Zenabis Global Inc (TSX-V:ZENA) announced on Monday that The Company had received conditional approval to move to the TSX from the Venture Exchange. It’s a big move for Zenabis as it gives The Company added credibility and a bigger pool of potential investors to tap into.
Moving to the main board of one of the largest exchanges in the world is a critical milestone for the Company in terms of demonstrating the strength of our business and expanding our investment appeal to a broader and global audience
– Andrew Grieve, CEO of Zenabis
Since the approval is conditional we don’t have a date as to when Zenabis will move to the TSX. However, The Company describes the remaining conditions as ‘customary’ and something that it “intends to fulfill in the coming weeks.” Zenabis’ ticker symbols, ZENA and ZENA.WT, will remain unchanged.
Why a move to the big exchange is important
With Zenabis moving to a big exchange like the TSX, more investors will be open to adding the stock into their portfolios. Institutional investors, for instance, might have certain restrictions on which companies they can invest into, and venture stocks might be off limits. Venture stocks are typically seen as a bit riskier and for that reason don’t get the same attention that shares of companies listed on the TSX get. It’s also harder to justify putting them into portfolios that might not have a high tolerance for risk.
That’s also why over the past year we’ve seen many Canadian cannabis companies list on the NYSE and NASDAQ. By getting onto the main exchanges, it means access to more investors, and bigger investors as well. The tradeoff, however, is that it means more scrutiny and attention, which can put pressure on small companies that might not have had to deal with that in the past.
Stock has been struggling as of late
Zenabis investors are likely looking for any positive news that could send the stock up in price. In the past month, the stock has fallen by more than 40% and year to date it is down around 70%. With declines like that, it might attract some bargain hunters but we’ve yet to see any upward momentum in the share price. The Company has unfortunately given investors little to get excited about recently, with no growth in its most recent quarter or even profitability. And with so many pot stocks to invest in, it makes it a challenge to attract investors.
The Company did, however, use the opportunity of announcing its move to the TSX to explain to investors some of its key objectives.
Zenabis said in the release that it aims to be “one of the largest licensed producers of medial and adult-use recreational cannabis in Canada” while also looking to grow internationally as well. The Company is also focused on being a low-cost operator while still offering “ultra-premium” cannabis products.
Those are some lofty goals that today look to be very far away. However, they are ambitious and might give investors some hope for the future.