Part of cannabis and investing
The anticipated rush of listings by U.S. cannabis companies has ignited a rivalry between two of Canada’s smaller stock markets as they vie to fill the void created by the Toronto Stock Exchange.
The TMX Group – which owns both the Toronto Stock Exchange and TSX Venture Exchange – has a policy preventing listed companies from operating south of the border, where marijuana remains federally illegal despite having been legalized in more than 30 states.
That’s made the Canadian Securities Exchange, a stock market for upstart companies, the go-to venue for U.S. cannabis companies looking to go public, bolstering both the exchange’s public profile and its listing and trading revenues.
But now, the NEO Exchange has stepped into the fray, eager to grab a slice of what its president and chief executive calls a growing market.
“I can see a lot of potential new entrants emerging in the U.S. and I think that the Canadian marketplace is very well positioned to service them,” said Jos Schmitt, who heads up the NEO Exchange, based in Toronto. When it launched in 2015, it billed itself as a more fair alternative to the TSX because of its use of speed bumps to slow down algorithmic high-frequency trading.
There are 125 marijuana companies listed on the CSE, according to the exchange’s website. The NEO Exchange is home to five cannabis companies, three of which are special-purpose acquisition corporations, vehicles created for the purpose of doing takeovers.
“We have the advantage of being where the peer group is located,” said Richard Carleton, CEO of the Canadian Securities Exchange. And the CSE is continuing to court cannabis