CanadaNewsStock NewsStocksUSJushi Holdings Launches on Canada’s NEO Exchange

The American multi-state cannabis operator will be the third U.S. marijuana firm in the past month to go public on Canada's newest stock market exchange.
David Jagielski David JagielskiJune 10, 20196 min

American multi-state cannabis operator Jushi Holdings Inc. will make its debut on the NEO Exchange on Monday under the symbol NEO:JUSH, making it the third U.S. marijuana firm in the past month to go public on Canada’s newest stock market exchange.

The Toronto-based NEO Exchange also launched a new ETF for U.S.-based pot stocks back in April, which was followed by U.S. cannabis operator Columbia Care Inc. being added later in the month. And a few weeks back, AYR Strategies also started trading on the NEO as well.

At a market cap of about CAD$490 million, Jushi is a fairly small, unknown company in the industry. But it does operate in six U.S. states including California and New York where it has hemp operations, according to its website. The U.S. cannabis company also recently announced expansion into Europe as it looks to take advantage of the growing demand for medical marijuana around the world. Jushi listed on the NEO through a reverse takeover of Tanzania Minerals Corp, being renamed shortly afterward.

Jushi calls its MEND brand a “top-quality medical brand cannabis,” a key part of its long-term growth strategy, according to the company. Medical Director Dr. Laszlo Mechtler was added by the company hoping his vast experience in medicine will add credibility to the brand and become a key to its development.

Jushi wastes little time in acquiring assets

The same day Jushi announced it would join the NEO Exchange, it reported it would be purchasing intellectual property and acquiring an operations team for US$4.1 million in cash and US$5.9 million in shares. It’s a move that Jushi sees as necessary for its long-term success:

“This intellectual property acquisition is a crucial part of our company’s growth. Additionally, we acquired a team of expert operators who will build our best-in-class cultivation, processing and retail processes and facilities. This team is also experienced in acquiring competitive licenses; and will drive our entry into new markets. Max and his team have built extraordinary capabilities in cannabis and we are thrilled to welcome them to Jushi.”

Jim Cacioppo, CEO and Chairman of Jushi

Despite Jushi’s size, it has made some other industry connections with a royalty agreement in place with OrganiGram Holdings Inc. (NASDAQ:OGI)(TSX-V:OGI). However, it may take more mergers and acquisitions to put the stock on the map with investors.

Speed a big motivator for U.S. pot firms choosing the NEO

Jushi was looking at both NEO and the Canadian Securities Exchange (CSE), which is home to many U.S. pot stocks, when deciding where to list. But the reason it chose NEO was pretty simple:

“We had discussions with both NEO and the CSE. What I can say is, the CSE was just not able to give us a delineated timeline that we needed to become public quickly. We did not want to wait.”

– Erich Mauff, Co-founder and President of Jushi

Both the CSE and NEO are appealing options for cannabis companies based out of the U.S. to attain liquidity for make acquisitions. And with the NEO the faster route, and having some notable listings over the past few months, it could attract more companies down the road. Without federal legislation permitting cannabis federally in the U.S., the Toronto Stock Exchange remains off limits for companies that could be technically operating in violation of U.S. laws.

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