On Thursday afternoon, during the ArcView Group’s investor conference in New York City, I sat down with Barrington Miller, director of listed company services for the Canadian Securities Exchange. It was a candid conversation, and focused on the SAFE Banking Act’s significance to the global cannabis industry. (Read Cannabis Wire’s coverage of the Act, which passed last month in the U.S. House and is now in the Senate, here.)
Here are the highlights: (This conversation has been edited for length and clarity.)
Alyson Martin, Cannabis Wire: How does the SAFE Banking Act affect you and the Canadian Securities Exchange, if it passes?
Barrington Miller, Canadian Securities Exchange: Well, I think the SAFE Banking Act, when it does pass, it’s going to open up this industry, and help show people what cannabis really is, and that’s a legitimate business. It’s unfortunate that [cannabis has] been viewed the way it is. We didn’t take that approach; essentially, we will list properties that are operating in a jurisdiction that is legal. When this Act passes, it’s going to be a good thing, but I think it’s going to be a while, unfortunately. What you’ll see is, hopefully, companies continue to explore the listings in Canada, and hopefully in the United States, as well. And they can come to the North American market and eventually move to South America, the Caribbean, which is what we’re starting to see right now.
Martin: Can you characterize your discussions with other heads of exchanges? How are people thinking about the globalization of the cannabis industry?
Miller: The way we operate at the CSE is, our tagline is, the exchange for entrepreneurs. So my title says “director of listed company services.”
I’m supposed to take care of companies after they list. But because we’re a small group of 40, I find myself doing business development, and all sorts of roles, wearing many hats. So I had the recent pleasure of talking with Marlene Street Forrest. She’s the head of the Jamaican Stock Exchange. My background is Jamaican, so I’m sort of cheering for them, another exchange. They’re getting into it, as far as cannabis, but they’re restricted because of banking. And they’re following the U.S. model and they’re waiting to see what the U.S. is going to do. And during our discussion, we’re like, “well, you know, you can bank in Canada, and do business in Canada.” And they’re like: that’s nice. But everyone knows where the real heart of capitalism and the really real heartbeat is, and that’s the United States. So in talking with the JSE, a very good performance stock exchange, they’re waiting to see. If they’re waiting to see, all other exchanges are waiting to see what the U.S. will do. And the U.S., even though it’s been criticized as far as its banking, is taking it slow. Like, this is a big, big deal. Whatever you decide to do and however you decide to do it will have a global effect. And it’s not a decision that should be made lightly or quickly.
Martin: I mean, the toothpaste is out of the tube, right? I’m not here to speculate. But we do have an impeachment inquiry that’s been launched in the United States that could take up some political capital in D.C. The Senate could be busy with something else, not SAFE Banking. What happens if it just sort of fizzles this year? Where do you see things going?
Miller: Well here’s the thing. I get asked a lot: how are listers? Are they down? Are they up? And the truth of the matter is, we’re seeing the same amount, if not more, companies coming up from the United States. What’s happening now, are the companies that are currently on the exchange are taking them over. They’re almost cutting them off before they have a chance to go public. So, you’re seeing, I guess, less companies that are going public, but the same amount that are exploring the public option. You have the multi-state operators who, last year, were raising money to go public, are now using those secondary and tertiary finances for mergers and acquisitions, and for growth, which is what public companies do. And we want to see them get bigger.
We’re seeing a lot more business coming from Colombia. And the rest of Latin America. I spoke to few companies out of South Africa, Australia. We listed our first German company a couple weeks ago. So, I imagine that that trend will continue. 2019 was the year of branding, mergers and acquisitions, of land grabs, especially with the US, and I don’t see that really slowing down if this SAFE Banking doesn’t pass in the time that it should.
Martin: What is 2020 going to be the year of?
Miller: It’s going to be the year of the United States. I still think that’s what’s happening. It’s a great, great country. I really think it’s the year of the United States, and the U.S. will determine and dictate the global direction of the cannabis industry.