Canadian company Cronos Group starts trading on the Nasdaq Stock Market today after receiving the United States Securities and Exchange Commission’s approval to do so. It is now the first ever cannabis company to list its shares on a major U.S. stock exchange, alongside American giants like Apple Inc., Starbucks Corp., and Microsoft Corp.
Cronos, which is based in Toronto, said it expects to list its shares under the ticker symbol CRON. The trading of Cronos’ common shares in the U.S. has been elevated to the Nasdaq Global Market from the Nasdaq International Designation program.
“The company’s Nasdaq listing reflects its significant progress when it comes to expanding its global footprint and strengthening its corporate governance.” – Cronos Founder and CEO Mike Gorenstein
Cronos owns and operates cannabis businesses that are licensed to cultivate and sell the drug in Canada, where medical cannabis is legal nationwide and where recreational cannabis is expected to be legalized very soon. These businesses include Peace Naturals Project Inc., which is headquartered in Ontario, and Original BC Ltd., which is in British Colombia. The company already trades on the TSX Venture Exchange in Canada, under the trading symbol MJN.
Huge milestone for cannabis industry
The listing marks a huge milestone for the cannabis industry despite weed remaining illegal at a federal level in the U.S. It is also expected to help in the expansion of the so-called Green Rush, which refers to the thriving cannabis industry in the U.S. and Canada.
According to Cronos’ founder and chief executive officer, Mike Gorenstein, the company’s Nasdaq listing reflects its significant progress when it comes to expanding its global footprint and strengthening its corporate governance. “It is a big moment as it shows that the stigma surrounding cannabis continues to erode.”
Cronos boasts a presence across four continents. So, aside from North America, the company also operates multiple international manufacturing and distribution platforms. Cronos is building a cultivation facility in Israel in partnership with a kibbutz. It has also been granted a cannabis production license in Australia through a joint venture. What’s more, the company has access to more than 12,000 pharmacies in Germany through an exclusive distribution agreement.
Cronos got Nasdaq’s approval six months after the company started with preparatory work, which then led to a filing of an application for listing just this year. Cronos worked with Nasdaq last year to get an approval for an over-the-counter listing.
For Cronos, a U.S. listing could open doors towards getting significant capital. Gorenstein also said that this will help clear up confusion regarding legal investment.
He said that by listing on Nasdaq, Cronos will be able to open up opportunities for American investors that were otherwise uncertain about the legality of cannabis.
How about American cannabis companies?
American cannabis growers have been sidelined and have not made it to any major stock market in the U.S. yet because of the federally illegal status of cannabis in the country.
While there are already states that have legalized medical cannabis and recreational cannabis, the drug is still classified as a Schedule I substance by the U.S. Drug Enforcement Administration. This means that on a federal level, cannabis is considered to have no medical use and with a high potential for abuse.
Cronos Group isn’t the very first business associated with the cannabis industry to list on a U.S. stock exchange. The others that came first are just focused on ancillary products for cannabis growers, such as lighting equipment and fertilizer, or on biotech, which is the development of drugs that are derived from cannabis.
Cronos Group, however, is the first “pure play” marijuana company to be listed.