Green rush blows in direction of Wall St.

Major pot firms taking stock to U.S. markets

TORONTO • With cannabis legal in Canada, some of the country’s major pot companies are looking to ride the green rush to Wall Street.

On Thursday, Leamington, Ont.-based licensed cannabis producer Aphria Inc. submitted its registration to list its shares on the New York Stock Exchange, making it the second major Canadian producer to pursue a listing on the NYSE this month.

Aphria’s bid followed that of Aurora Cannabis, which announced Thursday that its shares will begin trading on the NYSE as of Oct. 23 after receiving approval, and earlier moves to secure U.S. listings by Canopy Growth Corp. and Cronos Group Inc.

B.c.-based Tilray Inc., meanwhile, skipped a Canadian listing altogether and made its initial public offering on the Nasdaq stock exchange in New York in July.

In the cases of Cronos and Tilray, share prices almost immediately skyrocketed, with Tilray surging as high as US$300 in September after listing at just US$17 two months earlier.

According to Paul Rosen, CEO of Tidal Royalty which invests in U.S. cannabis companies, Wall Street not only opens these companies up to a new pool of investors but grants them a chance separate themselves from competitors.

“These companies are in a Texas cage match level of competition among each other,” said Rosen, who is also the former CEO of Cronos. “They’re all following a successful path laid down by others ... to increase their ability to raise capital from multiple sources and ultimately lower their cost of capital, which would be a competitive advantage to their peers who are not able to cross over through the gatekeeper of the U.S. exchange.”

In order to be able to make the move into Wall Street, these companies need to prove with an application that they’re not violating U.S. federal laws, which do not allow cannabis to be imported into the U.S.

More than half of those concerned say their top worries included unforeseen costs, paying too much for their home and rising interest rates.

The Bank of Canada has raised its key interest rate target four times to 1.5 per cent since July 2017. It is widely anticipated that the central bank will announce another hike at its next meeting on Oct. 24.

Some housing markets across the country have already been feeling the cooling effects of higher interest rates coupled with some recently introduced measures like the new mortgage stress test and a 15 per cent foreign buyer tax in Ontario.

Earlier this week, the Canadian Real Estate Association reported that national home sales fell for the first time in five months in September amid weakening markets in Vancouver and Toronto.

Despite prices also flattening, the outlook on the national real estate market remains positive.

The CMHC survey found that 80 per cent of homebuyers polled still believe that buying property is a good long-term financial investment. Sixty-six per cent believed their home value would increase within the next 12 months.

The online survey, which was conducted in April, polled more than 4,000 Canadians who became mortgage consumers in the last year.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error as they are not a random sample and therefore are not necessarily representative of the whole population.