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1. UNDERSTANDING
WHY CANNABIS
COMPANIES GO
PUBLIC
PRODUCEDBY:PLEXUSCYBERMEDIA

2. CANNABIS
IPOs
OnJuly19,Canadianmedicalcannabis
companyTilraydebutedonthe
NASDAQ.ThismovecatapultedTilray
intothelimelight,whatwithit
becomingoneofthefew cannabis
cultivatorstostarttradingonWall
Street.Thecompany,whichtrades
underthesymbolTLRY,filedforits
initialpublicoffering(IPO)inJune.
Anotherleadingcannabiscompany,
GreenGrowthBrands,alsorecently
announcedtheirtakeoverofXanthic
BiopharmaInc.,whichislistedonthe
CSE underthesymbolXTHC.
AccordingtoareportfromFortune,as
manyas300cannabiscompaniesare
tradingpubliclyintheUnitedStates.
Thisisasignificantincreasesincethe
13cannabisIPOsreportedin
2013. What'smore?40ofthe300
companiesraised$95millionbetween
thefirstquarterof2014and2015.
Ifyou'rea“ganjapreneur”withadesire
toinvestintheflourishingmarket,it's
worthknowingwhatitmeanstogo
publicwithanIPO.
01CANNABISIPO'S:UNDERSTANDINGWHYCANNABISCOMPANIESGOPUBLIC

3. AnIPO (initialpublicoffering)isatermthat'sused whenaprivatecompany
emergesasapublicentity.WithanIPO,recreationalandmedicalcannabis
businessescanselltheircompany'sshares,enablingthegeneralpublictoacquirea
pieceofownershipinthebrand.Generally,therearetwomainreasons
why marijuana companiesgopublic:toamplifytheirbusinessand/or tograsp
investorattention.
Themajorityofpubliclytradedcompaniesinthelegalcannabissectorarepenny
stocks;tradingforunderfivedollarspershare.However,Tilraystartedtradingata
steep$17pershareandhasraisedover$153million.
ThefoundersofKayaShack,(whichwentpublicin2015andbecamethefirst
publiclytradedseed-to-salebusinessintheindustry,)saytheyfeltencouragedto
dosoasameansofenhancingtheirbusiness.Acannabisdispensaryspecializingin
affordablemedicalandrecreationalcannabisselections,thecompanystrivesto
expandonanationwidelevel.Kaya'sIPOalsopromptedinvestorinterest,withone
ofthemajorbenefitsbeingtheextracapitalthatKayaaccrued.
02CANNABIS IPO'S: UNDERSTANDING WHY CANNABIS COMPANIES GO PUBLIC
"We have set up the mechanism for pretty much anybody
to call up a broker or go online with $1,000 or $100,000,
and be a part of it," says Kaya CEO, Craig Frank.
WHY DO CANNABIS
COMPANIES GO PUBLIC?

4. CompaniesthatproceedwithcannabisIPOs
willhavetheirstocklistedonawell-
establishedstockexchange.Inmostcases,
smallercompanieslistonsmallerexchanges,
orinternationalexchanges,whereasbigger
firmstradeontheNASDAQorNYSE.
KayaShack,forexample,tradesonan
exchangecateredtowardsdevelopmental
andentrepreneurialinternationalbusinesses.
ItiscalledtheOTCQB.
“Theexchangeyouwinduponisafunctionof
yoursize,compliancelevel,stageof
revenues,”explainsFrank.“Theoreticallywe
couldmoveuptoamoreadvanced,more
prestigiousexchange,butthatwouldhappen
whenwemeetthecriteria.”
03CANNABIS IPO'S: UNDERSTANDING WHY CANNABIS COMPANIES GO PUBLIC
WHAT
HAPPENS
ONCE THE IPO
IS COMPLETE?

5. Oncecomplete,thecompanymustfile
financialstatementswiththeSecuritiesand
ExchangeCommission(SEC)onaquarterly
andannualbasis.Membersofthepubliccan
viewthesestatementsontheSEC's
ElectronicDataGathering,Analysisand
Retrieval(EDGAR)database.
Varyingtransparencyanddisclosurelevels
areassociatedwithdifferentcorporate
structures.Certaintypesofpublicmedical
andrecreationalcannabiscompaniesdon’t
needtobefullyreported,dependingonthe
degreetowhichtheyelecttobepublic.
04CANNABIS IPO'S: UNDERSTANDING WHY CANNABIS COMPANIES GO PUBLIC
HOW TO INVEST IN
PUBLICLY TRADED
CANNABIS BRANDS
Keepinmindthatthelevelofdisclosureandtransparencyforacannabis
company'sreportswilldiffer,it'sentirelydependentontheparticularcorporate
structureofthecannabiscompany.
HowmuchfinancialinformationyoucangatherfromSECreportswilldependon
theextenttowhichacompanyelectedtobepublic.Somecompaniesdon'thave
tofilereportsatall!However,ingeneral,mostpubliclytradedcannabiscompanies
willhavemoreinformationpubliclyavailablethannon-publiclytradedcompanies.