Global Canabis Corporation, GCC, a Luxembourg-based company, is using cryptocurrency to raise funding for the cannabis industry.
Global Cannabis Capital is a fund that invests in cannabis companies in Latin America. It intends to raise funds by selling security tokens to private investors in order to expand.
Gaining Momentum with Crypto Tokens
To commemorate 420, cannabis users all across the world light up their joints. However, with crypto tokens, a new movement to aid future investment in the business is gaining traction.
GCC is planning to raise more capital through crypto tokens rather than the regular selling of shares. On April 18, Bloomberg reported on this.
According to sources, the corporation is planning to offer tokens on the Ethereum network. The tokens in these offers, unlike other cryptocurrencies, are backed by the issuer’s assets or equity.
This token sale might set a new standard for future cannabis businesses. This is especially true for those who live in nations where banks prohibit from financing marijuana-related firms (MRBs).
Taking the Tokenization Path
According to Chief Executive Officer Andres Israel, the tokenization path was a far more efficient choice than the usual IPO process. This will be in terms of both time and money. The cannabis sector expects to grow at an exponential rate over the next year, so timing is crucial for them.
He went on to claim that by tokenizing their assets, they will be able to reach thousands of investors in a short amount of time. Their goal has always been to provide as many investors with a vehicle that represents the cannabis sector as possible.
The tokens will also let investors to diversify their portfolios by investing in a growing variety of industry start-ups. Their token investors now have the opportunity to acquire stock in an increasing number of firms. It boosts the cannabis industry’s expansion. 100% of the revenues will invest in other cannabis firms, resulting in a rise in the portfolio’s value.
GCC proposes to issue capital stock in the form of 100,000 tokens through the offering. Over the next three years, the fund will likely sell up to 6% of its equity through this channel.
Obtaining Funding for Cannabis-related Enterprises
Thirty-four states in the United States already permit some cannabis use. Existing businesses have received funding primarily from venture capital and other sources such as affluent individuals and individual shareholders.
As banks continue to be hesitant to accept marijuana-related enterprises as customers, investors such as GCC are looking for other options. Dealing with challenges in the traditional financial system encourages this move. It also pays payments for marijuana-related activities.
From IPO to Security Token Offering
GCC had planned to do an IPO at first, but has now switched to a security token sale. The STO takes place in Luxembourg, where marijuana is legal and securities can be issued using blockchain technology.
In a presale last month, more than 100 investors agreed to purchasing part of those tokens. It valued the company at $25 million. The company poises to begin selling tokens on the Ethereum blockchain technology, according to the article. Instead of a standard IPO, this demonstrates its equity.
GCC has invested $700,000 in 28 Latin American cannabis firms. They help entrepreneurs in exchange for equity or buy stakes in promising businesses.
GCC plans to extend its portfolio to roughly 40 companies this year using the revenues from the token offering. According to Israel, they will concentrate on Switzerland, Canada, and the US states of Colorado and California. Cannabis currencies, on the other hand, have dropped by more than 10% in the last 24 hours.