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Canada’s adult-use cannabis market is expected to be fully operational by this summer, and as a result, the year of legal marijuana in Canada has started with a series of mergers and acquisitions unlike anything the industry has seen to date among licensed cannabis producers.
Whether corporate consolidation becomes a trend in Canada or abroad remains to be seen. But as patients and consumers look to a more open market this year, the financial context of these cannabis producers will become more important, such as who is investing in Canada’s cannabis producers and whose money is supporting the rapid expansion.
Cannabis Business Times has found hundreds of millions of dollars pouring into Canadian licensed producers from anonymous sources in well-known offshore tax havens, such as the Cayman Islands, Bahamas, Belize and Barbados.
For example, Aurora Cannabis received $212.3 million from anonymous investment accounts in the Cayman Islands between August 2016 and December 2017, according to financial documents. (Below is a full list of offshore investments in Canadian cannabis producers.) Those investments in Aurora Cannabis preceded the January acquisitions of CanniMed.
In the same time frame, Hydropothecary received $18 million from Cayman Islands investments. In December 2017, the Quebec-based company announced plans to build a new $80-million greenhouse. Hydropothecary’s expansion puts the company “very firmly in the top three, possibly the top two,” CEO Sébastien St. Louis told the Ottawa Citizen. “It really puts us in the big producer category.”
Licensed producers contacted by Cannabis Business Times have not responded to requests for comment.
Tax-haven investment sources—or funding from a country that offers foreign individuals and businesses a minimal tax liability with little or no financial information shared with