Chicago marijuana company Cresco set to go public in Canada

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Medical marijuana company Cresco Labs is moving forward with a plan to go public in Canada, a step that will give it access to additional funds to grow its business in Illinois and nationwide.

Cresco announced Wednesday that it entered into a reverse takeover agreement with Randsburg International Gold Corp. that will result in a merger with the company. In reverse takeovers, private companies go public by buying enough shares in a public company to control it. The shareholders exchange their holdings for shares in the public company. The deal with Randsburg, a Vancouver-based metals and mining company, is subject to regulatory and shareholder approvals and other conditions. It is expected to be completed before the end of the year. Chicago-based Cresco will become the second Illinois-based cannabis company to go public on the Canadian Securities Exchange through a reverse takeover of a shell company.

CEO and co-founder Charlie Bachtell said the access to additional funds will help fuel the company’s growth. Just last week, Cresco announced that it raised $100 million in private funding. “(We can) continue doing what we’re doing, continue to normalize and professionalize the cannabis industry on a national scale,” Bachtell said.

Cresco operates three cultivation centers in Illinois, and just finished an expansion of its Joliet facility that more than doubles the amount of cannabis it can grow and process. Cresco has additional acreage available for expansion.

Cresco also has licenses to operate in Pennsylvania and Ohio and has acquired dispensary and cultivation operations in Arizona, Nevada and California. Cresco plans to raise additional funding as it prepares to go public, Bachtell said.

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After years of regulatory roadblocks and lower-than-expected demand in Illinois’ medical cannabis pilot program, growers around the state are expanding to accommodate an expected increase in customers. A state report out earlier this month found that use of medical pot has risen 83 percent this year in Illinois, which has more than 46,000 qualified patients. Additionally, Gov. Bruce Rauner signed a bill into law in late August that allows people prescribed opioids to use medical marijuana.

Fellow Chicago-based cannabis company Green Thumb Industries, or GTI, made a similar move earlier this year, when it completed a reverse takeover of a shell company and its stock began trading publicly on the Canadian Securities Exchange.

GTI raised $67 million through its listing on a Canadian stock exchange in June. The company raised an additional $61.6 million in a financing deal, and it is working to expand its operations in Illinois. The company’s public debut helped cement investors’ interest in the industry, and pave the way for additional cannabis companies.

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