TMX Group Ltd. is seeking guidance from Canadian securities regulators as it weighs how to deal with marijuana companies listed in Canada with interests in the United States where the business remains federally illegal.
"This is a complex matter which touches multiple aspects across our capital market system, and as such requires close examination and careful consideration," Toronto-based TMX Group said in a release Thursday. "We are working with regulators to arrive at a solution that will clarify this matter for issuers, investors, participants and the public."
The move seeks to draw a line under policy uncertainty for investors and companies that pits more liberal rules around cannabis cultivation and distribution in Canada against a Trump administration that has taken a harder line.
While TMX has largely shied away from listing marijuana-related companies with U.S. investments or operations on its own Toronto Stock Exchange (TSX) and other venues, it processes all Canadian equity trades via its clearing house, the Canadian Depository for Securities Ltd. (CDS).
That means dealing with a string of marijuana companies that have swarmed to the smaller Canadian Securities Exchange (CSE) to raise funds, often to fund U.S. opportunities.
TSX-listed producer Aphria Inc. also has investments in Arizona and Florida, where medical marijuana is legal. The company was not immediately available to comment.
The head of Canopy Growth Corp., which trades on the TSX, wants TMX to make a decision.
"I've heard since March that they're working vigorously on this. So you can imagine I'm finding it less exciting to read that headline," Canopy Growth CEO Bruce Linton told CBC News.
Linton said the issue affects his company even though it doesn't have U.S. investments because it affects Canopy Growth's ability to secure investments from American institutional investors.
"They won't invest in Canada in cannabis until the rules are clear and applied," he said.