Investor interest in the cannabis sector surged in 2017 in advance of legalization in Canada.
Similar to the blockchain sector, much of this activity is occurring in the small- to mid-cap segments of the TSX and TSX Venture Exchanges, and has been largely ignored by the Canadian banks. Medical marijuana is changing people’s quality of life and the Canadian capital markets are funding first class companies. Given GMP Securities’ traditional excellence in the small- to mid-cap space, the firm has rapidly established itself as a leader in financings in the cannabis sector.
Canadian capital markets offer issuers a virtuous circle of expertise and traditional excellence in supporting early entrepreneurs, for whom access to traditional capital via the Canadian banking monoliths is difficult to secure. Regulatory and legislative uncertainty in the U.S. is providing Canadian cannabis companies with a first-rate opportunity to cement themselves as global leaders in the space.
According to Thomson Reuters, equity issuances by Canadian cannabis companies exceeded $1 billion in 2017 alone and GMP Securities expects that momentum to continue into 2018.
Increased competition in this space will only lend further credibility to this growing sector and will help broaden distribution. GMP Securities enjoys early leader advantage in funding banking and research relationships, and has extensive expertise in connecting small- to mid-cap companies with the capital they need to prosper.
Our business mix in 2017 attests to the progress we continue to make in diversifying our business by building on the strength of our non-commodities franchise – as promised. The pace of dialogue with clients in the cannabis sector remains strong and, as we navigate 2018, our pipeline of activity is robust.