Colorado has just passed a House Bill 18-1011 which will allow publicly trade companies in the U.S. to invest and hold medicinal or recreational cannabis cultivation, processing, and distribution licenses under their state law. The bill is expected to come into effect next year.
Though the bill is still awaiting the Governor of Colorado John Hickenlooper’s approval, this is a giant step for developing businesses in the sector. The new bill will clear the path for public companies to fund start-ups and established businesses. Canada’s cannabis industry is a clear representation of what is undoubtably going to take place in the United States over the next 5 years. Companies like Canopy Growth Corp. (TSX: WEED) and Aurora Cannabis (TSX: ACB) have developed evaluations of billions of dollars.
However, there are certain protections to be put in place to protect Colorado’s businesses. Investment capital from public companies must recieve permission from Colorado’s state licensing authority which would require a disclosure of officers, directors, and affiliates who have more than a 5% ownership interest into that company. Other protections in place are that at least one office of that company must have been a resident in Colorado for a year and the company must disclose any filing of the company within five days of release. House Bill 18-1011 is expected to be approved sometime this summer.
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