Cannabis Companies Delisted From Major Stock Exchanges In 2024: What Went Wrong?

Several cannabis companies faced financial challenges in 2024, with some being delisted or under threat of delisting from major stock exchanges due to financial instability, low values, compliance issues and a turbulent market.

This article looks into some of the key players that faced delisting, their strategies and outcomes from the ones that powered through to those that succumbed and faced restructuring.

Diverse Situations

Bright Green Corporation is one of the latest cannabis companies to delist in 2024. On September 19, 2024, trading of its shares was suspended from Nasdaq following the cancellation of its scheduled delist appeal hearing.

The company has struggled to meet the exchange’s compliance standards due to various operational and financial challenges.

Bright Green has been working to strengthen its financial position, with plans for a reverse stock split aimed at boosting shareholder value. Additionally, the company is exploring strategic alternatives, including partnerships and acquisitions. Despite these efforts, its delisting reflects broader issues within the cannabis industry, where companies are facing pressure to maintain market confidence and stock value.

Aurora Cannabis ACB, the Canadian giant and significant player in the global cannabis market, managed to avoid delisting by executing a 1:10 reverse stock split earlier this year.

Aurora’s stock had been trading below Nasdaq’s $1 minimum share price for an extended period, a common problem for cannabis companies struggling in the current market environment. By consolidating shares, Aurora was able to meet Nasdaq’s requirements. The reverse split paid off: its stock value is oscillating around a healthy $5.79 per share at the time of this writing.

Read Also: NASDAQ-Listed Aurora Cannabis Breaks Up With Uruguay: It’s Not You, It’s The Market

Unlike Aurora, Clever Leaves Holdings Inc. chose to voluntarily delist from Nasdaq in May 2024. The Colombian company cited its failure to maintain compliance with listing requirements and the high costs associated with regulatory obligations as key reasons for the decision. Clever Leaves, which focuses on medicinal cannabis production, decided that freeing itself from the burdens of public market regulations would allow it to concentrate on strengthening its core operations​.

Heritage Cannabis Holdings Corp. faced a more severe fate. In August 2024, the company was delisted from both the Canadian Securities Exchange (CSE) and the OTCQX market as part of creditor protection proceedings. Financial difficulties and the need to restructure through a sale and investment process led to Heritage’s exit from public markets, mirroring the struggles faced by many cannabis companies grappling with overextension and market instability​.

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In another recent case, Lotus Ventures Inc. completed a financial transaction by selling 1,000 shares to 5008679 Ontario Limited for CA$2.54 ($1.82 million), giving the purchaser 100% ownership. As a result, all other shares were canceled, and Lotus was delisted from the Canadian Stock Exchange and OTC Markets on August 20, 2024. The company will also stop reporting as a public company in Alberta, British Columbia and Ontario.

2024: The Year To Turn Things Around?

So far, 2024 has proven to be a challenging year for the cannabis industry though it appears to be better than last year in terms of delistings and overall financial health of the market.

While some companies, like Aurora, managed to navigate the storm by implementing internal reorganizations, others, like Heritage and Bright Green were not so fortunate. Many of the financial problems faced by the cannabis industry are linked to federal prohibition in the United States and delays in the much-anticipated rescheduling.

In this context, many in the industry continue to look for new strategies to maintain financial health in an increasingly competitive market.

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