The Toronto Stock Exchange is threatening to delist any cannabis companies on its exchange with operations in the United States that face squarely against US federal law.
One of the companies caught in the crosshairs is Aphria Inc, a Canadian licensed producer of cannabis.
The company released a statement in response to the TSX threat characterizing it as “extremely broad.”
"The objective application of such a staff notice by the TSX to any entity engaging in activities related to the cultivation, distribution or possession of marijuana in the U.S. or entities engaging in ancillary services activities may prove to be challenging in determining actual compliance with such guidance," the company said in a statement, according to CBC News.
The company has an investment in Florida, where it has partnered with a company called Liberty Health to bring Aphria-branded products to Floridians. For web visitors based in the United States, typing up their website—aphria.com—brings up that American venture.
That approach is different from those taken by other Canadian licensed producers, some of which have decided not to walk into ventures based in the United States. One such company is Canopy Growth, the Canadian marijuana behemoth that runs licensed producer entities Tweed, Bedrocan and Spectrum Cannabis.
Bruce Linton, the head of the company, told CBC News that “we take our responsibility to our shareholders seriously and as such we have chosen to conduct business in jurisdictions where it is federally legal to do so.”
The warning came as the TSX released a staff notice pronouncing that federal law in the United States takes precedence over state laws. According to the Toronto Star, the Toronto Stock Exchange will be in contact with all companies that “cultivate, distribute or possess marijuana,” or offer services related to the drug in any jurisdiction, by the end of the year.”
It’s unclear what the next move will be for Aphria, but the company tried to wipe away the news by announcing today that it had raised $80 million in a bought deal placement. Shares of the company are down after today’s news. Other medical marijuana companies saw their shares go down Tuesday as well.
Featured image via Wikimedia Commons.