August 2018

to prepare, said Danny Brody, vice president of investor relations at The Green Organic Dutchman, an Ontario, Canada, marijuana grower that trades on the TSX Venture Exchange. “Transitioning from a private to public company involves an incredible shift in levels of disclosure, responsibil- ity and transparency, and a company only has one chance to go public, so it must be done correctly,” said Brody, whose company raised $99.3 million (CA$132.2 million) with its early May initial public offering (IPO) – a record in the cannabis industry. He said executives mulling an IPO should consider: • Does your company have a rational corporate structure similar to that of peer group companies? You may not want a complicated structure such as multiple share classes, super voting rights or other things that can alienate investors. • Does your company meet the exchange requirements for mini- mum shareholders? Remember, the only time you get to choose your shareholders is when you are private. Consider the type of shareholders, whether institutional, retail or distribution. Next, work backward to accomplish these goals before going public. • Have you positioned your company to be exclusive or inclusive? Were retail investors allowed to partici- pate? Did you market to institu- tions privately? Entrepreneurs need to work hard on their private fund- ing efforts; by doing so, they will find support in their public listing. • Have you spent the time to acquire talented senior executives, direc- tors and compliance personnel to meet the rigorous demands of the public market and a fast-growing company? Matt Karnes is founder and adviser of GreenWave Advisors in New York. Photo courtesy of GreenWave Advisors