US marijuana companies are listing in Canada so they can legally trade in the Canadian stock market. This comes as medical marijuana has been legal there for some time, and recreational marijuana is about to be as well.
US Marijuana Companies
Many US marijuana companies are heading to Canada where there isn’t a federal ban on marijuana in the stock market. In the US, marijuana is allowed for medical uses in 30 states, and for recreational use in 10. However, despite that, US marijuana companies still cannot be listed on US stock trades or even be eligible for governmental financial services, because the drug is still strictly under a federal ban.
MedMen just listed in Canada and started trading earlier this week through the Canadian Securities Exchange. The California-based marijuana harvesting company, Prime Harvest, is also about to be listed on the Canadian Securities Exchange.
Chand Jagpal, Prime Harvest’s Chief of Finance, said: “From the Canadian perspective, it’s not an illegal activity, from the US perspective it is.”
Some Canadian marijuana companies have also listed in the US, as they wouldn’t be held to the same restrictions as US companies.
Last month, the Canadian marijuana company, Canopy Growth, listed on the NYSE and started trading.
Many analysts, including Arcview Group’s Troy Dayton, say that it would quite beneficial for the US to federally legalize marijuana.
Charlie Alovisetti, of Vicente Sederberg, said: “Canadian investment is appealing because it allows you to get your foot in the door in the Canadian cannabis industry while remaining on the right side of the federal law.
Canadian revenues from medical marijuana had reached under $500 million in 2017. However, analysts predict that this will grow, especially as recreational marijuana use becomes legal. New Frontier Data predicts that this move alone might spark a $6bn market in 6 years time.