On the eve of marijuana’s leap into the recreational market in Canada, American companies are heading north in droves to get in on the action.
“We’re seeing money roll in, we’re seeing businesses roll in.”
This week, American pot giant MedMen Enterprises Inc. listed on the Canadian Securities Exchange with a valuation of over $2 billion.
“We most definitely will have an operational presence in Canada,” Adam Bierman, CEO of MedMen, told CFN Media Group.
“It makes sense. It’s easy to scale North America,” said Bierman.
MedMen has shops in California, Nevada and New York, and it employs more than 800 people, but the company can’t be listed on the New York Stock Exchange because federally, pot is still illegal in U.S.
Weinstein says MedMen’s listing on a Canadian stock exchange is only the beginning of a northward move by American cannabis companies who want to go public.
Despite marijuana being legal in a few U.S. states, the federal government still considers it a controlled substance the same way it does cocaine and heroin, Weinstein says.
“That is sending a lot of American business owners and entrepreneurs north of the border,” Weinstein tells Day 6 host Brent Bambury.
Canadian securities regulators do not ban stock exchanges here from listing American marijuana companies with U.S. operations.
They do, however, deem it a risk for investors to purchase shares in these companies due to pot’s standing under U.S. federal laws, Weinstein says.
The Toronto Stock Exchange (TSX), the storied blue chip exchange, made a policy decision not to list U.S. marijuana companies with operations in their country, she adds.
“The Toronto Stock Exchange said: ‘We see that as a risk to Canadian investors and we will not list companies on either of our exchanges that have U.S.-exposed cannabis business.'”
The Canadian Securities Exchange (CSE), a junior board compared to the TSX, was happy to list these companies.
“The CSE, being the new kid on the block, and capitalism being what it is, said: ‘No problem. We’re going to allow cannabis-related U.S. entities to list if they can find investors in Canada,'” Weinstein says.
“And boy have they ever.”
Credit: cbc.ca
