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[dropcap class=”kp-dropcap”]C[/dropcap]annabis is transitioning from a cash-only industry, and heading straight to the stock market. A massive Washington State cannabis producer/processor, known as Northwest Cannabis Solutions, is now being traded in the Canadian stock market.

The name Northwest Cannabis Solutions may not ring a bell for some cannabis consumers, but the brands that the company sells likely will. These brands include Legends, Private Reserve, Mini Budz, Magic Kitchen Edibles, Evergreen, EZ Vape single-use vape cartridges, GoldLine concentrates, THCaps infused capsules, among others. The producing/processing giant employs 150 people throughout Washington State.

On March 14, Cannex Capital Inc., which owns Northwest Cannabis Solutions, began trading on the Canadian Securities Exchange (CSE). Cannex Capital Inc. is a cannabis investment firm based out of Vancouver, British Columbia. Northwest Cannabis Solutions, is one of Washington State’s largest producers/processors, according to Top Shelf Data.

“The main reason BrightLeaf Development Co., the holding company for all the assets of Northwest Cannabis Solutions, went public on the Canadian Securities Exchange was to access capital for future growth.” Cannex Capital CEO and Director Anthony Dutton told CULTURE. In late 2017, Cannex Capital was acquired by Arco Resources Corp., “an exploration stage company, engages in the acquisition, exploration, and development of mineral properties in Canada,” according to the company’s profile on Bloomberg’s website. Beacon Securities Limited, a research firm, led the financing for the reverse takeover and the fundraising for the listing on the CSE. Cannex Capital intended to raise C$25 million and ended up closing at C$48.2 million. Vahan Ajamian, a research analyst at Beacon Securities Limited, told CULTURE why a cannabis firm such as Cannex Capital, may choose to be listed on the CSE as opposed to a U.S. exchange.

“The main reason, BrightLeaf Development Co., the holding company for all the assets of Northwest Cannabis Solutions, went public on the Canadian Securities Exchange was to access capital for future growth.”

 

“I believe it’s because cannabis is legal in several states, but it is not federally legal currently. So it’s probably difficult, or impossible to get listed on the NASDAQ, or the [NYSE], which are federally regulated,” Ajamian explained. “In Canada, the securities regulators have adopted a disclosure-based approach, where as long as the U.S. cannabis operators disclose their risks to the investors, and that it’s not technically federally legal in the United States, and the risks that are associated with that, and how they comply with the local, legal state regimes, that they’re licensed by, these companies can list in exchanges in Canada. Toronto Stock Exchange has said ‘that’s fine, but not on my exchange’ whereas the CSE, is open to such listings. So it seems like the natural place for them to go.”

According to 502 Data, in Washington State alone, cannabis retail sales totaled $927 million in 2017. With cannabis sales nationwide expected to soar to $22.6 million in 2021, according to a report by BDS Analytics. It’s hard to imagine that U.S. exchanges won’t want in on that money sooner or later.

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