UNDERSTAND YOUR INVESTOR
TAKING STOCK
By Jenel Stelton-Holtmeier
Cannabis companies that go public have a choice of where to list their shares—but the options differ markedly
W
hen a company goes public, it is usually to access a broader pool of capital. But not all public channels are equal—and they’re not equally accessible.
SENIOR EXCHANGES
Senior exchanges, such as the New York Stock Exchange and Toronto Stock Exchange, have the broadest reach when it comes to capital markets. They also have the highest requirements for companies that list on them. These include number of shares held, minimum trading price and valuation requirements. Companies that list on senior exchanges also must make regular, detailed filings with a federal securities oversight agency, depending on the
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country where the exchange is based. Senior exchanges will not allow companies that operate in a federally illegal industry (including plant-touching cannabis operations) to list, which gives Canadian marijuana companies more options than are available to their U.S. counterparts. Senior exchanges include: • New York Stock Exchange (U.S.) • Nasdaq (U.S.) • Toronto Stock Exchange (Canada) • NEO Exchange (Canada)
JUNIOR EXCHANGES
Companies on junior exchanges must meet the same regulatory standards as those listing on senior exchanges, but the financial and operating
requirements are lower for listing on the junior exchanges. The pool of available capital is still large—but not as large as on senior exchanges. Junior exchanges also might allow plant-touching cannabis companies to list, even if their business activity is federally illegal where the operator is based. This is why so many U.S. cannabis companies have turned to the Canadian Securities Exchange for their ventures into public trading. Junior exchanges include: • Canadian Securities Exchange (Canada) • TSX Venture (Canada)
QUOTE SYSTEMS
While often listed in news stories in the