Cannabis stocks finally go green thanks to TerrAscend
Cannabis investors have been mired in a bear market for almost two years as stocks plunged as much as 90%.
Now it seems TerrAscend’s (OTC: TSNDF) uplisting to the Toronto Stock Exchange (TSX) was the catalyst needed to bump stocks higher. However, it wasn’t the uplisting itself that prompted stocks higher, it was the action by Morgan Stanley that kicked off the buying.
TerrAscend CEO Jason Wild tweeted out that Morgan Stanley (NYSE: MS) removed blocks and restrictions on the company’s stock. Morgan Stanley’s message said that TerrAscend was identified as a “permissible” stock and was removed from the restricted list. This means investors can trade TerrAscend stock like any other on the TSX.
While the company had to restructure its U.S. holdings in order to make the move, it is still essentially the only U.S. multi-state operator available to buy on Morgan’s trading platform.
Stock Moves
The AdvisorsShares Pure US Cannabis ETF rose 3.7% on Thursday following the news. At roughly 2 pm, the buying began and brought the group higher. TerrAscend stock jumped by 2.5% on the news to lately sell at $1.71. While it has a ways to go to return to its 52-week high of $3.09, it has moved further away from the year low of $1.00.
Still year-to-date, TerrAscend stock is up 51.3%, while the S&P/TSX Composite is up 4.6% according to Yahoo Finance.
Wild went on to add that he expects more firms to pull TerrAscend’s stock off the restricted list.
Another benefit from the uplisting is that TerrAscend could potentially end up on an American exchange as an ADR (American Depository Receipt). These instruments are used to trade with foreign companies in the U.S.
Wild has also said that the uplisting is expected to unlock international institutional capital which had been either reluctant or unable to work with companies on the Canadian Stock Exchange (CSE).
More To Come
Several other cannabis companies have been watching these moves closely and have said they may try to mimic TerrAscend’s move. Not all of them can restructure in the necessary way to uplist but no doubt several will try.
Wild also said recently on a Twitter space with The Dales Report that he has quit trying to pin hopes on positive legislative moves in the U.S. saying he operates on the premise that nothing will happen.
