Start the conversation
We've talked about some of the unique challenges facing legitimate U.S.-based cannabis companies - challenges that come from its illegal status at the federal level.
Banking is one challenge; marijuana firms in the states have an incredibly difficult time accessing those services for fear of running afoul of Uncle Sam's money laundering statutes.
Achieving a listing on the Nasdaq or New York Stock Exchange is another problem, and one with even more of an impact on investors. It effectively cuts off the company and its shareholders from the $20 trillion in capital that trades in the "big leagues."
Most American marijuana firms have to offer shares "on the pink sheets," in the smaller, markedly less liquid over-the-counter (OTC) markets.
The other day, I showed you one U.S. cannabis company that took an ingenious "shortcut" route through a wall of red tape to list on the Nasdaq; it's the dawn of what I called a "$20 trillion tomorrow."
That tomorrow may come sooner than anyone realizes - because another American marijuana firm is making a play for its Nasdaq listing.
Here's what you need to know...
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
What to Do When a Firm Makes the Big Leap
KushCo Holdings Inc. (OTCMKTS: KSHB), a California-based company, is trying to make an important move and get listed.
Interestingly, KushCo doesn't touch the plant. Instead, it provides packaging, containment, and other "ancillary" services to the cannabis industry.
THREE STATES just legalized marijuana, and these three stocks could potentially see a 1,000% boost. Click here to learn more...
That's a good strategy to get in on the big-money action.
For the folks who run the Nasdaq, KushCo seems like it should be less of a risk than, say, a U.S. cannabis grower.
But if you own KushCo, you're probably wondering what's going to happen when the shares move from OTC to the Nasdaq.
The long and short answer is: nothing. Just sit back and watch the returns come in. You'll still own the same amount of shares, and the shares will trade as normal.
But the move, for KushCo and the U.S. cannabis sector, is pretty significant.
Listing on the Nasdaq and NYSE can drive share prices higher for a very specific reason...
Bigger Markets, More Eyeballs, and More Money
Listing on the NYSE or Nasdaq means more prestige, more interest in your company, and more legitimacy.
In other words, more investors notice - especially institutional ones.
LEGAL WAVE: Barriers to marijuana could be tumbling in Mexico and Thailand, but it's here in the U.S. where legalization could spark a "Green Rush" in certain stocks. Click here to learn about three of them...
When a stock gets trades over the counter, big investors are often unwilling or unable to buy it; OTC stocks don't have the liquidity people like hedge fund executives need to see.
Mutual funds and pension funds also avoid lower-level exchanges for the same reason.
By that, I mean it's harder for a hedge fund to place an order for millions of shares at a price it wants, and it's even harder to get out of a position, because there just aren't enough buyers.
So, we might not have $2 billion to play with, but as individual cannabis investors, we have infinitely more flexibility with the kinds of marijuana companies we want to own; the trades we want can and do get filled in the time frame we want for the price we want.
Still, a stock price without big institutional investors can be volatile. That's why you don't see shares of, say, Procter & Gamble Co. (NYSE: PG) experiencing wild, 20% price swings in a single day.
The Vanguard Group, an investment management firm with $5.3 trillion in assets under management as of September 2018, owns 214 million shares of Procter & Gamble, so its price generally moves rather insignificantly.
And that's what I mean about prices being stable. With so many shares, you know Vanguard isn't going to make any rash decisions. Even if, say, thousands of retail investors panicked for some reason and moved to sell their PG shares, it wouldn't hold a candle to Vanguard's position.
This is starting to become true in the broader cannabis sector; institutional investors are creating stability. The Church Commissioners for England, which manages the assets of the Anglican Church of England, is (after very careful consideration) investing some of its £8.3 billion ($10.3 billion) in cash and equivalents in the medical cannabis sector.
So the dominoes are falling. The "magic moment" will be when institutions like the California Public Employees' Retirement System, the State of Wisconsin Investment Board, and Goldman Sachs Asset Management start putting billions into cannabis stocks.
Imagine how much more the shares you own today will be worth when these mammoth institutions want to own what you already have...
America's Green Gold Rush Is Just Getting Started - Claim Your Stake Now
At this very moment, big investment firms and members of the Fortune 500 are building enormous war chests.
They're preparing to push billions upon billions of dollars into the cannabis market - and they could strike at any moment. So right here - right now - you have a once-in-a-lifetime opportunity to beat them to the punch and stake your claim.
About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.