Marijuana Company Cronos Becomes First Listed on US Stock Exchange
Marijuana is still not legal according to the federal government, but that is not stopping Wall Street. The Canadian-based marijuana producer Cronos became the first company directly involved in the marijuana industry to be listed on the US stock exchange this week, launching on Nasdaq on Tuesday.
While several other companies with indirect connections to cannabis have been trading for months, Cronos is the “only pure play marijuana company” listed on the exchange, boasts Cronos CEO, Mike Gorenstein.
Their presence on Nasdaq is a milestone for the company, as well as the greater industry they are helping to bring into the mainstream. To get where they are, Cronos had to meet approval with the US Securities Exchange Commission. Vahan Ajamian, an analyst for Beacon Securities, says Cronos most likely passed the test because it only operates in countries that do not have a federal ban on marijuana.
These countries include Canada, Germany, Australia, and Israel. Cronos exports marijuana from Canada to Germany and plans to establish cultivation facilities in both Israel and Australia. Cronos also intends to produce recreational marijuana in Canada, if it is legalized this August.
Cronos stock jumped 10 percent on the Toronto exchange on Monday ahead of its introduction on Nasdaq. Shares fell 2 percent before the end of its first day on the US exchange. Experts say this kind of volatility is to be expected with any new asset class, but they expect Cronos to stabilize once US investors become aware that a federally legal sector is available for investment.