Investment Landscape

Because cannabis is federally illegal, “plant touching” companies are precluded from listing on major US exchanges (NYSE and NASDAQ). Alternatively, the U.S. Multistate Operators (MSOs) have been able to access the public markets by listing on the Canadian Stock Exchange (CSE), which is much less restrictive than the NYSE, NASDAQ and Toronto Stock Exchange (TSE) but has a fraction of the trading volume.

U.S. based companies that list on the CSE are subject to International Financial Reporting Standards (IFRS), not U.S. Generally Accepted Accounting Principles (GAAP) which are the standards required by the Securities and Exchange Commission (SEC) for companies listed on the NYSE and NASDAQ.  In anticipation of the inevitable end to cannabis prohibition in the U.S., more US-based investors continue to deploy capital into many of the U.S. MSOs.  The SEC requires filing of audited financial statements, in accordance with GAAP, if more than 50% of the stakeholders are U.S.-based.  As such, many of the U.S. MSOs have made the conversion from IFRS to GAAP.

Please see the COMP TABLE for a listing of individual stocks.