Article by Elliot Ferguson, Kingston Whig-Standard
A Napanee company taking a high-tech approach to producing medical cannabis is going public in an effort to finance its rapid expansion.
ABcann Medicinals Inc., which opened in 2014 and began selling cannabis to customers across Canada last year, is expected to complete the process of becoming a publicly traded company by mid-March.
It’s now one of the 34 companies licensed to grow medicinal marijuana in Canada.
The company is working through a process called a reverse takeover, where it amalgamates with an existing publicly traded shell company that is not operating. ABcann transfers its operations to that company and assumes its public status.
It’s a quicker, less-expensive route to becoming a public company.
“You only go public for two reasons,” explained John Molloy, the company’s executive chairman and director of the Southeastern Ontario Angel Network, which connects investors to local companies. “One is you want some liquidity for your investors.
“We’ve been a company for three years and some shareholders probably want some liquidity at some point in time. Being on the public market allows them to trade their shares and make a return. The bigger reason is access to capital.”
As a private company, ABcann would struggle to raise the amount of money needed to fund its expansion, and a bank loan is unlikely.