A recent move by the Securities and Exchange Commission could fuel investor interest in marijuana stocks and encourage dispensaries, cultivation businesses and edibles producers to go public.
The SEC last week granted Terra Tech Corp., which trades on the over-the-counter markets, approval to use the $6.8 million it raised in 2014 to launch dispensaries under its MediFarm subsidiary in California, Nevada and New York.
It offers a glimpse into the SEC’s stance on publicly traded companies that own or operate dispensaries. Scores of public firms focused on the cannabis industry have emerged in recent years, but the majority are ancillary businesses that do not actually make or sell marijuana products.
Dispensaries, cultivation companies and edibles producers have refrained from going public, in large part because they’re unsure how the SEC would react.
The SEC’s move is an encouraging sign that the federal government isn’t trying to prevent investors and companies from entering the medical marijuana trade, and it may increase the amount of investment capital coming into the industry, Terra Tech CEO Derek Peterson said, according to the Orange County Register.
Terra Tech said it plans to raise another $13 million in 2015 to invest in the industry.
The medical marijuana industry scored a major victory earlier this month as lawmakers signed a spending bill with language prohibiting the Drug Enforcement Administration and Department of Justice from interfering with state laws governing legalized medical cannabis.