Marijuana investing is back in the spotlight in 2019, with many major marijuana-production stocks seeing nice bounces after a tough showing last year. As interest in cannabis has grown, more and more companies have sought to profit from the craze, and that has led to companies making efforts to get their shares listed on public markets both on exchanges in Canada, as well as on major stock markets in the U.S. like the NYSE and Nasdaq.
With so much competition, marijuana companies feel like they have to do anything they can to get an edge. That's the basis for a bizarre lottery that the Canadian Securities Exchange is conducting today, as a host of cannabis stocks are apparently fighting each other for the right to use the ticker symbol POT on several exchanges in Canada.
All in a ticker symbol
Ticker symbols have had importance among companies for a long time, but in the U.S., most of the debate has been about whether a company could get a prestigious single-letter ticker symbol. Historically, the New York Stock Exchange had sole control over single-letter tickers, and only the top companies in their respective industries tended to have them. Now, you'll find companies of all types and sizes using single-letter tickers.
In Canada, budding marijuana companies were quick to seize on the opportunity to promote their businesses by grabbing up available tickers related to the industry. Canopy Growth (NYSE:CGC) has an innocuous ticker symbol for U.S. trading but in Canada, its symbol is WEED. An exchange-traded fund picked up the MJ ticker in the U.S., and that's helped ETFMG Alternative Harvest (NYSEMKT:MJ) gain recognition for its portfolio of cannabis stocks.
Given that behavior, it's reasonable to wonder why this is only becoming an issue now. The reason is that, until recently, the ticker POT was taken in both the U.S. and Canada. Fertilizer giant Potash Corp. of Saskatchewan used the ticker in markets on both sides of the 49th parallel until the end of 2017, when it completed its merger with industry peer Agrium. The two companies decided to adopt a new name Nutrien (NYSE:NTR) in order to more fully reflect the full range of products that it offered to its customers.
Now, a year has gone by, and that's given enough breathing room to prevent any confusion among investors about whether a stock bearing the symbol POT would still represent an interest in PotashCorp. Under the terms of the lottery, companies interested in using the symbol had to choose to participate by close of business on Jan. 29, with the selection to be made on Jan. 30. The winner will be able to use the symbol as soon as Feb. 1, although it will also have up to 90 days to make the transition. That waiting period might be important for companies that aren't yet listed but have already filed applications to get a listing on Canadian exchanges.
Will there be a U.S. ticker battle?
The lottery only applies to the ticker symbol on Canadian exchanges, so the obvious question remaining is what will happen to POT in the U.S. stock markets. Despite the demand in Canada, there's reason to think there won't be as much of a rush in the U.S. to use the symbol.
First of all, plenty of high-profile companies have already listed their shares in the U.S., and for the most part, they've made no attempt to be cute with their tickers. Most of the largest cannabis stocks have followed the usual convention of either using letters in the first word of their names or acronyms of the multiple words that make up their names.
More importantly, many cannabis companies are listing in the U.S. in order to gain a reputational advantage. Promising pot producers want to bill themselves as legitimate businesses that deserve serious consideration among investors in the same way as any other industry. Making the cheap joke of grabbing the POT ticker symbol goes against those efforts.
Marijuana stocks will fight to get an edge in whatever way they can, and in Canada, the POT ticker-symbol lottery could be a game changer for some small company looking for a way to stand out. But for the U.S. market, cannabis companies seem content to make a name for themselves and let marijuana investors associate their chosen ticker symbols with the best investment opportunities in the space.