The Creso Pharma Ltd [ASX:CPH] share price jumped 12% after the pot stock completed its US OTC dual listing.
CPH shares were up as much as 15% in early trade, pulling back somewhat to exchange hands for 18 cents a share at time of writing, up 12.5%.
Today’s spike arrests Creso’s recent slump, with the stock down 10% this month.
However, interest in ASX pot stocks saw CPH’s share price rocket 235% over the last 12 months.
Source: Tradingview.com
Creso’s dual listing complete
From Friday, 11 June (USA OTC market time), Creso Pharma will commence trading on the US OTCQB (OTC) market under the ticker code COPHF.
The OTCQB, also called a venture market, is the middle tier of the over-the-counter market for US stocks.
Created in 2010, it hosts mainly early-stage and developing companies not yet eligible to qualify for the top tier OTCQX.
The decision to dual list follows ‘growing interest’ from North American investors after Creso’s proposed acquisition of Halucenex Life Sciences and strong sales from wholly-owned subsidiary Mernova Medicinal.
Companies typically cross-list because they can access more capital, improve liquidity, and have shares trade longer if the dual-listed exchanges are in different time zones.
A dual-listed stock’s larger investor pool can help the firm raise more capital and help investors by increasing the stock’s liquidity.
Creso said that entering the US market aligns with its strategic outlook to expand its operations within the region.
Creso Share Price ASX outlook
Today’s spike in CPH shares may reflect a market anticipating strong interest from US investors when Creso begins trading on the OTCQB.
Interest in buying cannabis stocks continues to rise, especially from US investors.
Toby Pratt, Senior Analyst at New York hedge fund JW Asset Management, noted that the US is ‘by far the most attractive cannabis market to invest in today and likely will remain so for the foreseeable future.’
According to Yahoo Finance, the most actively traded securities on the OTC markets in the US last year were in the cannabis and crypto sectors.
Bullish investors may be thinking that Creso is well-positioned to capitalise on a larger pool of investors with a strong appetite for pot stocks.
Creso itself expects to tap a deeper capital market with the dual listing, allowing for a ‘potential revaluation of the Company, in line with recent demand experienced by Creso Pharma’s North American peers.’
The stock price of a dual-listed company should be approximately the same in both exchanges (after accounting for currency differences and transaction costs).
So ASX investors may have bid up CPH shares today, expecting US investors to do the same when the US OTC market opens.
Pot stocks can be volatile, but the wider cannabis and psychedelic trend is one worth following.
If you’re looking for more insights into the sector and pot stocks in particular, then check out our latest free report, which discusses three pot stocks worth looking at right now.
Get your free copy here.
Regards,
Lachlann Tierney,
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here
