Just weeks after marijuana legalization took a big leap forward in America during this year’s election, the cannabis business is also reaching a major milestone. For the first time in history, a marijuana company is listing on a major stock exchange.
An initial public offering from a company called Innovative Industrial Properties was approved by the New York Stock Exchange. IIP is, according to Forbes, “a real estate investment trust that plans to invest in medical marijuana properties.” The move to have a cannabis company trade on the NYSE is bold and a sign of progress. In fact it might be so bold that it becomes illegal.
Since cannabis is still a controlled substance on a federal level, NYSE could have broken its own rules by allowing a company that trades in illegal product to list on the stock exchange. That fact may explain why MassRoots, the stoner social media platform, was recently rejected an uplisting on the Nasdaq. According to the company’s CEO Isaac Dietrich, the problem there was what he called “risk factors,” the fact that stock exchanges like the Nasdaq and the NYSE could be seen as participating in criminal activity.
“They were a little uncomfortable with that risk factor. They spent six weeks reviewing the application and then told us they were not willing to move forward,” Dietrich told Forbes. “They didn’t want to be a trailblazer.”
It’s unclear what exactly Innovative Industrial Properties did differently that allowed them to succeed where so many other companies failed. IIPR filed for a public offering (Leonardo DiCaprio will explain to you what that is if you don’t already know) on October 17 and was approved by the New York Stock Exchange a month later on November 17. The price to list on the New York Stock Exchange in $100,000, so it doesn’t come cheap. The company projects that will soon be worth over $200 million.
The new ground being broken in high finance by cannabis companies could be really important for the industry. Entrepreneurs in the business have a serious transaction problem, as most banks and credit card companies refuse to do business with cannabis business people. This forces pot shops and producers to use large amounts of cash and to list on the Over The Counter exchange.
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