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As for U.S. investors, two Canadian cannabis companies have been listed in the U.S. for a while. By a four-one margin, Canopy’s trading is Canadian-based; by a 1.50-1 margin Cronos’ trading is mostly in the U.S.

This past week Canadian-based Tilray Inc. tapped into that U.S. investor base when, after raising US$153 million in its IPO, it became the first medical marijuana company to list on Nasdaq. Trading volume has been large and prices are up. Tilray has no operations in the U.S.

Golden Leaf started life in 2013 when it went public as Longacre Resources. In late 2015 it changed its name to Golden Leaf — and switched gears, intending to operate its cannabis business “like a consumer packaging company — a large branded business with a portfolio of brands.”

Since 2016 it has raised more than $40 million and in January 2018 came to Canada and commenced “grow facility operations.” (It has a cultivation licence but not a sales licence.)

Golden Leaf is not the only U.S.-based company listed in Canada. In the spring Los Angeles-based MedMen Enterprises completed a reverse transaction with Ladera Ventures Corp., raised $143 million in a private placement (giving it an enterprise value of $2.1 billion) and started trading. All its cultivation, manufacturing and retail activities are in the U.S., though it plans to open in Canada.

In mid-2016, iAnthus Capital Management completed a reverse transaction with Genacra Holdings with the shares trading on the CSX. At the time, iAnthus said a public listing “will provide us with access to capital…. an important component of our strategy to finance the opportunity created by the U.S. cannabis industry transition to a legalized, highly-regulated industry.”

For Golden Leaf’s Simpson, while opportunities exist as a vertically integrated player, it is the smallest of the other U.S. firms listed here. And over the past six months the stock has been in a funk.

“We have just started to build the company,” he said, noting that this year, the company has hired a chief financial officer and a new head of operations. “We are now about to execute the plan. It’s like buying gold at $200 an ounce,” he said, noting that his competitors have a high valuation.

Financial Post

bcritchley@postmedia.com