pop comes amid a surge of interest in cannabis and cannabis-adjacent stocks listing in London. The regulatory last year cleared the way for medical cannabis companies to list in the UK and two businesses have listed shares in London so far this year. Both saw strong investor interest on debut.
Avihu Tamir, chief executive of Kanabo (KNB.L), one of the companies to list in London, told Yahoo Finance UK that London could become the centre of Europe's cannabis economy. The global legal cannabis market is worth $17.5bn (£13bn, €14bn) and forecast to grow to $65bn by 2027.