These 5 pot stocks are now listed on the NYSE or Nasdaq – The Fool Motley

The historical year of marijuana stocks continues. Although you probably knew the biggest event of the year – the legalization of cannabis for recreation in Canada – much more history has been made than this one.

For example, Vermont became the first US state to legalize adult marijuana exclusively through the legislative process in January (that is, without this being subject to the vote of residents of that state). We have also seen GW Pharmaceuticals On June 25, the US Food and Drug Administration approved the cannabis treatment approved by the Food and Drug Administration. This cannabidiol-based oral solution, known as Epidiolex, also received the lowest possible classification (Appendix V) for a controlled substance, the US Drug Enforcement Agency.

S raising to reputable exchanges in the United States has become the "next big deal"

However, one of the main trends this year is undoubtedly the increase in jar stocks from OTC to more popular US and Canadian exchanges.

Why uplist? While the OTC has done admirable work in strengthening the reporting and rating standards, it is still not as strict as, for example, the New York Stock Exchange (NYSE) or Nasdaq.

More importantly, not all financial institutions will invest in companies trading in the over-the-counter market. This limits trading volume, analyst coverage and potentially even interest in marijuana stocks. By switching from OTC to a larger exchange, these companies are demonstrating that the cannabis industry is a legitimate business model and that they meet the listing requirements alongside proven companies. These companies also hope that this will result in positive analyst coverage, increased investment, and improved transaction liquidity, all of which are not guaranteed in over-the-counter markets.

It is interesting to note that marijuana stocks registered in Canada are not allowed to be listed on the Toronto Stock Exchange, while US pot stocks can not be listed on the NYSE or Nasdaq. For example, Canadian marijuana stocks have turned south to obtain institutional exposure, while US companies such as MedMen companies listed in Canada.

These five marijuana stocks were all transferred to Nasdaq or the NYSE

To date, five Canadian marijuana stocks have chosen to transfer their listings to one of two major US markets.

1. Cronos Group (NASDAQ: CRON): The Cronos group became the first pot stock to be placed in a major stock exchange, in this case the Nasdaq, at the end of February. Cronos, which is expected to be among the 10 largest producers in July, announced in July a joint venture with a group of investors that will build a 850,000 square foot greenhouse capable of producing 70,000 kilograms of greenhouse gas. annual yield.
2. Canopy Growth Corp. (NYSE: CGC): Canopy Growth planned to be the first pot stock to feature up in October 2017. These plans changed when it received the first of what would become the giant's three major investments in alcoholic beverages. Constellation Brands. With Tweed, probably the best-known cannabis brand; superior sales channels; and production capacity likely to rank second, with about 500,000 kilograms per year at maximum capacity, Canopy Growth has certainly benefited from increased exposure.
3. Tilray (NASDAQ: TLRY): Although Cronos defeated Tilray at the Nasdaq scorecard, Tilray has made history by becoming the first marijuana stockpile in Canada to enter the public offering in the United States. Currently laying the groundwork for its international expansion and capacity growth, Tilray will likely become one of the top five producers three years from now.
4. Aurora Cannabis (NYSE: ACB): In October, Aurora Cannabis was listed on the NYSE with the obvious goal of attracting investors in the long run. Aurora Cannabis is expected to be the largest volume producer in Canada. Included his ICC Laboratories The acquisition and development of a 1.1 million square foot capacity at Aurora Cannabis is expected to easily exceed 600,000 kilograms of annual production. In other words, he deserves a lot of his listing on the NYSE.
5. Aphria (NYSE: APHA): Last but not least, Aphria was listed on the NYSE just a few days ago. Aphria plans to become the world's third largest producer in terms of annual yield, with an estimated consumption of 255,000 kg. Aphria's focus on cannabis-based products, including its concentrate extraction center under construction, is expected to play an important role in increasing its operating margin and profitability. # 39; company.

Something to keep in mind

Of course, investors also need to understand that participating in a trustworthy exchange is just a small step in the vast marijuana stock plan. While this will give more visibility to these companies and perhaps even attract institutional investors, but it is not a manufacturer of needles for their production or production. their profitability.

Perhaps the biggest benefit to investors is that the development of this industry will take time. For example, investors are excited that Aurora Cannabis, Canopy Growth and Aphria will potentially produce up to 1.4 million kilograms of overall annual yield at their peak. Yet, for the time being, these companies generate a combined annual turnover rate of only 120,000 kilograms. This production will not just appear overnight, so patience is recommended to investors.

Similarly, profits could still be an issue for these pot stocks. As mentioned above, Tilray is increasing its production capacity and looking for opportunities in foreign markets. The same can be said for Canopy Growth, which should use its cash reserve to drive international sales and make acquisitions. This means that neither company is a good bet to be profitable for the 2019 fiscal year even though sales are taking off, as expected.

The push to the top list remains a great story for investors in marijuana stocks, but this is not a reason to alter your investment thesis on these stocks.

Sean Williams has no position in any of the actions mentioned. Motley Fool recommends Constellation Brands and Nasdaq. Motley Fool has a disclosure policy.