Welcome to our Weekly Cannabis Report, a reliable source for investors to receive the latest developments and critical analysis for the cannabis sector.
Weekly Note to Readers
The bright spot in the cannabis space last week was Cronos Group which became the first Canadian cannabis company to be listed on the Nasdaq. Cronos share price jumped 37% after the listing announcement, a clear demonstration of the benefits of having direct access to the U.S. stock market. Many readers have complained to us the onerous fees and limitations for trading OTC stocks, and we think Cronos' Nasdaq listing will create tangible benefits and attractiveness to U.S. investors. We think the success for Cronos will attract many other Canadian cannabis companies to seek Nasdaq listing.
Canopy Growth said at an event that it will also seek a Nasdaq listing. No timeline was given but Bruce Linton told a group of audience that his company has already started working on a Nasdaq listing, only to be superseded by Cronos. We think U.S. listing would benefit any company immensely by having direct access to the largest stock market in the world. U.S. investors have long been investing in Canadian cannabis companies, and we believe many are happy to hear that these companies are finally coming to Nasdaq. We think Canopy will likely announce its Nasdaq listing in the next few months and share price should benefit from such announcement.
We also highlighted the fallout from Maricann's $70 million after three directors and chief executive was investigated by OSC over suspicious personal trading and other matters. January and February saw a large number of cannabis companies issue equity to take advantage of the hot market. However, Maricann reminds us that management and board governance should become an important due diligence item for investors. Maricann will most likely be shut out of the capital markets in the short term, limiting its growth in this critical period before legalization later this year. Investors should evaluate board and management carefully before investing.
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