In fact, in another major milestone for this booming niche, it will be the first marijuana stock to be listed on any major U.S. exchange. Toronto-based Cronos Group already trades in Canada on the TSX Venture Exchange. (See also: 10 Canadian Marijuana Stocks for Your Portfolio)
“It’s very significant for the company and the whole industry,” Mike Gorenstein, Cronos founder and chief executive officer, said in an interview with Bloomberg. “It’s a huge moment -- just shows the stigma is continuing to erode on cannabis.”
In what many are dubbing the “green rush,” pot stocks have been soaring as marijuana becomes increasingly legal throughout the U.S. and worldwide. According to data from Arcview Marketing Research, marijuana sales soared 30% to $6.7 billion in 2016. In the next three years, sales are expected to exceed $20.2 billion. (See also: Molson Coors: Legalized Pot May Hurt Beer Sales)
Cronos has an edge over many of these small startups in that it serves an international market. It ships its products to Germany, is building a facility in Israel and has a license through a joint venture in Australia. So far, it does not have a presence in the U.S. because of legal issues.
In the U.S., the federal government has maintained that marijuana is illegal. Yet an increasing number of states are allowing it. Under the Obama administration, the state law took precedence at the local level, but now that is no longer the case. Enforcement of marijuana laws remains uncertain.
So, companies like Cronos are remaining in a holding pattern with U.S. business until the product’s legality is sound.
Still, these companies, which operate legally in their own territories, can benefit from the surging investor interest in the cannabis industry by listing on U.S. exchanges.