Capital is flooding into the U.S. marijuana industry.
In 2019, more than $7 billion has been invested in both public and private companies. That’s nearly twice the amount at this time last year.
More impressively, U.S. cannabis companies have managed to raise this tidy sum at a significant disadvantage, with their hands essentially tied behind their backs.
Just imagine what they might do on a playing field level with other companies in, say, semiconductors or financials…
Faced with that prospect, estimates and projections like “the U.S. marijuana market could be worth $77 billion by 2022” start to look almost ridiculously conservative.
Let me show you what it’s going to take to level that unfair playing field… and how one U.S. company burned through miles of red tape to unleash its profit potential on the Nasdaq…
Uncle Sam Has His Thumb on the Scale
About that “significant disadvantage” I mentioned…
Here’s the problem: Major U.S. exchanges, like the “Big Board” New York Stock Exchange and Nasdaq, require companies that list on their exchanges to comply with the federal Sarbanes-Oxley Act.
U.S. cannabis firms – which provide goods and services legal to some degree in 41 states, four territories, and the District of Columbia – are actually violating federal laws.
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Now, legislation is weaving and wending its way through Congress, but nothing as yet comprehensively clears the way for legal cannabis sales throughout the Union, so the murky atmosphere for U.S. cannabis companies persists.
Their inability to comply with those federal laws keeps marijuana companies off the major exchanges.
So far, the big U.S. exchanges have only allowed those companies to list that limit their operations to Canada, where cannabis is 100% legal. U.S. operators’ only option has been to trade on over-the-counter markets (OTC), or list on smaller exchanges in Canada, like the Canadian Stock Exchange (CSE).
And that’s how U.S. marijuana companies are cut off from some of the largest pools of investment capital on Earth.
And they are large. I’m talking about vast pools of money, like those managed by U.S. mutual funds. These institutions oversee about $20 trillion in investments, and almost all of that $20 trillion is invested in stocks that trade on major exchanges.
One firm, however, has blazed a new path to this massive, deep source of capital – the Nasdaq, specifically.
Yes, this firm found its way onto a major U.S. exchange while still tying its fortunes – and those of its investors – to the growth of legalized cannabis markets.
And as more cannabis companies discover this sort of “loophole,” billions more in investment dollars can now find its way into the top U.S. cannabis companies…
Make No Mistake: This Is a Revolutionary Deal
Akerna Corp. (NASDAQ: KERN) has become the first U.S.-listed special purpose acquisition company (SPAC). The company is the result of a merger between MTech Acquisition Corp. and MJ Freeway LLC.
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MTech was founded specifically to invest in cannabis companies; MJ Freeway was the first of these acquisitions.
MJ Freeway is a cannabis technology company that provides seed-to-sale regulatory compliance for other cannabis companies and also provides an enterprise resource planning (ERP) platform.
Using a SPAC to fund acquisitions and then get listed on an exchange is similar to the Canadian “reverse takeover” (RTO) structure that’s become a popular path for so many U.S. cannabis companies.
An RTO is where a listed “shell” company – one dormant or defunct or that otherwise no longer operates – is taken over by a very active cannabis company.
The shell company already had a ticker that traded on a Canadian exchange; it’s just not trading at the time of the RTO.
So, by taking over that shell, the cannabis company gets a much cheaper and quicker path to public markets.
MTech accomplished essentially the same thing in the United States.
It formed a shell company, got a ticker and listing on the Nasdaq, and acquired MJ Freeway.
By doing so, institutions and more traditional investors can invest in its stock and own a piece of a company whose fortunes are tied directly to the growth of the cannabis industry.
Investors can enjoy all the liquidity the NASDAQ has to offer, too… The dam’s not quite open yet, but the Akerna deal shows – with crystal clarity – how U.S. companies can get their shares out into the richest capital markets on the planet.
An Explosion of Cannabis IPOs Is Headed Our Way
2019 is gearing up to see a record number of high-flying cannabis IPOs hit the market – each capable of unleashing millions of dollars into the market.
It’s a true investing phenomenon.
Right now, there’s a real chance to get in on a once-in-a-lifetime IPO one… two… even three times a MONTH for the next year. All you have to do is click here to learn how you can profit from the world’s most exciting investment opportunity.
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