How do cannabis companies go public if it is illegal federally?

Many of the cannabis companies are ancillary businesses are levered to the growth of the industry. These companies do not actually touch the plant. Cannabis companies do not go public through typical methods. The companies go public through reverse mergers. A reverse merger allows a private company to become public without having to raise capital, which simplifies the process. While conventional IPOs can take months to materialize, reverse mergers can take only a few weeks to complete (in some cases, in as little as 30 days). In a reverse merger, investors of the private company acquire a majority in the shares of the public shell company, which is then merged with the purchasing entity.

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