As investor interest in the cannabis sector has heated up, more and more companies have raised capital through the public markets in Canada, leading to the existence of hundreds of publicly-traded cannabis stocks – and a relatively new stock exchange. Here are the details.
By Lorimer Wilson, editor of munKNEE.com – Your KEY To Making Money!
- Canada’s largest exchange operator, TMX Group, which operates the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV), warned in 2017 that listed pot companies with assets in the U.S. were not in compliance with their requirements.
- That sent many U.S. cannabis companies over to the Canadian Securities Exchange, which allows firms to list provided they disclose the associated risks to investors. Last year, cannabis and related companies accounted for 60.5% of the trading volume on the CSE.
- In addition, a few listed on the relatively new Canadian NEO Exchange.
As mentioned above,
- the TSX (incl. the TSX-V) won’t allow any issuers to participate in the U.S. market due to the risk factor associated with cannabis companies that remain technically illegal at the federal level and
- the CSE can’t list ETFs due to its status as a venture exchange.
That is where the relatively new (2015) Canadian NEO Exchange – owned by Aequitas Innovations, a company backed by a number of Canadian and international corporations – has come to the rescue of both U.S. Multi-State Operators (MSOs) and marijuana ETFs. The NEO:
- allows listings of companies operating in the U.S. cannabis market as long they acknowledge the risks they are exposed to in their prospectus thereby providing an easier pathway to a potential listing on the New York Stock Exchange or Nasdaq if U.S. laws change because its listing requirements are closer to those of the big boards and
- permits the listing of ETFs.
To separate itself further from the pack, a variety of benefits for NEO-listed securities are provided, including:
- free real-time market data,
- built-in market making services,
- countermeasures against predatory high-frequency traders,
- enhanced liquidity, greater visibility, lower fees, and more.
Given the attractiveness of the NEO Exchange, it is now home to over 90 corporate and ETF listings, and consistently facilitates over 10% of all Canadian trading volume.
The following cannabis stocks/ETFs (excluding special purpose acquisition corporations, a.k.a. SPACs) are listed on the NEO stock exchange:
- Horizons US Marijuana Index ETF (HMUS)
- Horizons US Marijuana Index ETF, the world’s 1st passively managed U.S.-focused marijuana ETF, began trading on the NEO Exchange on April 18, 2019.
- Horizons Emerging Marijuana Growers ETF (HMJR)
- Horizons Emerging Marijuana Growers ETF invests 100% invested in marijuana producers and distributors with market caps between C$50M & C$500M and began trading on the NEO Exchange on February 13, 2018
- Evolve US Marijuana ETF (USMJ)
- Evolve US Marijuana ETF, the world’s 1st actively managed U.S.-focused ETF, listed on the NEO Exchange on April 17, 2019.
- Purpose Marijuana Opportunities ETF (MJJ)
- Purpose Marijuana Opportunities ETF, Canada’s first actively managed cannabis fund (with 37.8% U.S. exposure), began trading on the NEO Exchange on May 11, 2017.
- Columbia Care (CCHW)
- Columbia Care, the largest fully-integrated multi-state medical cannabis operator in the U.S., officially began trading on the NEO Exchange on April 29, 2019 after being acquired by Canaccord Genuity Growth Corp.
- Halo Labs Inc. (HALO)
- Halo Labs, a cannabis extraction company focused on developing and manufacturing cannabis oil and concentrate products, started trading on the NEO Exchange on October 3rd, 2018.
- Maple Leaf Green World Inc. (MGW)
- Maple Leaf Green World, with Canadian operations in British Columbia and U.S. operations in Nevada, started trading on the NEO Exchange on April 20th, 2018 after migrating from the TSX Venture Exchange.