(This is an abridged version of a story that appears in the August issue of Marijuana Business Magazine.)
A growing number of cannabis businesses are turning to public markets in the United States and Canada as they hustle to raise the capital needed to compete in the green rush.
“These companies are really starting to see the public markets as a viable option for them to raise capital, and clearly over the past two and three years, we’ve seen the pace and number of firms going public really accelerate,” said Jason Paltrowitz, executive vice president of corporate services at OTC Markets Group, which manages trading platforms for more than 10,000 over-the-counter securities.
“Every year it has grown exponentially on itself, and this year will be no exception,” Paltrowitz added.
While going public offers a host of upsides, including quicker access to capital, the move is a complicated maneuver that carries risks for companies that don’t do their due diligence, according to Matt Karnes, founder of New York-based GreenWave Advisors.
“There are major costs and compliance issues to consider that could become burdensome if you’re not prepared,” said Karnes, a CPA who provides financial analysis, auditing and accounting services to U.S. marijuana firms.
As more companies consider taking the public plunge, Marijuana Business Magazine asked industry experts to offer their insights, lessons learned and top tips for making the move.
Click here to learn their thoughts on:
- The importance of getting your company’s infrastructure in order.
- Determining which exchanges are better for you – U.S. or Canadian.
- Which route your company should take – initial public offering or reverse takeover?
- The time and money you’ll invest in taking your company public.
- Changing your entrepreneurial mindset once your company goes public.