Canada’s “Cannabis Securities Exchange”

June 13. 2019. 5 mins read

The Canadian Securities Exchange (CSE) is an alternative stock exchange in Canada that “began operations in 2003 to provide a modern and efficient alternative for companies looking to access the Canadian public capital markets.” It’s also become a haven for cannabis stocks lately. We downloaded the most recent list of stocks that trade on the CSE and found 517 listings. Incredibly, 170 of those are cannabis related. That means about one third of all stocks traded on the CSE are related to cannabis making some people joke that CSE should actually stand for “Cannabis Securities Exchange.” What these pundits may not know is that the exposure to cannabis stocks appears to be well beyond 50% of the entire exchange. Let’s take a closer look at how we arrived at that conclusion.

The CSE Composite Index

In order to better understand the CSE as a whole, we can use what’s called a “stock index” which is a representation of how all stocks on the CSE perform. In other words, it’s not simply just a basket of all stocks on the CSE. Instead, it’s a collection of just 257 companies that provides “75% coverage of all equities listed on the CSE.” That’s generally how indexes work. In order to describe how a portfolio of securities performs, you don’t need to include them all. You can simply use a subset which is easier to manage, describe, and track. That’s what the CSE Composite Index does, and here’s how it’

Become a premium member and get access to hundreds of premium articles, reports and additional content.

Nanalyze Premium is your comprehensive guide to investing in disruptive technologies. Read by the top investment banks, management consultancies, VCs, and research houses. Trusted by over 100,000 institutional and retail investors. Covering disruptive technologies for over 18 years.