There is no doubt that Canada is one of the largest players in the legal marijuana industry, but recent news has shown a large amount of participation in the legal marijuana market throughout Oregon.Around two years ago, Oregon became the first state in the U.S. to open its legal weed industry to those who were not residents of the state. Quickly, investments seemed to pour in from around the world such as that of Golden Leaf Holdings.The company quickly applied for a series of licenses, using public money to help buy up local marijuana based companies. Golden has now become one of the largest players in the medicinal cannabis market throughout the U.S. and not just in Oregon.
One of the main reasons that Canadian companies have become such large players in the U.S. market is the fact that they can grow to levels that U.S. companies cannot given the legislation. In the U.S., companies are subject to the federal regulation which states that marijuana is as illegal as heroin among other drugs. In Canada, companies can become public on the nationwide stock exchange due to lax legislation on the national level. The most popular exchange in the country for these types of businesses has been the Canadian Securities Exchange or CSE. The exchange is very new and still in its infant stages, but they currently have around 60 marijuana companies listed on the market.
In the U.S., large exchanges often will not trade marijuana stocks let alone list them. This means that companies that would like to grow to the status of other large institutions, cannot have access to public money. The only way that these companies can get investments from public money is through partnerships with Canadian companies. There are two main ways that Canadian pot companies are able to form. The first way is through listing on popular exchanges such as the CSE among others. With this method, they can quickly gather a large amount of capital to help grow the business to a large company. The second way that these companies are able to grow is through acquisition. Sometimes the acquiring company can be known as a shell, which happens quite often in the market. The Canadian market is currently full of companies that are known as shells. Many of these shells are former mining companies, which have become shells only after the mining industry in the country fell by the wayside. Because these companies have all the legal standing of a large company, they can easily acquire other businesses, and then be listed on public exchanges.
The shells are then used to raise money and can continue to buy many different businesses in the pot industry due to their legal status. These shells have become a large player in the Oregon marijuana industry due to how lucrative they can be. Now, this is not necessarily a bad thing either, because it allows the investment of foreign money into an industry that would otherwise be purely domestic. In this way, it is quite beneficial to use these shell companies to come into the space as it has helped the market grow to a very high degree. Throughout the next coming years it will be very interesting to see how the foreign investments affect the various weed markets throughout the country. The hopes are high that these industries will be able to continue the high amount of growth that they have sustained in the past years. Only time will tell how the effect of foreign investments will change the marijuana industry in the U.S.
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