Derek Peterson was frustrated.
In March, the chief executive of Irvine-based Terra Tech Corp. (OTC: TRTC), a vendor of marijuana products, engineered a reverse merger to reduce the company’s shares from about a billion to 75 million or so.
Since then, Peterson’s watched the share price fall more than half to about $1.81 and a $141 million market cap, as of press time.
“Most hedge funds, small caps, institutional funds want to buy our shares, but they cannot because we’re breaching federal law,” said Peterson, a former senior vice president at Morgan Stanley Smith Barney.
Then he saw Canadian companies raise billions; Canopy Growth Corp., Canada’s largest medical marijuana producer, won a $4 billion investment from Constellation Brands Inc. this month.
Canopy, which has a $9.5 billion market cap, is now listed on the New York Stock Exchange under ticker symbol CGC, and index funds can invest in it, he said. Peterson also pointed out that Canopy’s sales, $25.9 million in its most recent quarter, aren’t that much larger than his firm’s recent $8.7 million in quarterly sales.
He’s worried about Canadian companies snatching American companies that are unable to raise capital.
“Nobody’s talking about what’s going on from a Wall Street perspective,” he said. “Companies north of the border and in Europe will raise millions and acquire the biggest U.S. companies.”
His company then did what many mainstream firms would do—it wrote a letter to President Donald Trump.
Terra Tech bought a full-page ad in the Wall Street Journal for almost $100,000.
Peterson wrote in the ad published on Oct. 16: “Dear Mr. President, We need your help!”
“Canada is threatening to deprive American farmers, workers and businesses from the prosperity that rightly belongs within our borders … The cannabis industry is legal in 31 states, yet most domestic companies do not have access to traditional banking or institutional financing,” Peterson’s letter said. “As a result, many US companies are being forced to move to the Canadian public markets to access capital and build their businesses.”
News outlets like MSNBC and CNBC covered the company’s plight.
CNBC cited a skeptical drug policy expert who said that since the U.S. is in the midst of an opiate and addiction crisis, permission “to let addiction industries thrive and prosper makes no sense.”
— Peter J. Brennan
