Home » General World News » Cannabis companies are using a ‘backdoor’ strategy to tap the public markets — and it’s fueling an M&A boom

Cannabis companies are using a ‘backdoor’ strategy to tap the public markets — and it’s fueling an M&A boom





Adam Bierman/ MedMen

  • Many US-based cannabis companies are going public on the Canadian Securities Exchange in a nontraditional way — a so-called reverse takeover.
  • Reverse takeovers are when a private company buys a shell company that’s already publicly-traded.
  • It’s a strategy to become a public company quickly, particularly in an industry that’s federally illegal in the US.
  • Going public means these companies can roll up competitors using their stock as the cannabis industry enters a wave of consolidation. But there are drawbacks to the strategy, according to lawyers.

The legal cannabis industry is booming, and US-based startups are looking towards their northern neighbor read more >>>

Source:: BusinessInsider.Com

Comments are closed.