Mining Companies Are Trading in Gold for Weed

For many years, Canada has been best known for its mining and oil and gas sectors, which comes as no surprise given the country’s terrain.

Canada has been able to rely on these sectors to bring in different types of investing opportunities.

However, with the demand for marijuana steadily increasing, these resource companies are looking to marijuana for new opportunities for their businesses.

There are a significant number of companies that began in the mining or oil and gas sectors and have now shifted towards Canada’s marijuana industry.

An astounding 40 companies have already shifted towards weed. About half of Canada’s marijuana firms first started in the resource sector and then converted to cannabis through reverse takeovers and spinoffs.

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A former wind power developer, Jay Wilgar, started a medical marijuana company with his friend Travis Kanellos.

Both of them wanted their startup to go public, so they were weighing their options.

One of their advisers threw out the idea that they partner with Newstrike Resources Inc.

At the time, Newstrike Resources was a Toronto-based firm that was mining gold in Ontario and Wyoming, but it wasn’t having much luck.

“I think they had given up on what they were pursuing from a mining point of view,” Wilgar said.

This is happening to a lot of resource companies in Canada. Companies like Newstrike Resources are realizing it would be more profitable to be part of the marijuana industry rather than spend a lot of money on mining and not actually earn a profit from that particular resource.

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The partnership also worked out perfectly for Wilgar and Kanellos. They wanted to partner with a company that understood capital markets — and that’s exactly what they got.

Using mining companies as a way to publicly trade makes it easier and faster to list on the public exchange. Companies don’t have to undergo a full securities commission review or file a prospectus, which is what they would have to do for a traditional initial public offering.

These kinds of partnerships are being monitored. Canadian exchanges demand that companies present a viable plan to sustain operations and also submit to a review.

The potential is obvious. Everyone wants a piece of the action, and you can’t blame them.

New opportunities and changes are presenting themselves when it comes to investing in marijuana. You don’t want to get left behind as this industry skyrockets.

Monica Savaglia

Wealth Daily

Author: Admin

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