U.S. investors are piling into marijuana stocks wherever they can find them. Even with marijuana still illegal at the federal level in the U.S., and with challenges to domestic companies trying to operate in the cannabis industry, fans of the marijuana movement have put their money into drug companies that are exploring cannabis-derived compounds for health uses, consumer giants making key partnerships with cannabis producers, and even plant fertilizer companies with potential applications for marijuana growers.

Yet for many investors, the place to look for great cannabis companies is Canada. That initially created a conundrum for U.S. investors seeking exposure to the marijuana industry, but smart players in the space have taken steps to make it easier to reap American capital. Now, Aurora Cannabis (NASDAQOTH:ACBFF) (TSX:ACB) is looking to join the ranks of cannabis companies available to U.S. investors on major domestic stock markets, and that should make it far easier for those who want to invest in the company without dealing with the challenges involved in finding alternative ways to put their money to work in marijuana.

A spread-out pile of marijuana leaves.

Image source: Getty Images.

How to invest in Canadian marijuana stocks

Those who want to invest in stocks based in Canada generally have two choices. Some brokers offer direct access to stocks that are listed on the Toronto Stock Exchange or other major markets in Canada. So, for instance, those who wanted to invest in Aurora Cannabis could buy the Toronto-listed shares of the company on the Canadian exchange -- if their broker allowed them to do so.

Alternatively, Canadian companies have the option of making their shares available on U.S. exchanges. Some, such as Canopy Growth (NYSE:CGC), have taken the step of dual-listing their shares so that both Canadian and U.S. investors can have access to the stock in their respective home markets. Tilray (NASDAQ:TLRY) did something more unusual, choosing to go public on the Nasdaq Stock Market first before ever making shares available on major exchanges in Canada.

If companies don't work with the New York Stock Exchange or Nasdaq Stock Market for a major listing, then the source of last resort for U.S. investors is what's known as the over-the-counter or pink sheets market. This is where Aurora Cannabis currently trades.

What's missing when you're not on a major exchange

However, there are disadvantages to over-the-counter or pink sheets trading. Without a trading floor, all transactions are handled electronically. Disclosure requirements aren't as broad, and trading activity can be a lot more disorganized than with listed stocks.

In particular, spreads between what buyers are willing to pay and what sellers are willing to accept for their shares can be broader than with NYSE or Nasdaq stocks, and that can make it more expensive to trade over-the-counter or pink sheets stocks. Some brokers also charge more for transactions that aren't conducted on major stock exchanges.

Why Aurora's making the move

After filing some necessary paperwork with the U.S. Securities and Exchange Commission late last week, Aurora Cannabis announced today that it would list its shares on the New York Stock Exchange. The company will use its Canadian ticker of ACB once the application is accepted, which it expects to happen before the end of October.

Aurora is excited about the move. As CEO Terry Booth said, "Through our NYSE listing, Aurora joins an established group of mature global brands with improved access and exposure to an engaged international institutional investor audience." The Edmonton-based company believes it's just at the beginning of its high-growth trajectory, and now's a good time to give U.S. investors better access to the company's shares.

Be ready for marijuana stocks

If marijuana continues to grow at its recent pace, then Aurora Cannabis could be just one of many Canadian companies seeking to list their shares south of the border. That doesn't eliminate the risks inherent to marijuana stocks, but it does make it a lot easier for U.S. investors to move forward if they decide that cannabis companies are worthy of their investment capital.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.