Another new pot stock began trading on one of Canada’s lesser-known exchanges on Monday. Columbia Care Inc. (NEO:CCHW) launched on the NEO exchange, becoming the first cannabis company to list on the exchange with a market capitalization of more than a billion dollars.
The Company has dispensaries in several U.S. States. Back in December, Columbia Care received the green light from New Jersey to dispense medical marijuana in that State as well, being one of just six applicants that were selected by the New Jersey Department of Health. With four dispensaries already setup in New York and New Jersey on the horizon, there could be significant opportunities for Columbia Care in what could be some of the hottest markets in the country, especially with both States showing an interest in legalizing recreational cannabis use.
It’s one of the reasons that Canopy Growth Corp (NYSE:CGC)(TSX:WEED) is planning to setup operations in New York after receiving a license to sell hemp. The size of the market could be tremendous. However, with Columbia Care already having a big footprint in the U.S., it’s more than a few steps ahead of any new entrants. And with a management team that has professionals from a variety of different specialties, it gives The Company strong leadership it needs to guide it through a very tumultuous and rapidly-changing environment.
Why the NEO exchange?
The Canadian Securities Exchange (CSE) has long been the preferred choice of U.S. cannabis stocks looking for financing. MedMen Enterprises Inc (CSE:MMEN) and Curaleaf Holdings Inc (CSE:CURA) are some of the big names that have chosen to list on that exchange. And so it’s a little surprising to see that Columbia Care would opt for the NEO exchange.
The big difference for Columbia Care: it would be easier to go from the NEO to the NYSE or NASDAQ than it would from the CSE. With tighter requirements, the NEO means a smaller gap between those exchanges.
– Nicholas Vita, CEO of Columbia Care
Although The Company has a vision of being on the main U.S. exchange, it might take some time before that door even opens. Thus far, it’s only been hemp that’s been legalized in the U.S. and CBD and THC are still nowhere in sight. However, the listing gives Columbia Care lots of time to build up a reputation on the NEO exchange that it hopes will make it easier when the day comes to make the jump.
It’s hard to tell how much of a gap there is since U.S. cannabis companies are still on the CSE and are not able to make a move to a major exchange just yet.
More listings coming?
According to Jos Schmitt, CEO of the NEO exchange, there are more listings headed for the NEO in what he calls a “very solid pipeline,” which includes more cannabis stocks as well.
