Marijuana News Today: U.S. Stock Lists on Canadian Securities Exchange

U.S. Stock Lists on CSE
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Marijuana News Today

In the marijuana news today is MedMen Enterprises and its move to go public, listing on the Canadian Securities Exchange (CSE).

This makes MedMen one of the few American companies to attain a public stock listing outside the over-the-counter (OTC) markets.

We’ve long talked about how the Canadian market is just one, relatively small, domino to fall as we progress toward fuller marijuana legalization around the globe. The U.S. market is one of the biggest fish around, in this context.i

But due to U.S. federal laws prohibiting marijuana sales, transporting pot across state lines and other practices are prohibited, making the marijuana business much more difficult in America.

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Those problems extend to the major U.S. stock exchanges like the Nasdaq and the New York Stock Exchange (NYSE), neither of which has a major U.S. marijuana company listed.

But U.S. companies are hungry for investor capital. They want in on the legal marijuana open market. So they’ve begun to turn toward Canadian stock exchanges, with MedMen being the latest example.

MedMen is a Los Angeles-based cannabis company with marijuana stores in New York, California, and Nevada. (Source: “‘Massive rush’ of U.S. pot companies tapping into Canada’s stock market,” The Toronto Star, May 28, 2018.)

Through a reverse takeover of Ladera Ventures Corp., MedMen will be listing on the CSE in an effort to access that large store of capital that has infused dozens of Canadian marijuana companies. (Source: “Another U.S. Marijuana Company Goes Public In Canada,” Forbes, May 29, 2018.)

MedMen currently maintains operations in three U.S. states and hopes to open stores in Canada with the help of Cronos Group Inc (NASDAQ:CRON).

The two companies first announced their partnership months ago. Due to the convoluted nature of the U.S.-Canada marijuana laws, we’re seeing Cronos stock—a Canadian company—listed on the Nasdaq, while the American MedMen stock has to list on the CSE.

The upshot for MedMen stock is that it will now be open to investment from the public. Not to mention, Canadian institutional investors are far more comfortable investing in the marijuana industry compared to U.S. institutional investors, primarily due to the laxer marijuana laws and eventual legalization in the Great White North.

For pot stock investors, another U.S. marijuana stock means more options to gain exposure to one of the most lucrative marijuana markets on the planet.

While the U.S. is still a long way away from marijuana legalization, consider that California alone represents a bigger market by both population and wealth, compared to Canada.

Gaining exposure to these huge and booming marijuana markets in the U.S. is a great way to diversify a marijuana portfolio that is heavily focused on Canadian and international markets, just by virtue of what’s available.

Consider that companies like Canopy Growth Corp (NYSE:CGC) maintain no operations in the U.S.

CGC Stock News

In another bit of marijuana news today, we’re still following the performance of CGC stock after Canopy Growth listed on the NYSE.

One of the major benefits of listing on the NYSE was that it gives Canopy Growth stock the air of legitimacy that so many marijuana companies desperately crave.

To many people, this is still a borderline illicit business, and that misconception serves as a roadblock to investment.

Listing on major international exchanges like the Nasdaq and the NYSE helps to ease those concerns.

As for CGC stock, it also allows the company to be a primary target for U.S. capital. Win-win, right?

Chart courtesy of StockCharts.com

On May 28, it didn’t quite seem so, with CGC stock falling several percentage points. In the past five days, the stock fell by over seven percent.

Today, however, Canopy Growth stock has rallied nicely, garnering a boost of about six percent.

We’ll be doing a CGC stock forecast in the near future, so be sure to keep an eye on Profit Confidential for that.

CRON Stock News

CRON stock has been one of the more uneven trades in the marijuana market so far in 2018.

It gained a nice boost to its value after it listed on the Nasdaq, but claims that the stock has since become overvalued have dogged the company ever since its last quarterly report.

Moreover, among the largest marijuana stocks, CRON stock performed relatively poorly through the month of May, whereas many other pot stocks leaped by double-digits.

Today, CRON stock is up one percent, but down seven percent overall in the past five days.

We’re seeing a bit of pullback to close out May, and CRON stock still has yet to recover from its quarterly report. The MedMen deal could help boost stock prices long-term, but recent weeks have not been kind to Cronos Group stock.

Analyst Take

The marijuana industry is certainly one of the stranger ones in terms of stock market listings.

What we have is a bizarre dance in which U.S. and Canadian pot companies jump border lines in order to list on the other country’s stock exchanges. This is creating a configuration that is spread across two countries and several exchanges.

Due to the cannabis laws, it’s simply the only way they can operate at the moment.

But, in any case, marijuana investors are being given more and more options in how they can invest in the legal pot market.

CGC stock on the NYSE allows for U.S. capital to enter one of the largest marijuana companies in the world.

Meanwhile, MedMen’s CSE listing will allow the stock to go public without infringing on any U.S. laws. It also gives pot stock bulls another option to gain exposure to the U.S. markets.

These are both wins in the marijuana news today.