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Canadian Pot Producers Listed in the U.S.: What it Means for Investors

In late February, shares of Cronos Group Inc. (TSX:CRON)(NASDAQ:CRON) made headlines as the company announced that it would be listing on the NASDAQ exchange, the first Canadian company to venture into the U.S. market for a dual listing. The importance of such a move should not be understated; for Cronos shareholders, it materialized into a one-day gain of 36%.

Not too shabby.

The NASDAQ exchange, as well as the NYSE, appear to be ready to do business with all Canadian producers. Let’s see how each of the major Canadian cannabis players stack up in terms of their listing status to date.

Canopy Growth Corp.

Canada’s largest producer by volume, Canopy Growth Corp. (TSX:WEED)(NYSE:CGC) has already attained a listing on the New York Stock Exchange, widely viewed by many as a one-upping of Cronos’ NASDAQ listing earlier this year. The company’s CEO Bruce Linton had previously hinted that he was working on a listing with the NASDAQ, which was postponed due to the ongoing discussions with Constellation Brands, Inc. for an investment that eventually occurred.

Aurora Cannabis Inc.

Canada’s second most valuable pot producer by market capitalization, Aurora Cannabis Inc. (TSX:ACB) has stated its intention to list on a U.S. exchange, and is presumably working on such a route at this point. The company’s CEO also announced that it would be looking at options to list in Europe, perhaps in a bid to have a three-way listing, to once again one-up the competition.

Aphria Inc.

For Aphria Inc. (TSX:APH), the path to listing on a U.S. exchange would likely require the complete divestiture of all of the company’s assets south of the border, something Aphria’s management team appears to be complying with. The company would also need shift its focus away from the U.S. market, one of the previous selling points of buying shares in Aphria compared to its competitors.

Bottom line

The reality remains that Canadian cannabis companies are likely to continue to pursue listings in the U.S. as a direct result of the increase in investor demand for the cannabis sector, driving share price growth and access to liquidity within equity markets.

In addition to other high-profile investments in Canadian companies from major U.S. alcohol companies, the thought is that by having more listings on U.S. exchanges, American investors will become much more confident with investing in this sector, a sector that’s still illegal in the U.S.

Stay Foolish, my friends.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any stocks mentioned in this article.

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