On Tuesday Chicago-based Green Thumb Industries (CSE:GTII) began trading on the Canadian Securities Exchange. The company reverse engineered a takeover of Canada’s Bayswater Uranium Corporation, similar to the move pulled by MedMen recently in their bid to go public. Before the listing, Green Thumb also raised $67 million in private placements.
Green Thumb Industries received five licenses in Ohio on Monday, with the company slated to open dispensaries in some of the state’s most populated cities, including Cleveland and Toledo. Five is the maximum number of cannabis licenses allowed per Ohio’s regulations, and Green Thumb was among the few able to snag a spot in this competitive market. Out of 375 applicants, only 56 received licenses.
The Buckeye State is just the latest state in which Green Thumb has opened a dispensary. They already operate thirteen dispensaries in six states under their chain of RISE dispensaries and are aiming to open seven more by the end of 2018.
“The opportunity to touch the lives of more customers through expanding our brand distribution…is extremely rewarding,” Green Thumb CEO Pete Kadens said Monday. “We have the right infrastructure and people in place -- and we will work to maximize GTI’s potential for the shareholders who’ve entrusted us with their capital.”
Ohio is one of the latest states to roll out a medical marijuana program in the U.S. Sales are scheduled to start in September, and the state is reducing many recreational marijuana offenses to misdemeanors.
Currently, Green Thumb’s retail distribution does not extend into California. Where some consider California to be the largest cannabis market in the world, Green Thumb is sticking to the east coast. Aside from Nevada, the company seems to be dedicating more energy to the new medical marijuana markets in Florida, Pennsylvania, and Ohio.
“It’s where the money is,” Kadens told The Street last week. “[California] has an active gray market and a lot of licenses…Canada is where the capital is.”
Green Thumb Industries is not the first company to seek a listing on the CSE via reverse takeover. Los Angeles originals MedMen Inc. (CSE:MMEN) also went public in Canada, despite their sizeable distribution footprint in California. With federal regulations what they are in the United States, it is easier for state-side cannabis companies to find approval and funding across the northern border.
While weed has been legal in Canada in some capacity since 1999, America is taking a slower, more state-by-state approach to legalization. Right now, the cannabis market across the globe is valued at over $14 billion, but new legalization movements across the states could inflate that value to nearly $64 billion by 2024.
According to a recent report published by Financial Buzz, the cannabis industry received a record $1 billion in investments in the first month of 2018. A bulk of these investments for marijuana cultivation and retail sales are coming from Canada, but new North American policies could make it a little easier for cannabis companies to find support in America as well. And Ohio is a major player when it comes to these new policies.
Along with Green Thumb Industries, Ohio awarded a license to Nevada Medical Group, a subsidiary of Body and Mind Inc. (CSE:BAMM) (OTC:BMMJ). Nevada Medical Group will be one of only three dispensaries in Lorain County, a county with more than 300,000 people.
This exclusivity speaks volumes to the difficulties marijuana companies face when it comes to building a business in America. On the flip side, it could also be the start of a healthy foundation for these companies once the market finally opens in the United States.
Because the American market has the potential to be ten times larger than that of Canada, the head start Green Thumb Industries, Body and Mind Inc., and MedMen are taking could give them a sizeable lead in a new American cannabis market. Listing in Canada first might be the new signature move for the most successful pot stocks in America’s future.