When it comes to cannabis stocks in North America, there is a very strange dynamic about which companies can trade on certain stock exchanges, funds and indices.
Due to the ongoing federal cannabis ban in the United States, U.S.-based cannabis companies cannot list their shares on certain U.S. stock exchanges by default.
In contrast, U.S. cannabis companies are listed as over-the-counter shares in the U.S., which have different requirements, or are listed on Canadian exchanges.
Ironically, Canadian cannabis companies may be listed on certain U.S. stock exchanges by default because of how funky rules are currently set up.
Until the situation changes, the largest cannabis in the United States will continue to be added to Canadian stock markets, and recent events will make this an even more attractive option.
Senior Degree for the Stock Exchange
According to an interview with BloombergRichard Carleton, executive director of the Canadian Stock Exchange, said up to 80% of the approximately $ 31.6 billion in market value of the industry hosted by the CSE is made up of U.S. companies.
Carleton announced the creation of a new “senior level” that would help those and other companies that want to trade favorably on the Canadian stock market.
The proposal, which would allow US cannabis companies to hold securities instead of margins, has yet to be approved by regulators.
Creating a senior level would reduce the capital costs of smaller cannabis companies and increase their chances of being included in U.S. small and medium capitalization rates in Canada.
It is a proposal that would obviously help cannabis companies that cannot be listed on their domestic stock exchanges, and would also help investors around the world by giving them greater access to additional investment opportunities in the cannabis industry.
Changing stock landscape
Obviously, there is a tectonic shift that will occur at some point in the form of the United States finally ending the federal ban on cannabis.
While it is debatable when exactly this will happen, policy change is inevitable, and when it does occur, it will have a dramatic effect on the entire global cannabis industry.
If it were to happen hypothetically today, most, if not all, U.S.-based cannabis companies would leave foreign currencies and trade on the largest U.S. stock exchanges.
However, the movement of the Canadian Stock Exchange aims to get out of this change as much as possible.
If U.S.-based cannabis companies can find a home now in a currency and between favorable funds and rates, and those funds and rates become extremely popular, maybe some will stay.
It will probably depend on how long it takes the US to end the federal ban. At the current rate, time might pass.