By Natalie Obiko Pearson
January 8, 2019
This article was originally published on Bloomberg. Click here to view the original article.
MJIC hires Haywood to plan reverse takeover, capital raise
Expects to list on Canada’s CSE by end of February, CEO says
MJIC Inc., a pot distributor building a “cannabis superhighway” in California, is planning a Canadian listing by the end of February.
The company, based in Commerce, near Los Angeles, plans to sell shares on the Canadian Securities Exchange via a reverse takeover, Chief Executive Officer Sturges Karban said in a phone interview. MJIC has hired Haywood Securities Inc. to identify a Canadian shell company to enable the deal.
“Our timeline to get through to that point is probably another 30 to 45 days or so,” he said. Karban declined to say how much MJIC expects to raise but said the listing would be followed by a “much broader, bigger offering.”
MJIC said its superhighway will create the infrastructure to legally transport, distribute and sell marijuana amid a thicket of regulations that hamper the industry supply chain. At present, a licensed grower can’t legally transport his crop to his own licensed extraction facility across the street without hiring a licensed distributor, according to Karban. The company is acquiring dozens of licenses, trucks and warehouses across the state to build a legal corridor for cannabis stretching from San Diego to Oakland.
MJIC is part of a rush by U.S. pot companies to tap the public markets in Canada, where marijuana is legal. The federal ban in the U.S. has made raising domestic capital tricky there because most banks and large institutional investors remain on the sidelines.
“Canada broadly is the Silicon Valley of this industry,” said Karban, a Harvard-educated former investment banker.
“There is no Sand Hill road in the U.S. to go to to pitch your company,” he said, referring to the center of venture capital business in the U.S. “Really, the place that you go now is Canada.”
Formerly Known as MJIC Inc.