THEY DON’T WANT TO GET IN THE WAY OF CANADIAN COMMERCE, BUT ... IN THE U.S., FEDERALLY, IT’S A NO-NO.

That allegation isn’t true, Kee of TMX said.

“Ensuring compliance with TMX’s published rules and policies across our broad issuer base is an integral, ongoing function we perform and each issuer is handled on a fact-specific basis,” she said.

In the meantime, competitor Canadian Securities Exchange has become a haven for tiny, unlicensed Canadian companies as well as U.S.-based corporations barred from selling shares in their domestic markets.

TMX is signalling it has “deep concerns” about listing companies with U.S. exposure and is reviewing eligibility for listing, said Canadian Securities Exchange CEO Richard Carleton. Marijuana companies with U.S. investments already make extensive disclosures on their operations and any move to restrict or prevent companies from listing will be a disappointment to investors, he said.

Officials with Canadian Securities Administrators, an umbrella organization for provincial and territorial regulators, are currently discussing these issues with the exchanges, Ontario Securities Commission spokeswoman Kristen Rose said in an email.

Some Canadian companies would rather stay out of the U.S. than take the legality risks associated with the market.

Institutional investors should be able to feel confident that funds from Canadian marijuana operations are not going toward illegal activities, and disclosing U.S. operations in a prospectus is not a sufficient way “to explain away breaking a law,” said Bruce Linton, the CEO of pot producer Canopy Growth Corp. The company isn’t pursuing any U.S. investments, he said.

“If there’s a doubt, err on the side of clarity,” Linton said.

A new TMX policy would give licensed producers clarity on how to proceed for the number of companies that are considering expansion in the U.S. or embarking on deals with brands that produce infused products in states such as Colorado and Washington, Aphria’s Neufeld said.

In TMX’s review, the company is examining both companies that are directly investing in U.S. marijuana production and those that have more passive investments, such as marketing agreements, Neufeld said.

“I just hope when the new policy comes down it’s not punitive to my shareholders,” Neufeld said by phone. “We feel very, very confident what we’ve done is all legal in the concept of Canadian law.”