As a means to avoid legal challenges in the US, another Canadian based but US-focused cannabis operator began trading its common stock on the Canadian Securities Exchange on Wednesday (March 14).

Cannex Capital Holdings (CSE:CNNX) is a cannabis operator focused on the US market. The company’s most valuable asset is a Washington State producer, through agreements with Superior Gardens, operating as Northwest Cannabis Solutions.


“A CSE listing will allow us to build a strong public shareholder base and more effectively pursue a number of near-term significant growth opportunities,” Anthony Dutton, CEO of Cannex Holdings said in the statement.

On its first day of trading on the CSE, Cannex’s share price closed at $1.34. According to the exchange, the total number of outstanding shares does not include 96,521,733 “Class A” convertible restricted voting shares.

According to numbers from 502 Data, Northwest Cannabis Solutions saw $2,586,680 in sales during January, earning the top processor spot by an $848,527 margin, compared to the second highest company Smokey Point Productions.

Beacon Securities analyst Vahan Ajamian told Bloomberg Cannex has the “highest trailing revenue” of any US focused cannabis companies in the public market. He also revealed the company raised $48 million as part of a financing deal.

US operations in the cannabis space come with risks in the public market

Companies operating in the US raising capital in Canada have faced questions on the risk involved in investing in a market that in a federal sense remains illegal.

“I think there is more opportunity for the CSE-listed companies than people sometimes give them credit for,” John Medland, partner with Blair Franklin Capital Partners, said during a panel at the Lift Cannabis Expo in Vancouver earlier this year.

Medland later told INN he doesn’t see expect the worst case scenario to become true in the US cannabis market. He said the opportunities are too big for the law to shut down the legalization path for marijuana.

“The Canadian public markets offer access to a lot of capital, with a lot of certainty and a lot of speed, and there is this appetite among global investors to invest in a U.S. play,” MedMen CEO and co-founder Adam Bierman told CNBC.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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