Canadian exchanges present testing grounds for hashish shares

When the tech industry and the web took off like a rocket in the 1990s, I was a technology writer at Wired. I heard dozens of PR pitches every day, and some of them sounded like they were cut straight out of a science fiction novel. Of course, that hasn’t stopped many of the far-fetched startups from listing on NASDAQ and the New York Stock Exchange, gaining instant credibility, and sparking the imagination of impulsive investors and venture capitalists alike who have poured millions of dollars into their valuations.

When the dot-com bubble burst in 2002, many companies had crashed, burned, and landed on the proverbial ash heap of history. Entrepreneurs and investors have learned some tough lessons, and the restart that followed has relied more on real-world results and profits than on whimsical, desirable predictions.

Looking ahead twenty years, and now emerging cannabis companies are eager to make a claim in the public markets. One problem: As long as cannabis remains illegal at the federal level, companies that come into contact with plants are not listed on the US stock exchanges. But maybe that’s not so bad after all. It could be a blessing that the burgeoning cannabis industry isn’t exposed to the bright lights of the major U.S. stock exchanges, where hype and hysteria can lead to Reddit-meets-Robinhood-meets-GameStop-type debacles. Meanwhile, Canadian markets are welcoming cannabis companies with open arms. While these exchanges may not be as prestigious or populated by institutional (read: deep pocket) investors, the Canadian Stock Exchange (CSE) and the Toronto Stock Exchange (TSX) Nonetheless, they have become the largest platforms in the world for trading cannabis stocks, in addition to over-the-counter (OTC) deals that bypass the broker exchanges altogether (so caveat).

If you want to get involved in the largest U.S.-based cannabis companies – e.g. Curaleaf, Green Thumb Industries, Cresco Labs, Trulieve, MedMen Enterprises, and Land stocks– You can find them in the CSE. There are also hundreds of smaller companies all fishing for investors who can help them grow, scale, and survive in an increasingly competitive U.S. industry. Hollister Cannabis Co., based in the Central Valley of California, is one of those companies. Carl Saling is the managing director and co-founder. As an entrepreneur who has been building business since his youth, he knows both the pitfalls and the possibilities of listing on a public stock exchange.

“I know the CSE is very optimistic about cannabis companies as long as they are operated properly, so they have provided a lot of support and connections and it has been great for us,” he said. “But you have to know what you are getting yourself into. Once you’re public, the door opens to a lot more control, so anyone who owns even a stock can ask questions. It is important to have a system for this. “

And oh so many questions! In the past few years, if you’ve attended a cannabis investment pow-wow or industry conference while waiting in line for a CBD-laced coffee, you may have caught a conversation along these lines:

“If this reverse merger is done, will we be reporting our profits with the mining company or the software group or both? And what are these people striving for anyway? “

“Wait … is the CSE better than the OTC and why? [fill in the blank] Companies listed on both? “

“Is the Canadian dollar worth more or less than the American dollar?”

Despite any confusion or questions about how the markets north of the border work, most cannabis companies are grateful that the markets exist and are providing much-needed capital and potential boost to better-known markets in the future. The appeal of the Canadian markets for cannabis companies is obvious: it is much easier for companies to raise money than daily dog-and-pony shows to private investors, who pass the opportunity about 99 percent of the time. When stocks begin to mature in public markets, employees and investors have an opportunity to cash out and put money in the bank. For companies like Hollister cannabisThe CSE has made it possible to expand, venture into new territories and dream of new horizons when the US legalizes weeds at the federal level.

“We had a lot of individual investors early on, but now that we’re more established and our revenues are where they are, institutional investors are coming in and being in a public market makes it possible,” said Saling. “We liked the CSE because our partner has a track record there and we also have a sister list in the OTC. Hopefully there will be a way for us to be on NASDAQ at some point. That would be great.”

For cannabis companies in the US, CSE, TSX, and OTC are like baseball in the minor league: companies have to prove they can hit the fast ball, turn the ball and be a consistent player in the long run. After companies have proven themselves in the CSE, they’re ready and excited for a bigger stage with brighter lights.

Then of course there will be even more know-it-alls in the front row who will criticize every strike and every mistake. But that’s all part of the game.

Comments are closed.