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Will these 2 Pot Stocks Get Bigger Listings?

Not all cannabis companies seek bigger listings, but these two could.

Photo by Víctor Vázquez on Unsplash

Canada is the home and native land for most budding pot stocks, listing on the Canadian Stock Exchange (CSE) or Toronto Stock Exchange and its smaller Venture arm (TSX and TSXV). 5 cannabis companies have listed on the New York Stock Exchange (NYSE) or Nasdaq recently. While ‘uplisting’ can be great for pot stocks on the move, not all companies can or will uplist. We take a look at a couple that are ripe for the move.

There are many reasons to move to the large  exchanges, such as NYSE or Nasdaq, from an over-the-counter (OTC) exchange.

While OTC listing is cheaper with less stringent standards than the large exchanges, there’s much to gain from uplisting.

Those stricter reporting standards give retail investors a greater comfort level to invest. Beyond comfort, those standards also allow institutional investors to buy the stocks within their mandates.

Meanwhile, pot stocks become much more liquid on large exchanges than they are over-the-counter.

Nonetheless, not every cannabis company can list their shares on NYSE or NASDAQ. Cannabis companies conducting business in the U.S. cannot list on a major exchange. Indeed, marijuana remains a Schedule I drug in the U.S. at the federal level. As such, NYSE and Nasdaq only grant listing to companies with cannabis operations outside the U.S.

Not all pot companies can list

In 2018, five cannabis companies uplisted. HEXO Corp. looks to follow suit before the end of the year. But there a couple more that fit the bill.

CannTrust Holdings

Market cap.: $750 million.

CannTrust Holdings (TSX: TRST.TO) May have it’s ducks in a row for listing on a major U.S. exchange.

The company boasts a 60,000-square-foot Vaughan Ontario facility. Meanwhile its focus is on bringing down costs at the company’s upcoming 1-million-square-foot Niagara Greenhouse hydroponic grow farm.

Bus far, the company has generated most of its revenue from cannabis oil sales. Cannabis oils sell at a higher price with more attractive margins.

Listing up could be a good move for CannTrust. Keeping in mind, the upward move’s been a boon to some and anticlimactic for other producers in the space.

OrganiGram Holdings

Market cap.: $600 million.

OrganiGram Holdings (TSXV: OGI.Vcould be a candidate to uplist to either Nasdaq, or the NYSE.

Although the company have some scaling up to do, OrganiGram could soon be among the top 10 cannabis producers.

Even though the company’s facilities in Moncton, New Brunswick won’t be done until April, 2020, OrganiGram’s production forecast significantly increased in March.

Its updated forecast projects 113,000 kilograms per year, emanating from under 500,000 square foot facilities.  That number represents a 65,000 kilogram increase from prior forecasts.

OrganiGram is among producers obsessed with keeping costs down. They’ve also kept a focus on maximizing their greenhouse space.

Written by Jason Bagg

Mr Bagg has over 20 years experience in financial services ranging from Capital Markets to Private Equity. Mr Bagg has helped clients build wealth, reduce taxes and plan for retirement. Drawing on his experience, Mr Bagg has spoken on different panels regarding investing and has written numerous due diligence reports and white papers in this area.

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