This is a copy of the November 18th edition of our weekly Newsletter, which we have been publishing since October 2015.
One of the big stories in 2018 has been NASDAQ and the NYSE rolling out of the welcome mat for Canadian licensed producers, with Cronos Group and Tilray listing on the NASDAQ and Aphria, Aurora Cannabis and Canopy Growth listing on the Big Board. With federal legality in Canada, these major exchanges have no reason to reject the companies. As we have stated before, we expect to see more Canadian LPs make the move, and we would suggest that Aleafia, CannTrust, HEXO Corp and Organigram are among a group that is likely to expand this list.
We think 2019 could be a breakthrough year for American companies to trade on a major exchange, which, if correct, could dramatically expand the investor base. At present, cannabis REIT Innovative Properties and Pyxus International, which has a controlling stake in two Canandian LPs but also a domestic hemp business, are the only U.S. companies currently trading on the NYSE, while GW Pharma, which is based in the UK, trades on NASDAQ, but we expect this will change.
Earlier this year, MTech Acquisition Corp conducted an IPO on the NASDAQ as a blank check company and later announced the pending acquisition of software company MJ Freeway. The company will be renamed Akerna upon closing of the transaction. While the major exchanges are unlikely to list companies directly growing, processing or selling cannabis, they are likely to welcome other ancillary names.
Companies at the top of the list in our view for upgrading their listings include GrowGeneration and KushCo Holdings, both of which have substantial sales and equity sufficient to meet requirements. On its Q3 conference call earlier this month, GrowGeneration CEO Darren Lampert indicated that the company has begun the process and plans to file the application within 90 days. We note that KushCo has changed its auditor and increased the number of independent directors on its Board, both related, we believe, to a potential uplisting. We have heard that Hydrofarm intends to list on a major exchange as well, and we are aware of some other companies with plans to do so too.
While we think success may be contingent upon hemp legalization, CBD provider CV Sciences has filed an application with the NASDAQ. If successful, we would expect to see Charlotte’s Web and Elixinol Global follow along with potentially some other companies that are currently private.
More American companies trading on major exchanges will open the door to more institutional investing and will benefit more than just those companies that achieve the listing status, as investors with a long-term exit strategy in mind will likely be more confident when investing in private ancillary companies. We have already seen this year how more companies trading on the major exchanges has had a positive impact on retail investor interest in the cannabis sector. The cannabis industry is maturing rapidly, and with this favorable development, we expect access to capital to continue to improve.
Growers Network, a private community for commercial cannabis professionals (and our sponsor for this Sunday newsletter), has been providing detailed inside looks at some of the most interesting cannabis cultivation facilities in the United States. Check out Episode 5 of the Canna Cribs Season 1, featuring Honeydew Farms in Humboldt County.
New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:
- Exclusive: 35 Top Revenue Generating Cannabis Stocks Ranked as of November 15th
- Acreage Holdings Raises $314 Million Ahead of CSE Debut
- Aurora Cannabis Revenue Grows 260% to $29.7 Million in Fiscal Q1
- Exclusive: Aurora Cannabis Spin-Off Australis Capital Begins to Deploy Substantial Capital in the United States
- Canadian Cannabis Consolidation as Invictus to Acquire GTEC Holdings for $100 Million in Stock
- CannTrust Sales Grow 105% to $12.6 Million in Q3
- Canopy Growth Sales Grow 33% to $23.3 Million in Fiscal Q2
- GTI to Acquire Nevada Cannabis Operator for $290 Million in Stock and Cash
- MedMen Substantially Revises Bought Deal
- Exclusive: MJardin Aims to Expand Portfolio of 35 Managed Cannabis Cultivation Facilities
- Supreme Cannabis Reports Q1 Sales Grew 229% to $5.1 Million
- Tilray Generates Sales in Q3 of $10 Million
To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.
Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers as well as the American Cannabis Operator Index.
View the Public Cannabis Company Revenue Tracker, which ranks the top revenue producing cannabis stocks that generate industry sales of more than $2.5m per quarter.
Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.
Consider subscribing to 420 Investor, Alan’s comprehensive stock due diligence platform since 2013 for more in-depth information and market intelligence about the publicly traded cannabis sector.
Discover your place in the cannabis industry by visiting our Careers and Jobs Page and learn which companies are hiring aggressively.
Alan & Joel