For those hoping to get in on the cannabis stock game, a Canadian company has gotten approval to start trading on the NASDAQ. It's the U.S. Stock Exchange's first listed marijuana company, according to VICE.
The company, Cronos Group, is already on the Toronto Stock Exchange but will make its American debut this week. As Canadians wait for the legalization of recreational weed sometime this summer, the interest to invest in cannabis stock has stretched south of the border, too. The stigma attached to buying cannabis stocks and weed in general (since it's still federally illegal across the U.S.) has made it a niche endeavor.
But it's actually completely legal for Americans to own Cannabis stocks despite the current legal standing of the drug itself. "I grew up in the U.S. and most of our investor base is in the U.S.," Mike Gorenstein, CEO of the Toronto-based company, told VICE Money. "But I still get calls from American investors who are unsure as to whether they can buy Canadian weed stocks." Gorenstein also explained that while recreational weed is only legal in nine states and medical weed is legal in 29, the American market for weed is worth billions, and it will only grow even more in coming years.
The process of getting the company listed in the first place was, of course, not without its obstacles. “It’s complicated and intense because of their securities rules. We started building a relationship with the NASDAQ sometime last year, and we had to go through many audits and reviews by different independent committees to make sure that our governance was up to snuff,” said Gorenstein.
Prior to this listing, American investors had to go through the Toronto Stock Exchange or invest via the ETFMG Alternative Harvest ETF on the NYSEArca, a smaller U.S. exchange that mainly trades ETFs, allowing people to invest in a handful of weed stocks. Cronos's listing on the U.S. stock exchange introduces a specific brand to investors who might want to hedge their bets on just one company.
“This is about our shareholders. I will just stress that we do not plan on entering the U.S. market from a production or sales standpoint until cannabis is federally legal,” Gorenstein clarified. Currently, the company has a market value of $1.4 billion and plenty of growth potential. It not only produces cannabis for the Canadian market but also ships products to Germany, and it plans to work alongside countries like Australia and Israel to produce medicinal marijuana.