ACBFF Stock Looks for Nasdaq Listing
It’s all the rage these days. Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) is the latest marijuana company to jump on the bandwagon, issuing a press release detailing its interest in being listed on some of the most prominent stock exchanges in the world, including the Nasdaq, the London Stock Exchange, and the New York Stock Exchange.
“We’ll look at all exchanges; we’ll look at New York Stock Exchange,” said Aurora Cannabis CEO Terry Booth. “Cronos broke that barrier, and good on ’em, it’s excellent for everybody.” (Source: “Aurora Cannabis U.S. Listing Could Be Fuel for Its Stock Price,” SmallCapPower, March 8, 2018.)
Other than those vague details, there was little in the way of substance in Aurora’s press release. The company was hoping that talk of a move to a more international listing would help boost ACBFF stock, but surprisingly, the company’s value was barely affected.
This has left a number of investors scratching their heads. After all, both Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) and Cronos Group Inc. (NASDAQ:CRON) were beneficiaries of listing talk.
In the case of Cronos stock, the company became the first marijuana company to be listed on the Nasdaq. In the case of Canopy Growth stock, just talking about being listed had shares humming.
But when Aurora Cannabis made its announcement regarding stock market listings, ACBFF stock was silent. Why?
Well, there are a number of factors that could have played a part.
First, it may be that investors are tired of hearing about potential stock exchange listings. While Canopy Growth stock enjoyed a boost following its announcement that it was pursuing a Nasdaq listing, maybe investors wised up and figured that talk is cheap.
Furthermore, CRON stock actually made the jump to the Nasdaq, while Canopy had been looking into a new listing for months. That Aurora is jumping in now seems a little like opportunism.
Chart courtesy of StockCharts.com
But that doesn’t mean Aurora doesn’t stand to benefit from a Nasdaq listing. Should it find a way to end up as the second marijuana stock on the exchange, that would do wonders for ACBFF stock (or whatever the new stock ticker would be).
The fact is, as I’ve said before, the main reason that CRON stock and Canopy Growth stock enjoyed such gains as a result of their Nasdaq news was that being on the Nasdaq would make it easier for U.S. investors to get involved.
I don’t just mean easier in that investors often prefer reputable stock exchanges to over-the-counter shares, which is true, but also in terms of making a marijuana stock more palatable to American investors.
It’s hard to want to put money into something that is technically forbidden by your federal government. That marijuana in all its forms is still considered illegal across the U.S., according to federal law, is giving American investors pause. And that’s reasonable.
While I’ve touched on the topic of a U.S. marijuana crackdown many times, I ultimately don’t believe one is on the way. But still, the very idea that one may come has probably kept many cautious investors out of the market.
But marijuana companies being on the Nasdaq would help assuage at least some of those fears and would encourage further U.S. investment. So there’s a good reason why companies looking to list on the Nasdaq would be adding value to their stock.
But in the case of ACBFF stock, we didn’t see any price movement come as a result of this news, while Canopy Growth stock and Cronos stock both jumped double digits in the immediate aftermath following their respective Nasdaq announcements, which means that investors are looking for more concrete actions, rather than just talk.
Marijuana Stock Forecast: News Affecting the Industry
ACBFF stock’s Nasdaq listing trouble wasn’t the only news last week, with one story in particular potentially putting strain on the industry.
A recent report by the International Narcotics Control Board put Canadian marijuana legalization under fire. The report states that the country’s plan to legalize recreational pot will mean that Canada is violating international drug control conventions.
“As the board has stated repeatedly, if passed into law, provisions of Bill C-45, which permit non-medical and non-scientific use of cannabis, would be incompatible with the obligations assumed by Canada under the 1961 Convention as amended,” said the report. (Source: “International Narcotics Control Board remains troubled by Canada’s pot legalization plan,” CBC, March 8, 2018.)
The Canadian government, for its part, has yet to explain how it plans to stay in compliance with the international laws while moving ahead with legalization.
There are consequences that the International Narcotics Control Board could levy against Canada but, ultimately, this is likely to amount to little more than stern words.
Where the true danger lies is in whether Canadian politicians who oppose marijuana legalization seize on this news to further delay Canada’s plan. While there are no signs that such a strategy is taking place, politicians in Canada have already delayed legalization once this year.
If the Conservative Party—the opposition party that largely opposed legalization during the last election—looks to further push back the Canadian marijuana legalization date, this report could serve as a handy tool to support their position.
It’s possible that the ACBFF stock price was affected by the report, with the whole marijuana industry falling several percentage points in the past few days, although that could be attributed to a variety of factors.
The news, as always, has a profound effect on the marijuana industry, and we’re seeing that play out in real time with ACBFF stock.
When it first broke that CRON stock would hit the Nasdaq, Cronos enjoyed a huge uptick in its profile and its share value.
Canopy Growth stock followed suit with an announcement that it had its eyes on the Nasdaq. That the company had not yet landed on the Nasdaq didn’t stop it from seeing gains.
But for Aurora Cannabis stock, it has played out differently. The company didn’t see the expected uptick in its stock price; the market responded with a shrug to Aurora’s Nasdaq announcement.
That doesn’t mean the hype surrounding moves to the Nasdaq is dead, but it does mean that companies now have a higher threshold to pass if they want to excite investors. Hard information regarding dates and actions, for one, would help.
But really, ACBFF stock’s ultimate sin was being late to the party.
CRON stock becoming the first marijuana stock to be listed on the Nasdaq helped boost that stock’s value.
When Canopy revealed that it too had been exploring becoming listed on the Nasdaq, the market reacted positively, due to the company’s prominence and the evidence behind its Nasdaq interest.
With Aurora being the third marijuana company to express interest in being listed on the Nasdaq, its announcement ultimately fell flat.
But to be fair, ACBFF stock has been on a tear in the past year and is one of the hottest pot stocks around, with or without a Nasdaq bump.
Still, companies need to understand the importance of being first with news like this, and how timing can mean the difference between a great week and a shrug.