The American Trade Association for Cannabis and Hemp (ATACH) released a paper this week arguing that the major stock exchanges — including the New York Stock Exchange (NYSE) and Nasdaq – should include cannabis operators.
The paper – done by ATACHʻs Capital Markets Council, with help from the law firm Duane Morris – cites several reasons cannabis operators should be listed on the exchanges. Among them, they cite the federal government’s “hands off” policy to state-legal cannabis, the
growth of the state-legal cannabis industry in the United States, and the fact that Nasdaq and the NYSE already list companies with material cannabis-related interest. In addition, the paper states that cannabis operators already function in environments of compliance and transparency that is greater than listed companies in other industries.
“There is a clear legal pathway for U.S. Exchanges to list plant-touching cannabis operators that is consistent with listings that have already occurred. Now is an ideal time and opportunity for the NYSE and Nasdaq to host strong plant-touching cannabis businesses, backed by the legal framework we have presented,” Emily Paxhia, ATACH Capital Markets co-chair and CEO of Poseidon Asset Management, said.
The cannabis industry is among the fastest-growing industries in the United States, with revenues of U.S. cannabis sales projected to exceed $30 billion in 2022 and $50 billion in 2026. Further, the U.S. cannabis market has created more than 500,000 jobs and is projected to create more than 800,000 jobs by 2026, the paper stated.
“Not only is access to capital blocked for U.S. businesses but also the international marketplace puts United States companies and investors at a disadvantage in what is estimated to be a nearly $100 billion U.S. cannabis market – essentially ceding its ability to compete. Fortunately, there is an opportunity to change course, and it can start in the U.S. capital markets,” ATACH President Michael Bronstein said.
It also found that the overall economic impact of the U.S. cannabis market is estimated at nearly $100 billion and could be near $160 billion by 2026.
“Now is the time for plant-touching operators to be listed by major exchanges, and today we have laid the groundwork for that discussion. The very operators that grow, process, and dispense cannabis are not being subjected to federal enforcement where their cannabis activities comply with state law. This decade-long policy has allowed for the multi-billion-dollar U.S. cannabis industry. Nasdaq and NYSE are already listing companies who are facilitating trading in plant-touching operators or whose businesses are dependent on such operators. Having crossed the rubicon, it is time to talk about listing plant-touching operators,” Seth Goldberg, partner and cannabis industry group co-team lead at Duane Morris, said.