New York, NY— On February 27th, the Cronos Group Inc., a major Canadian medical marijuana producer, began trading on the NASDAQ exchange under the ticker symbol “CRON” — making it the first cannabis company to attain a listing on any major U.S. stock exchange.
“It’s very significant for the company and the whole industry,” said Mike Gorenstein, Cronos founder and CEO, according to Bloomberg. “It’s a huge moment— just shows the stigma is continuing to erode on cannabis.”
The Toronto-based Cronos Group, which is listed in Canada on the TSX Venture Exchange, is the first company that produces and sells marijuana to be approved for trading on Wall Street, although other businesses with indirect ties to cannabis are traded.
“We’re the only pure play marijuana company” to be traded on a U.S. exchange, Gorenstein told CNN.
The listing was seen by some analysts as a milestone for the entire marijuana industry.
“The fact that Cronos was able to have its application approved speaks volumes regarding the company’s governance and the ability of its management team to think outside the box and execute,” said Beacon Securities’ analyst Vahan Ajamian in a note to investors.
“We imagine the SEC would have gone through a very thorough review/vetting process before allowing a cannabis company to list on a major U.S. exchange,” he wrote.
The process to gain a listing however, was long and arduous, Gorenstein told VICE Money.
“It’s complicated and intense because of their securities rules. We started building a relationship with the NASDAQ sometime last year, and we had to go through many audits and reviews by different independent committees to make sure that our governance was up to snuff,” he said.
Gorenstein added, “It’s more than just getting on the exchange. We wanted to be the first company that went about this the right way.”
According to a report by Investopedia:
Cronos has an edge over many of these small startups in that it serves an international market. It ships its products to Germany, is building a facility in Israel and has a license through a joint venture in Australia. So far, it does not have a presence in the U.S. because of legal issues.
CNN Money reports that Canada is expected to legalize the retail sale of recreational marijuana in August. Gorenstein said his company will begin producing recreational cannabis for the Canadian market once legalized.
In the U.S. recreational marijuana has been legalized in 9 states and in Washington, D.C., while medical marijuana is legal in 30 states. The U.S. federal government continues to maintain prohibition of cannabis, denoting it as a Schedule 1 controlled substance with no known medical usage, thus companies like Cronos maintaining a holding pattern on the U.S. market until federal legality is established.