7 April 2017
Interesting article from Bloomberg illustrating how financiers are getting around the confusion between Federal & State legislation in the US re banking and the cannabis sector.
“The industry has gone from a Ziploc bag with a hoodie on the corner to now where you’ve got publicly listed companies in Canada acquiring assets in the United States using European money,” said Canadian Bioceutical Chief Executive Officer Scott Boyes. London-based investors bought the majority of the company’s recent $27 million private placement of shares, he said.
IAnthus Capital Holdings Inc., the company Ford leads, listed shares on the CSE in September. It’s raised more than C$50 million ($37 million), including C$20 million from a public offering underwritten by Canaccord Genuity Group Inc., Canada’s largest nonbank brokerage. IAnthus uses the money to invest in cannabis growers and retailers in the U.S., including dispensaries in Colorado, Massachusetts, Vermont and New Mexico.
Shares of Vancouver-based iAnthus have gained 16 percent this year, and are up 86 percent since they began trading in 2016. The company has a market capitalization of C$43 million.
The legal marijuana industry in North America grew 34 percent last year to $6.7 billion, and sales topped $56 billion with the black market included, according to Arcview Market Research.
The CSE is seeing increased interest in raising capital for U.S. cannabis investments through a Canadian stock offering, said James Black, the exchange’s vice president of listings development.
“The industry has matured to a certain point down there, and our reputation has gotten to a certain point up here where it’s becoming a logical meeting place for the deal flow,” Black said Thursday.
Although Canada is beating the U.S. on the road to full legalization, states like Colorado, Oregon and Washington — where recreational use is allowed — are leading the world in development of new cannabis products, said Don Robinson, CEO of Golden Leaf Holdings Inc. The CSE-listed company focuses on edibles, concentrates and other products sold in the U.S. recreational market, with plans for international expansion.
CannaRoyalty also focuses on the U.S., said CEO Marc Lustig. That’s because states with recreational use are at the leading edge of a market that Trudeau promises to bring to Canada, he said. Companies in Canada are currently barred from opening dispensaries and instead supply buds to customers through the mail. High-margin products like edibles and extracts that can be used in a vaporizer are all banned.