Whether it’s ego or just a desire for legitimacy, cannabis companies have often viewed a Nasdaq listing as a sign of success. It was a badge of honor and a step above the OTC Marketplace. You were selling at Bloomingdale’s not Dollar General.
But as the saying goes, be careful what you wish for.
Just this year, at least seven cannabis-related companies either been delisted from the exchange or warned that they are in danger of being delisted. That risk comes primarily from the price that the companies’ shares have traded at.
Stocks that trade under a dollar for more than 30 days get a friendly reminder from Nasdaq that this isn’t allowed. Companies get 180 days to try to get the share price back up, but if they can’t, they can get a 180-day extension. After that, they can request a hearing on the matter.
One common tactic is the reverse split, which usually buys some time. After all, fewer shares automatically ratchets up…
