The largest producer and processor of weed in the state of Washington will begin trading on the Canadian Securities Exchange Wednesday, in an effort to raise money from Canadian cannabis investors given that weed is still illegal on a federal level in the United States.
Cannex Capital Inc., the largest U.S. public cannabis company in terms of revenue, owns Northwest Cannabis Solutions, which recently became the biggest pot producer in Washington. In 2017, the company produced just over 8,500 kilograms of cannabis and that number is set to double in 2018.“It’s virtually impossible,” to raise money in the U.S., where marijuana remains illegal at the federal level, Leo Gontmakher, Cannex’s chief operating officer told Bloomberg News. “There’s not that many big money private investors in the states who are willing to take that risk.”
Cannex has been aggressively preparing for this listing over the last few months — the company managed to raised $48 million just recently, double what it had targeted, making it the largest public financing deal for an American cannabis company.
Cannex’s listing is part of a growing trend of American cannabis companies intent on going public in Canada, simply because of very stringent requirements and legal restrictions south of the border, especially for smaller companies, that presumably do not have the capital and resources to prepare for a grand listing on say, the Nasdaq.
The Canadian Securities Exchange is known to be more lenient, traditionally facilitating smaller companies. There are over 60 cannabis companies, many of which are in fact based in the U.S. that currently trade on CSE — they have a combined market value of just $230 million, which stands in sharp contrast to the three largest weed companies trading on the Toronto Stock Exchange, which have a combined market capitalization of close to $20 billion.
“The Canadian public markets offer access to a lot of capital, with a lot of certainty and a lot of speed, and there is this appetite among global investors to invest in a U.S. play,” MedMed CEO Adam Bierman was quoted as saying at a conference in Vancouver back in January.
credit:news.vice.com
