With federal cannabis legalization slated to take effect in Canada this summer, Canadian cannabis businesses are moving aggressively to go public. Becoming a publicly traded company is a major step toward ensuring the long-term viability of a cannabis business. And that means that the ongoing federal prohibition on cannabis in the US is holding back companies from growing and attracting new investors.
But one California-based company isn’t waiting around for the U.S. government to legalize marijuana. Instead, they went public in Canada using a move called a “reverse takeover.” And they did it with a valuation of over $1 billion.
MedMen Goes Public In Canada With Billion Dollar Valuation
MedMen Enterprises is a cannabis retailer based in California with storefronts in states across the US. Today, the company finalized its reverse takeover of Ladera Ventures Corp. and will begin listing on the Canadian Securities Exchange (CSE) under the ticker symbol MMEN.
With today’s move, MedMen hasn’t just become one of the first U.S. marijuana companies to trade publicly on the CSE. It is also on pace for becoming one of the largest publicly-traded cannabis companies around the globe.
Listing on the CSE gives MedMen access to investors internationally, giving them a major advantage over most firms in the US. Because marijuana is still illegal federally, US cannabis companies can’t list on the Nasdaq or NYSE.
MedMen skirted the US ban by executing a reverse takeover (RTO) of the Canadian firm Ladera Ventures Corp. A reverse takeover is a way for a private company to go public without paying the heavy fees associated with an initial public offering IPO.
First, the private company buys a controlling number of shares in the publicly-traded company. Then, it uses its private shares to exchange for shares in the public company. Ultimately, this effectively gives the private company the ability to trade on public exchanges.
Can U.S. Investors Acquire Shares In MedMen?
MedMen has a pre-money valuation of $1.65 billion dollars, according to reports. Immediately, that makes it one of ten largest cannabis companies in Canada and the most valuable in the U.S. by market capitalization.
Other companies with higher than $1 billion valuations are licensed medical cannabis producers in Canada. These include Canopy Growth Corp., which recently listed on the TSX and NYSE.
But can US investors get in on the action in Canada’s legal cannabis market? With its listing on the CSE, investors in the United States can acquire shares in MedMen.
For the most part, stock brokers in the US do not trade in international stocks. But Canadian stocks are increasingly an exception to the rule. Furthermore, some Canadian brokers do accept US clients. Expect higher costs and commissions, but it is possible.
High-End Retail Cannabis Business Goes Public
MedMen has 12 retail storefronts across the United States that are renowned for their upscale, ultra-modern interiors. The company’s flagship store, on New York City‘s iconic Fifth Avenue, is 2,000 sq. ft. and fits in perfectly with other high-end retail outlets there. On the west coast, MedMen’s bright, luxurious storefront resides on Santa Monica Boulevard in West Hollywood.
Additionally, the company runs a 45,000 sq. ft. cultivation center in Nevada and is currently building a second in California. With diversified operations and an eye toward expansion, MedMen’s going public is certainly attracting investors.
“We’re really excited about the new markets that we’ve announced we’re entering into,” MedMen CEO and co-founder told CFN. “And we have more announcements to come.”