TerrAscend Corp. applied to list its shares on the Toronto Stock Exchange (TSX), which would represent a step up to a larger exchange for the marijuana multistate operator.
A TSX listing for TerrAscend “would be the first major stock-market membership for a U.S. multistate operator,” according to Bloomberg News.
TerrAscend has offices in New York and Toronto.
The company’s shares already trade in Canada on the Canadian Securities Exchange (TER) and on the U.S. over-the-counter markets (TRSSF).
Several other American cannabis MSOs are also listed on the Canadian Securities Exchange, but the TSX could offer benefits such as more liquidity and better access to institutional investors.
“We believe that we will qualify for the listing, and the TSX is a major exchange that will bring a lot more liquidity to our listing,” TerrAscend Executive Chair Jason Wild told Bloomberg.
“The liquidity is sorely needed and doesn’t really exist right now for operators like us.”
Meeting TSX listing requirements necessitates an “internal reorganization” that needs shareholder approval, TerrAscend said in a Tuesday news release.
“We believe this reorganization involves having a holding company – which is also the listing vehicle – that is a non-U.S. cannabis company, or a U.S. company that is non-cannabis (or non-THC),” Owen Bennett, an equity analyst for New York-based investment bank Jefferies Group, wrote in a Tuesday research note.
“This is then ring-fenced from the U.S. assets that are held in a separate company, but for which – similar to the Canopy (Growth) proposed structure – the holding company has non-voting shares.”
Bennett expects other American marijuana MSOs will likely follow TerrAscend’s move, “or those that don’t would be doing a disservice to shareholders as they would be at a competitive disadvantage to those that do.”
TerrAscend operates in California, Maryland, Michigan, New Jersey and Pennsylvania as well as in Canada.