Cannabis has always existed in the atmosphere of the fringe. In the thirties, musicians and jazz artists sang songs. Later in the sixties, hippies and Yippies marched for legalization. It was a badge of honor to be a cannabis consumer and an outlaw.
Then, California legalized medical marijuana, followed by Washington’s and Colorado’s legalization of adult-use cannabis. Both of the progressive states launched legal, regulated markets without the intervention of Wall Street capital. The inability to legally bank these businesses at major banking institutions was a ‘no-go’ for Wall Street. It wasn’t until Canada opened its banks and stock exchanges to cannabis companies that the sector became a target for investment bankers.
Green Rush
“If you look at the evolution of why things go public, it’s usually, sometimes it’s a means to get big financing,” said Seth Yakatan of Katan Associates. “In cannabis, it was a vehicle that had a window (for financing), and that window opened really quickly, and many things ran through that window before it very abruptly closed.”
As Yakatan stated, most of the Wall Street businesses that helped create capital for cannabis companies and take them public have since moved on. Plunging stock valuations and a lack of legalization action at the Federal level in the U.S. caused many to pack their bags, take their toys, and leave. Equity analysts covering the sector have largely disappeared, and several former publicly traded companies have either gone into receivership or been acquired by other companies. All of this sounds depressing, but is it?
No Suits Required
The thing is, cannabis doesn’t need Wall Street. It will be just fine without it. Indeed, it could easily thrive on its own.
Several states have demonstrated that private cannabis companies can be successful. To …
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Author: Debra Borchardt / High Times
