Investors Gain Access to U.S. Cannabis Companies with New Public Listing on Canadian Stock Exchange

Article by Sunny Freeman, Financial Post

CannaRoyalty shares began trading publicly in Canada Thursday, giving investors the opportunity to buy stock in American marijuana companies for the first time, something they are forbidden to do south of the border.

The new Ottawa-based company, which holds a portfolio of 18 marijuana companies — 15 of which are in the U.S. — will sell its stock beginning Thursday on the Canadian Securities Exchange using the symbol CRZ. CannaRoyalty had a pre-listing valuation of $150 million, but declined to say what its opening price would be, saying the last private trades were in the range of $4.25 to $4.50 a share.

CEO Marc Lustig said he chose the CSE after pushback from the Toronto Stock Exchange because the company was not a pure medical play.

Medical marijuana is currently the only legal way to sell the product in Canada, but is expected to change, given the federal government’s plans to introduce legislation that would legalize recreational marijuana this spring. Canadian marijuana stocks, including CannaRoyalty investor Aphria, have been on a tear in recent weeks in anticipation of a recreational market.

“A lot of the excitement and the appreciation of the Canadian stocks has been in part because of U.S. money flows that can’t access U.S. listings,” said Lustig.

“I think what CannaRoyalty offers investors is that exposure, in addition to Canada, to U.S. assets.”

For now, CannaRoyalty is also the only option for Canadian investors to gain exposure to the U.S. recreational marijuana market. The company has interests in companies that deal in everything from real estate to devices to skincare products in five states where recreational marijuana use is legal, including California.

Read full article here.

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