Reuters — Canadian pot producer Canopy Growth said on Tuesday it would move its U.S. stock listing to the Nasdaq, following rival Aphria in favouring the exchange’s “cost-effectiveness.”
Canopy’s U.S. shares, currently listed on the New York Stock Exchange, rose over four per cent in extended trading.
Years of high expenses and a lack of profitability have soured investor sentiment toward Canadian pot producers, forcing the companies to cut costs aggressively this year by shuttering facilities, laying off employees and resetting portfolios.
The transition to the Nasdaq gives the company greater cost-effectiveness and better access to tools and services to connect with current and future investors, Canopy CEO David Klein said in a statement.
The change also suggests Canopy — whose Canadian retail brands include Tweed and Tokyo Smoke — had a difficult time raising capital on the NYSE, said Avis Bulbulyan, CEO of cannabis consulting firm Siva Enterprises.
“Nasdaq listings are a bit more volatile and used by fast-growth companies such as tech,” Bulbulyan said.
“Considering Canopy hasn’t really been that stable and doesn’t have much to show for their history, they may have a relatively easier time raising money with a Nasdaq listing,” he said.
Canopy’s shares, which fell three per cent this year through Tuesday’s closing bell, will start trading on the Nasdaq under the ticker symbol ‘CGC’ on Nov. 16.
Aphria completed its move to the Nasdaq in June. Among other major Canadian producers with listings in Canada and the U.S., Hexo Corp. and Aurora Cannabis remain NYSE-listed.
Both were warned by the exchange’s operator about a possible delisting earlier this year after their share prices slid below US$1.
Aurora’s shares rose above the threshold after it undertook a reverse stock split, while Hexo has detailed plans to carry out a similar consolidation around December.
— Shariq Khan reports on North America’s resource and energy sectors for Reuters from Bangalore.