The historic year for marijuana stocks marches on. While you’re probably familiar with the biggest event of the year — the legalization of recreational cannabis in Canada — a lot more history has been made than just this occurrence.
For instance, Vermont became the first U.S. state to legalize adult-use marijuana entirely through the legislative process in January (i.e., without putting the measure to a vote of state residents). We also saw GW Pharmaceuticals becoming the first drug developer to get a cannabis-derived therapy approved by the U.S. Food and Drug Administration on June 25. This cannabidiol-based oral solution known as Epidiolex also received the lowest possible classification (Schedule V) for a controlled substance, per the U.S. Drug Enforcement Agency.
Uplisting to reputable U.S. exchanges has become the “next big thing”
However, what’s quietly become one of the biggest trends this year is pot stocks that have uplisted from the over-the-counter (OTC) exchange to more reputable U.S. or Canadian exchanges.
Why uplist? While the OTC exchange has done an admirable job of boosting reporting and listing standards, they’re still not as strict as, say, the New York Stock Exchange (NYSE) or Nasdaq.
Perhaps more important, not all financial institutions will invest in companies that trade on the OTC exchange. This limits trade volume, analyst coverage, and potentially even interest in marijuana stocks. By moving from the OTC exchange to a more prominent exchange, these companies are demonstrating that the cannabis industry is a legitimate business model, and that they meet the requirements for listing right alongside time-tested businesses.