Trulieve Cannabis has become the first US cannabis company with direct operations in the industry to reach the New York Stock Exchange. According to Business of Cannabis, the move is now being closely watched by several other major players preparing to reach the NYSE or Nasdaq if regulatory conditions improve.
Trulieve had already been trading as TCNNF on OTCQX and began trading as TRLV on the NYSE on June 10. The article describes this as a historic shift for the US cannabis industry, where companies have long been shut out of the largest trading venues because cannabis has remained subject to federal restrictions.
More large cannabis companies are waiting for the next federal signal
According to the article, additional large North American cannabis companies are preparing through reverse stock splits, restructurings, shareholder votes and contact with investment banks. But many are still waiting for the outcome of the upcoming ALJ hearing, which could prove decisive for whether cannabis is moved from Schedule I to Schedule III in the United States on the basis of accepted medical use.
If that happens, companies could find it easier to separate federally compatible medical and international operations from adult-use businesses that remain legal only at the state level. That, in turn, could improve their chances of qualifying for listings on larger U.S. exchanges.
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Todd Harrison points to three decisive factors for the sector
Todd Harrison, founder of investment firm CB1 Capital, told Business of Cannabis that a stock exchange listing alone is not enough to attract larger institutional investors. Instead, he highlights three decisive factors: growth, regulatory parity and tax clarity.
The article describes the last point as especially important. Tax rule 280E has for a long time weighed heavily on US cannabis companies. Jonathan Havens, a partner at Saul Ewing LLP, is quoted as saying that some companies have in practice faced a very heavy tax burden, something that has affected both profitability and balance sheets.
Trulieve is reported in its latest figures to have recorded $696 million in uncertain tax liabilities linked to years of taxation under 280E. A future rescheduling could therefore have major significance for how the sector’s finances are valued.
Glass House Brands is highlighted as the next possible candidate
The article also mentions Glass House Brands as a possible next candidate for a larger US stock exchange listing. The company currently trades as GLASF on OTCQX, and according to Business of Cannabis it has already applied for a listing on the NYSE after a restructuring similar to the one used by Trulieve.
Harrison also points to Glass House as a company that could move faster than many others in the sector. In the same context, other major cannabis players followed by the market are also mentioned, although the article mainly stays with Trulieve and Glass House as the clearest examples.
A larger stock exchange listing is not enough if the sector does not become investable
The article concludes that a listing on the NYSE or Nasdaq does not automatically change the conditions for US cannabis companies. For the sector to truly become attractive to institutional capital, clearer rules, better tax conditions and proof of sustainable growth are also required.
Business of Cannabis therefore describes the steps taken by Trulieve and Glass House Brands as important symbols of where the market is heading, but at the same time as examples that investors are still waiting for greater clarity before capital can seriously flow into the sector.
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