Cannabis Investors: Which Is the Best Exchange for Pot Stocks?

Knowing which pot stock to invest in can be a bit difficult these days. There are many to choose from and even determining which exchange you should be focusing on depends a lot on your strategy. Below, I’ll look at the various exchanges in Canada that pot stocks trade on and assess which one is the best option for cannabis investors today.

The TSX and the TSX Venture Exchange are the two of the most popular options in Canada. Home to Aurora Cannabis Inc  (TSX:ACB)(NYSE:ACB) and other popular Canadian pot stocks, these two exchanges will certainly have the most options for investors to choose from. A stock like Aurora is certainly a well-established brand with strong market share in Canada and has worked on gaining a footprint in two dozen countries around the world.

Aurora has undertaken an aggressive strategy when it comes to expansion, and it’s a great stock for cannabis investors who are looking at the opportunities in the global market, rather than just the domestic one. It’s one of the largest cannabis stocks in terms of market cap thanks to the company being able to tap into two of the biggest exchanges in North America: the TSX and the NYSE.

Being on the big exchanges helps Aurora get in front of big investors and attract a lot of investment dollars. And while that has helped Aurora, It’s also hurt it. The TSX has made it clear that investing in U.S. cannabis companies or operating in the industry south of the border is off limits, even in states where it marijuana is legal.

Since it’s prohibited federally, a company would not be in compliance with U.S. laws and therefore run the risk of being delisted from the TSX and NYSE as well. While hemp has been permitted, products high in THC or CBD that isn’t derived from hemp are still a no-no for these companies.

That’s a big disadvantage when you consider that U.S. companies are listed on both the NEO and Canadian Securities Exchange (CSE) and are growing every day. A company like Trulieve Cannabis Corp has been dominating south of the border and MedMen Enterprises Inc has also made quite a name for itself.

As more U.S. states begin to legalize pot in the U.S., these companies can look at expanding their presence across the country. Since they are listed on the more lax CSE, they wouldn’t have to worry about running into issues that a stock like Aurora would encounter on the TSX.

There is also the NEO Exchange, which has been getting some new pot listings lately; companies think it’s closer in requirements to the TSX than the CSE. However, it doesn’t have many options for cannabis investors just yet.

Bottom line

If you’re looking for a big, established Canadian company to invest in, then either of the TSX exchanges would be good options for you to find a good pot stock. However, if you’re looking for a company that can benefit from the growth in the U.S., the CSE that will likely be more of what you’re looking for, and to a lesser extent, the NEO exchange.

You might be missing out on one of the biggest opportunities in Canadian investing history…

Marijuana was legalized across Canada on October 17th, and a little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

Besides making key partnerships with Facebook and Amazon, they’ve just made a game-changing deal with the Ontario government.

One grassroots Canadian company has already begun introducing this technology to the market – which is why legendary Canadian investor Iain Butler thinks they have a leg up on Amazon in this once-in-a-generation tech race.

This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.

Learn More About This TSX Stock Now

More reading

Fool contributor David Jagielski has no position in any of the stocks mentioned.

Source: The Fool
Cannabis Investors: Which Is the Best Exchange for Pot Stocks?
The Fool

The Motley Fool
Contributor for
The Motley Fool is dedicated to helping the world invest — better. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, mutual funds, and premium investing services.

In all we do, we take a different approach.

We believe – and have proven over decades – that the individual investor can beat the market.

We believe that anyone can do it, even if they don’t have a lot of time or money to devote to investing.

We believe in a long-term outlook, helping people build wealth over time.

We believe that the person best positioned to take care of your financial future is you.

And we work tirelessly on behalf of our hundreds of thousands of members who are enjoying the opportunities that come with having enough money to do the things that matter to them.

While we are headquartered in Alexandria, Va., The Motley Fool advocates for the individual investor around the globe with offices in the UK, Australia, Canada, Singapore, and Germany.

Related posts