FILE PHOTO – A TMX Group sign, the company that runs the Toronto Stock Exchange (TSX), is seen in Toronto, June 23, 2014. REUTERS/Mark Blinch/File Photo
October 16, 2017
By Alastair Sharp
TORONTO (Reuters) – Canada’s TMX Group Ltd <X.TO>, operator of the Toronto Stock Exchange, said on Monday that it may move to delist stocks of marijuana companies with interests in the United States, where their operations are illegal under U.S. federal law.
TMX disclosed its plans as Canadian securities regulators tightened up rules requiring firms to disclose their operations in the United States.
The regulators did not prohibit marijuana firms with U.S. ties from listing in Canada, however, and that left the door open for those not welcome by TMX to move to other exchanges.
Canada has an established medical marijuana industry and is moving toward full legalization by mid-2018.
TMX said it will begin a review of cannabis-related companies listed on its exchanges by the end of the year to determine whether they have operations that break U.S. laws, which would violate TMX listing standards.
“There may be issuers on our markets that are not in compliance with our requirements,” TMX’s head of capital formation for equity markets, Ungad Chadda, told reporters.
About 25 companies are listed on TMX exchanges that cultivate, distribute and possess marijuana, while others provide ancillary services to the cannabis industry, Chadda said.
The smaller Canadian Securities Exchange has said it would welcome such firms and has already begun to recruit them.
CSE Chief Executive Richard Carleton told Reuters that 12 of 50 marijuana-related companies listed on his exchange have interests in the United States.
(Reporting by Alastair Sharp, additional reporting by Leah Schnurr in Ottawa; editing by Jim Finkle and Tom Brown)