Hey Investors, Canada's SEC Unveils New Senior Listing Tier For US Cannabis Companies

The Canadian Securities Exchange (CSE) announced a new senior tier that could benefit US cannabis companies by offering them a broader investor base and lower capital costs.

The new tier will include 108 companies, 39 of which are marijuana businesses. By being on the senior tier, members will be eligible for reduced margins through the Investment Regulatory Organization of Canada (IIROC), reported The Global And Mail.

The move is intended to help the CSE compete with other exchanges such as the Toronto Stock Exchange (TSX), TSX-V and the NEO Exchange.

“The ultimate object of the exercise here is to ensure that senior companies receive a lower cost of capital,” CSE CEO Richard Carleton said. “Just as it is a lower cost of capital for companies listed on the Toronto Stock Exchange than it is for companies listed on the TSX Venture, we will be tracking very carefully whether companies on our senior tier are in fact rewarded with a lower cost of capital versus companies that are on the regular CSE market.”

The plan has been in development for three years and companies in the senior tier will be monitored to ensure they receive a lower cost of capital than those on the regular CSE market. TerrAscend Corp. TRSSF and Curaleaf Holdings Inc CURLF, which currently list on the CSE, have expressed interest in uplisting to the TSX.

Starting in May, the CSE will audit the financial statements of each issuer that wishes to qualify for the exchange's new senior tier.

To meet the standards, issuers need to satisfy one of four criteria, which include shareholder equity of $5 million, net income of $400,000 or more, a market value of all securities to be at least $50 million and total assets and revenues of $50 million each in the most recent fiscal year, reported MjBizDaily.

Additionally, Canada's Health Department plans to reduce regulations in response to multiple bankruptcies of cannabis companies.

If you are interested in cannabis stocks, multiple different types are available. How you invest may vary depending on the exchange your investment of choice trades on.

Want To Know More? Join us at the Benzinga Cannabis Capital Conference on April 11-12. This is the place where DEALS GET DONE, where money is raised, M&A conversations start and companies meet investors and key partners. Don’t miss out. Secure your tickets now before prices go up.

Photo: Courtesy Of Markus Spiske On Unsplash