Cannasouth chief executive Mark Lucas has defended the pricing of the stock, which listed on the NZX today, saying the market would ultimately decide its value.
Shares in the research-based medical cannabis start-up, which were issued at 50c, first traded on the NZX at 51c but then swiftly fell away to 40 cents - down 20 per cent.
At 50c, some commentators have said the stock was overpriced.
Just before Cannasouth went "live" on the NZX, Lucas acknowledged that the pricing of the issue had been in the spotlight.
"Yes, there has been some controversy or commentary around the issue price," Lucas said.
"Valuations are very subjective things. If you believe in a free market, the market sets the value," he told the Herald.
"We did our best to price it where we thought it was justified and on values overseas," he said.
"There are different ways to value these companies and the market will ultimately tell us whether we have got that right or not," he said.
"It's definitely an early stage company and the regulations have not yet been set, so there is a lot of uncertainty, but there is also a lot of opportunity in this emerging sector around the world," he said.
"There are regulatory risks and there is competition that we need to be aware of, but there is also at the end of the day opportunity as well," he said.
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Looking ahead, Lucas said the company planned to cement in some of its plans once a clearer picture of the regulation emerged.
The $10 million capital raising - the first on the NZX in about two years - attracted 1400 investors.
Cannabis-related initial public offers have been popular overseas and two or three more are expected to hit the local market before the end of the year.
Cannasouth plans to use the funds raised for research and development, a new commercial processing facility, more staff and to increase its working capital.
In its offer documents, the Waikato-based company warned there could be delays in developing the new framework, or the medical conditions for which medical cannabis can be prescribed may be so narrow it will not support profitability.
Independent share research house Shareclarity said Cannasouth had generated no revenue, owns no substantive assets and has no products in market or in development.
"In summary, Cannasouth is a newly formed company that appears expensive with no certainty of becoming a going concern," Shareclarity said in a research note.
Despite a booming sharemarket over recent years, the NZX has been in a listing drought.
Lucas has said the company's drive to go down the publicly listed route was based on its desire to be well-capitalised, while also giving investors an exit path.
He, alongside co-founder Nic Foreman, has been involved in growing and researching industrial hemp since 2002 when they were granted one of New Zealand's first cultivation licences.
In February Cannasouth gained new licences from the Ministry of Health, enabling it to import, cultivate and research medicinal cannabis.
That added to its existing licence to possess controlled drugs, which allows the company to extract, process, and manufacture cannabis products for scientific research.
The Misuse of Drugs (Medicinal Cannabis) Amendment Bill passed its third reading in December last year, laying the foundations for a medical cannabis industry.
In addition to giving the terminally ill a defence against the use of illicit cannabis products, the bill requires the Government to write a regulatory framework for the medicinal cannabis industry within a year - suggesting it could take until 2020 for a clearer indication of the shape the local industry will take.