A Canadian Cannabis Company Looking Beyond North America
January 13, 2020 (Investorideas.com Newswire) In the highly competitive, and newly legalized, cannabis marketplace, companies continue to search for unique ways to sell their wares. Some newer, smaller entrants into the fray try to differentiate themselves by specializing in just one product or service while others attempt to offer a little bit of everything to potential customers. Frontier Wellness Management Inc., a Canada-based corporation, is a perfect example of this new line of thinking and strategizing. The company recently announced a major effort, funded by pre-IPO investments, to enter the European market as a major player.
While the first wave of activity will focus on Spain, the company intends to branch out into all regions of Europe where cannabis products are fully or partially legal. Why would Frontier and other companies choose to stretch their corporate arms across the Atlantic? Here are a few of the reasons it makes good sense to go global with a business venture in which all your products aren't legal in every jurisdiction.
Millions of everyday stock market enthusiasts hunt for non-domestic investing opportunities like the ones that Frontier is opening up in Spain. The company will first focus on that region by buying up several existing entities that sell and distribute cannabis products and services. These fully functional, established companies offer investors a solid foundation as well as sustainable and fast growth potential.
In many ways, geographic diversification beyond the North American space is the ideal move for a company that needs to expand but faces legal challenges in certain nations. The legal environment for cannabinoids in Canada is constantly changing, moderately restrictive and not uniform across the country. In the U.S., the situation is even more confusing. The patchwork state-by-state laws can be maddening for any seller in the market. Plus, with each passing year, various U.S. states change their local laws and force companies to quickly adapt to the new scenario.
It's no wonder that corporations would turn to Europe, and Spain in particular, where there's a uniform, transparent set of laws on the books that doesn't change from week to week. Additionally, Spain's economy is strong and its entire spectrum of corporate investing opportunities is bright.
There is an entire class of well-heeled investors who are always searching for international opportunities, primarily ones that include the chance to buy into an IPO (initial public offering) or a pre-IPO investment. The chance to purchase stock before it goes up for sale on a public exchange can mean huge returns, even though the risk profile is also quite high. Compared to domestic stock purchases, these pre-IPO situations represent a golden opportunity for institutions and individuals who want to take advantage of ultra-high returns.
In the case of Frontier Wellness Management, the long-range plan is to acquire entire entities in the market. Spain is the starting point for the company because the legal landscape is not a challenge. Spain's laws allow for the sale and distribution of a wide range of cannabinoid products and services. Unlike the situations in Canada and the U.S., Spain's legal environment is wide open for companies like Frontier that want to enter the market as independent players or as parent companies to locally-owned ventures.
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