Weed Merchants Are Taking Over an Australian Mining Company

Like many Australian mining specialists that once hoped to capitalize on demand for the country’s resources, Canberra-based Capital Mining is something of a zombie company, with a stock price worth less than a penny. An unlikely savior is in the wings: A group of U.S. and Canadian companies is preparing a reverse takeover to transform Capital Mining into a yet-to-be-named venture that will focus not on gold but on pot, specifically marijuana for medicinal use and hemp products for foods and cosmetics. The new company will “provide a full range of cannabis products,” says Michael Sautman, the head of Denver-based Nutrawerx, which will join Canada’s Broken Coast Cannabis and Cannan Growersone in the venture.

A reverse takeover of Capital Mining provides a faster and simpler way to the Australian equity market compared with a more conventional, and expensive, initial public offering.