It seems counterintuitive for such a large group of stocks, but a great many publicly traded marijuana companies are not listed on the default U.S. exchanges, i.e., the New York Stock Exchange and the Nasdaq. 

There are several solid reasons why, however. Healthcare and Cannabis Bureau Chief Corinne Cardina Jurney and longtime Motley Fool contributor Eric Volkman break them down in this video clip from Motley Fool Live. This video was recorded on Oct. 20.

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Corinne Cardina: Absolutely. So let's look at a slightly less abysmal part of the pot market, the United States.

Eric Volkman: ...she said optimistically.

Cardina: I know, we'll dive into a couple of specific multi-state operators. But before we do that, a lot of these, pretty much all of them, trade on the over-the-counter exchange. Why is that and what does it mean for investors? So that everyone is not confused when I drop these exchanges into the chat.

Volkman: Yes, sure. Any of the major stock exchange these days in America, we're basically talking the New York Stock Exchange and the NASDAQ has a set of criteria for a stock to be listed. There's various minimums in that list, a share price minimum.

That's a big problem for a lot of stocks, because you just pointed it out, there's certain ones that have declined by about 80% so far this year. That gets into a minimum price territory, and once you start doing that dance, you have to make funky moves like reverse stock splits and all kinds of ways to somehow fudge staying on the exchange, it looks dodgy and it looks like you're desperate.

Over-the-counter is the next best thing, it's a lot less hassle, there are no minimums. There's so many things to worry about as a marijuana company, that's one less thing, like maintaining your listing.

Some companies find it more critical than others, for example, HEXO (HEXO). I always had the impression that Hexo, it was very important for them to stay on the New York Stock Exchange and they're still there and they don't seem to be struggling too much with that.

But the problem with over-the-counter is that it's, by its nature, disreputable. That's what a lot of people consider to be like the back alley of stocks, like New York Stock Exchange, that's the stocks you buy in the shiny nice store. But if you want to get an over-the-counter stock, you have to go into the back alley and meet the guy in the rain coat and do this weird transaction.

It's a reputational thing, but if you're in a position where you just can't maintain your listing properly or somehow support your stock price, you throw your hands in the air and you say, ''What the heck, go OTC."

Cardina: I think there's a component of breaking the federal law too. You can't trade on the New York Stock Exchange or the NASDAQ if you're selling cannabis in the U.S., which is federally not legal. I think that plays into it as well.

Volkman: Yes, there's ways to dance around that, and I'm not a lawyer, I don't know. I'm not a securities lawyer or a controlled substances lawyer, so I don't know what the legal niceties are there. There's ways around that, the way you present it yourself, what exactly your business is, how directly you sell the pot, kind of thing. I don't know the legal niceties but yes, that's a consideration too, and whether you, as a pot company, want to spend the resources and the time, and the capital, and the effort to do that.

I think a lot of pot companies do not want to do that.