Canadian firm becomes first pot producer to list on major U.S. stock exchange
The Nasdaq listing allows U.S. investors to legally invest in marijuana stocks
Toronto-based Cronos Group is set to be the first marijuana company to list on a major U.S. stock exchange when it begins trading on the tech-heavy Nasdaq composite on Tuesday.
The move is a significant milestone for the company and the broader marijuana sector that has faced resistance from the Trump administration.
In January, the U.S. Justice Department had repealed an Obama administration policy that eased the enforcement of federal marijuana laws in states that legalized the drug.
Federal law in the U.S. still prohibits marijuana use, despite some states like California moving to legalize it.
"This up listing to Nasdaq is a major corporate milestone and reflects the significant progress we have made in strengthening our corporate governance and expanding our global footprint," said Mike Gorenstein, CEO of Cronos Group in a statement on Monday.
The company is already trading in Toronto on the TSX Venture Exchange and its shares were up over five per cent in the afternoon after news of the new listing.
Cronos shares are up over 200 per cent in the past year, similar to its counterparts in Canada that have seen shares skyrocket on the expected legalization of recreational marijuana in the country by this summer.
The Nasdaq listing allows U.S. investors that were hesitant over the legality of investing in marijuana stocks outside of the country to now invest legally.
"We believe this will increase long term shareholder value by improving awareness, liquidity, and appeal to institutional investors," Gorenstein said.
The company told Bloomberg that Nasdaq's approval came after it spent six months preparing its application for the listing.
Cronos operates two production facilities in Ontario and British Columbia and has operations internationally in Israel and Australia. It also has access to over 12,000 pharmacies in Germany.
The company will trade under the "CRON" ticker symbol on the Nasdaq, along with U.S. tech heavyweights such as Apple and Google.