As 2019 comes to a close, it'll go down as a great year for the broader market and a miserable year for marijuana stocks. What's so crazy about the latter is that pot stocks opened the year with jaw-dropping gains throughout the first quarter, but logged substantial double-digit declines since the end of March.

Pretty much everything that could go wrong has gone wrong for pot stocks. Supply issues in Canada have kept legal product from reaching consumers, while high tax rates in select U.S. states have made it impossible for legal weed to compete with the black market. As a result, marijuana stocks have continued to lose money at a time when most of Wall Street foresaw the industry pushing into the green.

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NYSE delisting could be a real possibility for a handful of cannabis stocks in 2020

Pot stocks have a lot to be concerned with in the upcoming year, including pricing pressures and a persistent black market presence. But a handful of pot stocks can also add a possible delisting from the New York Stock Exchange (NYSE) to their growing list of concerns.

As some folks are likely aware, it's not easy for marijuana stocks to uplist to, or go the initial public offering (IPO) route on, a major U.S. exchange, such as the NYSE or Nasdaq. Both exchanges have a laundry list of financial, volume, and other intangible factors that are considered when a company files the required paperwork to uplist from the over-the-counter (OTC) exchange or to do an IPO. But the real issue is that, since marijuana is an illicit substance in the U.S. at the federal level, no company that directly deals with the cannabis plant in the U.S. is allowed to list their common stock on the NYSE or Nasdaq. This factor, along with the financial and volume requirements, excludes most pot stocks from uplisting.

Nevertheless, more than a dozen direct and ancillary marijuana stocks have made the move over the past three years. In doing so, they've improved their visibility, bolstered their volume-based liquidity, and garnered far more Wall Street coverage and/or investments than they would have if they remained listed on the OTC exchange or remained private.

But for three pot stocks, this dream could being ending in 2020.

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CannTrust Holdings

The most logical delisting candidate is Ontario-based CannTrust (OTC:CNTTQ), which is currently failing two ongoing listing requirements.  This includes a share price that's been below $1 per share for a period of 30 days, as well as the fact that the company hasn't filed its quarterly operating results since May. Although both insufficiencies could get CannTrust booted from the NYSE, the latter is far more concerning. It's likely the company will be shown the NYSE exit door in the first half of 2020.

As you may know, CannTrust dropped a bombshell on Wall Street in July by admitting that it illegally grew cannabis in five unlicensed rooms for a period of six months between October 2018 and March 2019. As a result of these findings, the company's CEO was fired, and Health Canada suspended CannTrust's cultivation and sales licenses in September. In theory, this leaves the door open for the company to regain its license in 2020, assuming it meets a laundry list of requirements laid out by Health Canada. But in the meantime, CannTrust is burning through cash and is unable to sell a gram of cannabis.

Even if CannTrust were to do a reverse split in order to get its share price back above $1, the fact that it's failed to report its quarterly results looks to be the dooming factor that'll banish it back to the OTC exchange.

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Quebec-based HEXO (NASDAQ:HEXO) is another popular pot stock that's starting to inch toward dangerous territory.

Last week, HEXO announced a direct offering of nearly 15 million shares of stock at a 15% discount to the previous day's closing price. Although the offering is going to raise $25 million in gross proceeds, it wound up clobbering the company's share price. As of Thursday, Dec. 26, HEXO closed at a mere $1.53, down 82% from its all-time high set eight months ago. This is notable because $1 is the minimum listing price on the NYSE. 

In recent months, HEXO has seriously walked back lofty expectations. The company had been calling for $400 million Canadian in sales for the upcoming year, but has since pulled that guidance. Further, HEXO is idling about a third of its run-rate peak output. The Niagara cultivation campus, acquired when the company bought Newstrike Brands earlier this year, will be idled, with 200,000 square feet of growing space at Gatineau also shut down for the time being. HEXO has also announced 200 job cuts in an effort to better align its costs with the current demand environment.

While HEXO isn't in violation of NYSE listing requirements for now, it wouldn't take much for its share price to drop below $1 (and stay there) at this point.

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Aurora Cannabis

Yes, even the most popular marijuana stock on the planet, Aurora Cannabis (NASDAQ:ACB), could be facing delisting from the NYSE in 2020. Like HEXO, Aurora's share price has declined more than 80% since hitting its yearly high in March. Now valued at $2 per share as of Dec. 26, Aurora is creeping closer to dipping below the NYSE's minimum listing price.

Aurora, like HEXO, has also taken steps to reduce its expenses in the wake of subdued demand and Canadian supply problems. In the company's first-quarter operating results, Aurora announced plans to halt construction at Aurora Sun in Alberta and Aurora Nordic 2 in Denmark. Utilizing just six grow rooms at Aurora Sun, the company will likely see its "at least 625,000 kilos" in projected run-rate annual output by the end of fiscal 2020 halved.

There's also no masking that Aurora Cannabis' balance sheet is a mess. Some on Wall Street have suggested that the company's cash position isn't sufficient to meet its expansionary costs. Meanwhile, Aurora's aggressive acquisition strategy over the past three-plus years has left the company with CA$3.17 billion in goodwill. Representing 57% of total assets, Aurora's goodwill looks like a ticking time bomb that'll eventually lead to a writedown.

In other words, with plenty of downside catalysts still in the offing, a continued drop in Aurora's share price, perhaps below $1, can't be discounted.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.