US marijuana companies are the latest prize in the so-called “listing wars” between the top two US stock markets, the New York Stock Exchange and Nasdaq, On The Money has learned.
The heightened interest in IPOs for Pot Inc., comes after federal barriers that have long blocked access to banking services are beginning to topple. In December, a Trump executive order moved weed to a Schedule 3 controlled substance, meaning it’s no longer on par with heroin and can be used for medicinal purposes. Then came the April codification of the EO by the DOJ and the DEA into law.
The upshot: US pot companies that have long been denied banking services — because they are regulated on the federal level despite vast state legalization — can access capital markets as long as they register with the DEA as a medical company.
The other upshot: A scramble between the NYSE and the Nasdaq is heating up to list US pot companies that were long denied access. The $50 billion industry is expected to grow to nearly $100 billion annually by 2030 as exchanges vie for their listings and their investor base opens up to major institutions.
The NYSE has taken the early lead in the marijuana race. Glass House Brands of Long Beach, Calif., which grows weed and manufactures cannabis-related products, officially listed on the NYSE on June 30; executives of the company will be ringing the closing bell at the Big Board on Friday.
A few weeks earlier, the NYSE listed Trulieve, a Jacksonville, Fla., pot operator, but that was after sharp competition between the two exchanges, people there tell me. “In the spring after we had been speaking with NYSE for a few months, Nasdaq approached about listing and highlighted the speed with which their processes could support listing,” a rep from Glass House tells me.
A press official from the NYSE didn’t return a request for comment; a rep for Nasdaq declined comment other than to say there is no “fast track” approvals for listings.
Listings are a key source of revenue for exchanges, even as stocks can technically trade anywhere including so-called dark pools or private trading venues. Major companies seek listings on top US exchanges partly because the imprimatur demonstrates they meet compliance standards.
The major exchanges also promise heightened liquidity for their listed stocks and branding opportunities. Nasdaq has traditionally been the listing venue for Big Tech. We’re talking about Nvidia, Microsoft, Apple and Amazon.
While the New York Stock Exchange dominates among banks, energy and healthcare, both exchanges are engaged in poaching the other’s companies. Nasdaq, for instance, recently convinced Walmart to jump ship from the NYSE, the largest so-called switch in history.
The reasons involve costs (NYSE can cost upwards of $500,000 a year in listing fees; the Nasdaq a little less than half that). But the Nasdaq’s tech-heavy rep also has attracted non-tech companies looking to be lumped in with some of the capital markets’ hottest companies.
A big battle is looming over the listings of AI darlings OpenAI and Anthropic that are expected to go public in the coming months. But Pot Inc., is another battleground now that US companies are no longer totally barred from the markets.
Pot Inc., executives tell On The Money that they believe Trump will soon remove weed from a Schedule III drug used for medicinal purposes to Schedule IV or V, which is de facto legalization meaning the capital markets will be fully open to US pot companies to spend on creating recreational products, such as joints and gummies.