A document variety of U.S.-based marijuana corporations are turning to Canada to fund aggressive enlargement in the United States and globally.
The corporations, which face funding constraints in the United States, are being lured by Canada’s cannabis-friendly capital markets and a rising urge for food amongst worldwide buyers for American MJ belongings.
So far this yr, 17 U.S.-focused marijuana corporations began buying and selling publicly on the Canadian Securities Exchange (CSE), bringing the whole to 41; in 2016, that quantity was simply 4.
And they’re elevating piles of cash.
California-based MedMen raised 143 million Canadian dollars ($110 million) by way of a personal placement earlier this summer time and expects to boost one other CA$75 million with a newly introduced equity-financing deal.
Illinois’ Green Thumb Industries raised CA$80 million by means of a bought-deal transaction that closed in August.
Of the 75 cannabis corporations buying and selling on the CSE, 41 are U.S.-focused.
The Toronto Stock Exchange and the TSX Venture Exchange don’t permit their issuers to take part in the marijuana market in the U.S., the place cannabis stays unlawful at a federal degree.
“As companies in the United States who may be private currently look at the valuations that Canadian investors are providing to issuers operating both in and outside Canada … and the fact that you can provide liquidity for early stage investors, (going public in Canada) seems to be a very compelling proposition,” stated Richard Carleton, CEO of the Canadian Securities Exchange.
Global investor interest in Canadian-listed U.S. corporations can also be rising.
“U.S. names are more attractive than Canadian names because investors are waking up to the fact that the space is overcrowded north of the border,” stated Chris Damas, editor of Barrie, Ontario-based BCMI Cannabis Report.
A current report by GMP Securities famous that U.S. corporations are extra interesting than their Canadian counterparts, which the report’s writer sees as overvalued.
“Investor demand for U.S. cannabis assets has been growing recently, with several oversubscribed public offerings and large direct investments by private equity,” the report famous.
“The conduit through listing on the Canadian Securities Exchange has also boosted U.S. companies’ access to capital markets.”
Matt Lamers might be reached at [email protected]
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