Business and commercial: Banks lend millions to cannabis growers

Some of Canada's largest banking institutions are cultivating cannabis clients. Some of the biggest business and commercial outlays from these banks are loans to entrepreneurs in Canada invested in the now legal cannabis market. Both the Canadian Imperial Bank of Commerce (CIBC) and the Bank of Montreal (BMO) provided $80 million loan to marijuana cultivator PharmHouse.

That is the largest debt financing loan provided to any privately owned and operated cannabis company. Until now, most banks have shied away from anything to do with the cannabis industry since most of the larger lending institutions hold U.S. assets where cannabis is still federally illegal. The Royal Bank has also got in on some of the action by beginning to advise cannabis companies on reverse takeovers and stock sales. 

Aurora Cannabis received some advice in May of last year from BMP regarding its billion-dollar all-stock merger with Medreleaf. BMO has also provided smaller companies with mergers and acquisitions advice and transactions. PharmHouse is owned in part by Canopy Rivers which recently participated in a more than $12 million analytics startup for the cannabis industry.

So, business and commercial endeavours in the cannabis market are growing. These sorts of transactions would do well with the advice of an experienced business lawyer in Canada. He or she would be able to ensure that all transactions meet the letter of the law. A lawyer's advice can be crucial in any business dealings especially when treading on new ground as in the case of the cannabis industry in Canada.

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