Even though cannabis shares have struggled over the past few days, companies are still eager to dive into the Canadian marijuana marketplace. Recently, three U.S. cannabis companies managed to raise over USD 1 billion in stock shares this week alone before their impending listings on the TSE.
Massachusetts-based Curaleaf Inc. was the largest company, managing to sell over USD 400 million in stock during a private placement, while New York-based Acreage Holdings sold over USD 350 million and Harvest Enterprises Inc. out of Arizona managed to secure USD 200 million for themselves, according to The Globe and Mail.
Curaleaf, which already has been valued by analysts at over $4 billion, will be listing this Monday on the Canadian Securities Exchange (CSE). While it’s common for Canadian companies to list themselves on U.S. based exchanges, the opposite arrangement isn’t as uncommon as one would think. U.S. based cannabis companies have been having more luck than many of their Canadian counterparts, with many achieving profits despite marijuana being legal in a select few states.
With investors largely dumping Canadian cannabis stocks with many experts worry that the market might already be too saturated (over 132 licenses have been handed out by Health Canada), these U.S. based firms have become more desirable among Bay Street investors.
“Investors are recognizing that the U.S. market has tremendous growth potential and there’s more of an interest in the sector than there was half a year ago,” said Curaleaf CEO Joseph Lusardi. “Public perception of cannabis in the U.S. continues to get more favorable.”
As for Acreage, the company already does business in 14 states, and includes former Canadian prime minister Brian Mulroney as one of its board members, along with other U.S. political figures such as Republican Speaker for the House of Representatives John Boehner and former governor of Massachusetts Bill Weld. Harvest, the smallest of the three, operates in 10 states, with its home market in Arizona being the largest.
All three companies have said that they’re going public on the Canadian markets through reverse takeovers of public companies. The difference between being listed on the CSE versus the more mainstream TSX comes down to regulations, as the latter prevents its issuers from having any U.S. assets on their books. This has forced many companies such as Canopy Growth Corp, Aurora Cannabis Inc., etc., to take elaborate legal measures and signing agreements restricting their U.S. asset acquisitions.
While we’ve seen a variety of Canadian companies gear up for U.S. listing, these three companies show there’s tremendous demand from Canadian markets for investing in U.S. companies as well as their own domestic firms.
Curaleaf Inc. Company Profile
Led by a team of physicians, pharmacists, medical experts and industry visionaries, Curaleaf develops safe, effective, and innovative cannabis-based therapeutic products. Curaleaf combines the industry’s most medically precise and technologically advanced production techniques with decades of horticultural experience, to ensure consistently exceptional quality that patients and healthcare professionals can trust.
Based on a foundation of compassion, professionalism and respect, Curaleaf strives to empower physicians and patients by providing product expertise and guidance to help them make the right choices. Curaleaf is committed to being Florida’s leading resource in education and advancement through research and advocacy. Currently, Curaleaf manages multiple dispensaries across five states. – PR Newswire
