By Lorraine Mastersmith
The TSX Venture Exchange (“TSXV”) Capital Pool Company (“CPC”) program has been historically popular in the mining industry, but with the liberalization of medical- and recreational-use cannabis, across Canada and beyond, it is proving to offer a viable capital raising platform for cannabis companies seeking to access the public markets.
The CPC program enables experienced investors and directors to form a TSXV listed company that carries on no commercial activities and whose only asset is cash. A CPC’s sole purpose is to acquire a promising business or asset (a “Target Company”) within a 24 months period of its initial public offering. This acquisition is referred to as a “Qualifying Transaction” (“QT”). The shareholders of the Target Company typically retain their controlling ownership interest on closing of the QT, with the business of the Target Company becoming the “Resulting Issuer.”