CohnReznick interviews Barrington Miller for an inside look at Canada’s public markets

Due to limitations in accessing capital from U.S. banks and public markets, cannabis companies operating in the U.S. are increasingly listing on Canadian exchanges. In fact, U.S. cannabis companies raised about $2.2 billion U.S. dollars on the Canadian Securities Exchange (CSE) in 2018. To learn more about this option, Andrew Lines, MAI, and a valuation partner at CohnReznick, interviewed Barrington Miller, director of Client Listed Services at the exchange.

Drew: Why do companies list in Canada’s public markets?

Barrington: The most common reason is to access public capital, primarily for expansion purposes. Canada allows even nascent companies to apply for capital. The CSE recognizes cannabis operators as legitimate businesses and serves as a viable platform for accessing needed capital. We have a healthy ecosystem to provide capital for startups.

Drew: How are companies listing on the exchange?

Barrington: Most companies on our exchange do a reverse takeover (RTO), or reverse merger. U.S. companies usually don’t need to do an RTO, because they are somewhat mature and have an operating history. But, surprising to many, you don’t need to list on the exchange as an IPO. Most cannabis operating companies that have listed on the CSE have listed as RTOs.

Between an IPO or an RTO, opinion is divided as to which is better. [Read More @ Cohn Reznick]