Several micro-cap and private companies in Canada have raised millions this week to boost their cannabis businesses as the industry scales up.
The transactions come as Canada prepares for the start in mid-October of legal adult use of recreational marijuana.
Market participants told Real Money the flurry of deals fits Canada’s tradition of financing emerging businesses through small-cap stock, reverse merger listings and private placements.
“Canada has been very familiar with higher-risk ventures in the mining or oil and gas businesses,” said an executive with a cannabis company who preferred to remain anonymous. “All of those were very speculative deals to start. It’s similar to the cannabis business, which is a hotbed now for investments as the next big industry.”
The source noted that larger Canadian cannabis stocks such as Aurora Cannabis Inc. (TSE:ACB) (ACBFF) or Canopy Growth Corp. (TSE:WEED) (CGC) started out as small-caps or micro-caps not long ago and quickly mushroomed into