Add Mike Novogratz to the list of investors looking to Canada for a quick route to public markets to tap the latest crazes: from bitcoin to lithium to marijuana.

Novogratz, the former Goldman Sachs Group Inc. banker turned bitcoin champion, is starting a merchant bank called Galaxy Digital LP dedicated to cryptocurrencies and blockchain. And he’s taking advantage of a shortcut onto the Toronto Stock Exchange’s junior bourse to go public.

Novogratz’s plan is to acquire Vancouver-based First Coin Capital Corp. and then list the combined company through a reverse takeover of an inactive firm called Bradmer Pharmaceuticals Inc. Bradmer is currently listed on the NEX, a board for companies that fall below the TSX Venture Exchange’s listing standards. If the deal goes through, it will change its name to Galaxy Digital Holdings and resume a listing on the Venture exchange.

It may sound bizarre for a high-profile fund manager to list a new merchant bank via a tiny Canadian pharmaceutical company, but the strategy is widely used in the cryptocurrency space and other emerging sectors like pot. The TSX Venture Exchange has hundreds of "zombie" shells that can provide access to listings via reverse takeovers.

RTO Route

RTOs, as they’re known, don’t require a full securities commission review or the weighty prospectuses that are the hallmark of initial public offerings. Usually faster and cheaper than an IPO, RTOs have been used 265 times on the TSX Venture since 2001. By comparison, there were just 49 over the same period on the Nasdaq.

Canada’s widespread use of RTOs makes it an outlier, even as the bourse hails it as a way to develop small companies. The U.S. Securities and Exchange Commission adopted new rules in 2011 that made it harder for private companies to use them, and the U.K.’s Financial Services Authority took steps in 2012 to close loopholes that had allowed some ineligible companies to list that way.

The strategy is often used by new companies in the cryptocurrency sector. Hive Blockchain Technologies Ltd. listed via a reverse takeover of Leeta Gold Corp. and soared 220 percent on its first day of trading in September. Before the listing, millions of Leeta shares traded hands without a disclosed price, as required by securities rules. Hive says it was a private transaction involving a predecessor company, and that it meets all disclosure requirements.

Hut 8 Mining Corp., another Vancouver-based bitcoin company, plans to debut on the TSX Venture Exchange this month via a shell listing.

Other sources of cryptocurrency and blockchain-related listings outside Canada have been even more bizarre. Long Island Iced Tea Corp. surged as much as 298 percent after announcing a name change to Long Blockchain Corp., and Crypto Co. is the product of a reverse merger with a company that made water and radio-wave resistant sports bra pockets.