The second largest stock exchange in the United States, Nasdaq, will list its first cannabis shares on Tuesday. This is in spite of U.S. Attorney General Jeff Sessions leading a serious federal crackdown on marijuana.
With more than $6.831 Trillion in market capitalization (2015 figure), Nasdaq will list the Toronto-based Cronos Group Inc. as its first marijuana company, Bloomberg reported.
“It’s very significant for the company and the whole industry,” Mike Gorenstein, Cronos founder, and the chief executive officer said in an interview.
“It’s a huge moment — just shows the stigma is continuing to erode on cannabis.”
Cronos will be traded alongside U.S. giant companies, the likes of Apple Inc., Microsoft Corp., and Starbucks Corp.
After spending six months doing preparatory work, Cronos’s listing in the U.S. will clear up confusion surrounding legal investment, Gorenstein said.
Gorenstein said about one of every three calls and discussions he’s had with U.S. investors concentrated on whether they can legally invest in the Canadian company.
Nine U.S. states and Washington, D.C. have already legalized recreational marijuana, and 29 others have legal medical cannabis. But in January, Sessions rescinded what was known as the Cole Memo, paving the way for the federal government to clamp down on marijuana operations and businesses in these states.
His decision to annul the Cole Memo came after California on Jan. 1 legalized marijuana, becoming the largest U.S. state in doing so.
Fearing the federal government, U.S. banks stopped their services to facilitate marijuana money.
Cronos had worked with Nasdaq, which ranks second as the biggest stock exchange worldwide, to get approval for an over-the-counter listing last year.
The news of Cronos joining Nasdaq pushed its shares up by 11 percent to US$9.83 on Monday. Cronos’s shares going up came after the company’s stock had fallen 7.3 percent this year through Friday’s close.