There’s a major migration that’s already hitting the United States, and most Americans have no idea about it. Some who know what’s up are calling it a wave, an influx, or even a fog drifting across the border. This is no Fox News hype about a caravan we’re talking about here–it’s the increasing number of Canadian cannabis stocks listing on American exchanges.
Of course, this has been going on for some time. You’re already familiar with several pioneers in the move from Toronto and Vancouver to the States and Wall Street.
Tilray (TLRY) has shot up from just around $22 per share at the beginning of 2018 to $300 very briefly. Sure, Tilray’s market cap slid in late October and its founders dipped down below the billionaire threshold, but they probably aren’t feeling too sorry for themselves. The company has great prospects and is well established.
Cronos Group (CRON) has enjoyed a steady rise in US trading over the course of several months, as Investors take a position in their strong portfolio of cannabis brands in Canada and elsewhere.
Canopy Growth (CGC) is positioning itself to be a titan in cannabis and got itself into a powerful pairing with Constellation Brands (NYSE: STZ), a global dynamo in wine, spirits, and beer. Canopy had to leave its Canadian ticker symbol WEED at the border, and it’s maturing as a company through its US listing.
More recently, Aurora Cannabis (NYSE: ACB) just listed and hit some headwinds presented by legalization in Canada, but its right to ship to Poland and its third-place status in its home country behind Tilray and Canopy make it a solid buy and hold for investors who want to catch a Canadian listing when it’s fresh to New York. And right as October ended, Curaleaf Holdings (CSE: CURA) of Massachusetts went up on the alternative Canadian Securities Exchange with a reverse merger that gave it a $4 billion valuation. That’s a reversal of the wave we’ve seen, but it points to the nimble nature of cannabis company executives and their faith in their ability to raise funds just across the border–whichever direction they’re looking.
So who’s next, and why are companies that can list–they can only go public in the US if their assets are exclusively in Canada–going so slow? Quite simply, they want to make sure they’re ready to make the move.
Aleafia (TSXV: ALEF | OTCQX: ALEAF) has a data-driven perspective that focuses on serving patients and matching them with the best products. As legalization drives fears of a commoditized, low-price market, Aleafia will help its own clinics, customers, and companies that want deep insights by continuing to pinpoint specific patient needs in cannabis.
Aphria (TSX: APH) is a patient-oriented medical marijuana and cannabis oil company that has high-quality products and eyes on the U.S. market.
All of these companies have gotten a lot of attention once they showed up south of the 49th parallel. So what explains the excitement? Maybe US-based investors see buying into Canadian cannabis stocks as something exotic or a way to tap an interesting foreign trend. But Canada isn’t so far away and neither is a real change in how Americans perceive cannabis.
From years of covering international markets, we know that the most compelling global investment themes are ones that cross borders and ones that make investors feel ahead of the game. Will a blue wave of Democratic victories in November make the trading environment even friendlier to cannabis companies as local politicians lighten up? Will the US federal government loosen restrictions on cannabis? Signs point to yes.
After all, cannabis has already been used as a bargaining chip between President Trump and Colorado senator Cory Gardner, a Republican who demanded protection for states that have legalized marijuana in exchange for letting Trump’s Justice Department nominees through. This level of pot politicking is very Washington, but the state capitals have their own inner workings, and Gardner has predicted that even highly conservative Utah will legalize medical marijuana in the coming year. The question is, will any cracking of the door through DC deal making lead to a real crashing of the gates on Wall Street? Or will the Maple Leaf continue to mark US investor access to green-leaf listings?
Expect continued interest and premiums assigned to Canadian cannabis shares at least until American companies in the space are able to go public based on American operations. After that, it’s logical to think that Canadian cannabis pioneers will continue to enjoy steady investment based on their first-mover advantage as well as their knowledge of the broader North American market and what works for producers and consumers. As an added bonus, Canadian cannabis stocks can be a haven from political and regulatory risk that threatens to give any American cannabis company whiplash when parties move in and out of power. Only time and some serious executive soul searching will tell if Canadian companies will ever actually ditch their home-country listings and opt solely for NYSE or NASDAQ. If and when the horizon is clear on a federal level in the States, that will be the time to make the big leap. As it stands, the heady times will continue for Canadian cannabis stocks into 2019.
Image source: Shutterstock
The Cannabis Investor is a leading media outlet for Cannabis investment opportunities and breaking industry news.
Join our text message list:
USA: Text potstocks to 313131 to join
CDN: Text potstocks to 393939 to join
Join our email list here: http://eepurl.com/bUSa71
Follow The Cannabis Investor on Social Media
Aleafia Health Inc. is a paid client of The Cannabis Investor.
This report/release/profile is a commercial advertisement and is for general information purposes only. We are engaged in the business of marketing and advertising companies for monetary compensation unless otherwise stated below.