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The TMX Group won’t change its policy preventing Toronto Stock Exchange and TSX Venture Exchange-listed companies from participating in the U.S. cannabis market until the STATES Act or similar federal reform passes in the United States, the managing director of the TSX-V said Thursday.

“We can’t define listing policy based on public sentiment, what some president says in a tweet, ... our speculation of whether the STATES Act will pass or not. We have to determine a listings policy that is transparent and can be equally applied across all issuers that work with us,” Brady Fletcher told attendees of the Lift & Co. Cannabis Business Conference in Vancouver.

The fact that the TSX and the TSX-V won’t allow listed companies to operate in the U.S. has frustrated Canada’s large publicly traded cannabis companies who are eager to enter the largest and most sophisticated cannabis market in the world. It’s also made the Canadian Securities Exchange, a smaller competitor to the TSX and TSX-V, the go-to place for U.S. companies looking to go public. CSE-listed companies have raised hundreds of millions of dollars in the last few months alone, as a handful of multi-state operators have gone public in Canada.

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While nine states have legalized recreational cannabis at a state level in the U.S., and more than 30 states have legalized medical marijuana, the drug remain illegal at a federal level. The STATES Act, while stopping short of full federal legalization, would mean federal prohibition on cannabis would not apply in states that have legalized the drug locally. The legislation has been proposed in both the Senate and the House of Representatives.

“At the end of the day we need to be able to say, is this a legal business or is this not a legal business. As the U.S. adapts, their policies change, and the STATES Act comes through, then … I’ll probably be the first guy picking up the phone to say, ‘guess what, we’re open for business,” Mr. Brady said.

The TSX-V is already starting to cash in on the U.S. hemp market, Mr. Brady said, following the passage of the Farm Bill in December, which descheduled hemp-derived CBD.

“I’m working with U.S. hemp issuers, because the Farm Act opened the door, or gave us that framework to be able to say, here’s how we understand the legality, and here’s how we can work with these issuers,” Mr. Brady said.

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