Weed Merchants Are Taking Over an Australian Mining Company

The reverse takeover provides the U.S. and Canadian companies with an entry to the Australian equity market.

Like many Australian mining specialists¬†that once hoped to capitalize on demand for the country‚Äôs resources, Canberra-based¬†Capital Miningis something of a zombie company, with a stock price worth less than a¬†penny. An unlikely savior is in the wings: A group of U.S. and Canadian companies is preparing a reverse takeover to transform Capital Mining into a yet-to-be-named venture that will focus not on gold but on pot, specifically marijuana for medicinal use and hemp products for foods and cosmetics. The new company will ‚Äúprovide a full range of cannabis products,‚Ä̬†says Michael Sautman, the head of Denver-based Nutrawerx, which will join¬†Canada‚Äôs¬†Broken Coast Cannabis and Cannan Growersone in the venture.¬†

A reverse takeover of Capital Mining provides a faster and simpler way to the Australian equity market compared with a more conventional, and expensive, initial public offering....

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URL: 
http://www.bloomberg.com/news/articles/2015-04-01/weed-merchants-are-taking-over-an-australian-mining-company