IG Markets looked at almost 1000 pot stocks before deciding to ban 19
Link copied to
IG Markets looked at almost 1000 cannabis stocks around the world before settling on the 19 it today banned the platform’s users from trading in, its Australian CEO says.
You can find the 19 companies here.
Seven weeks ago, the UK broker told its users to sell out of a range of cannabis stocks citing “the evolving political and regulatory landscape surrounding recreational cannabis-related securities”.
The deadline for selling is today, May 24.
IG Markets is a custodial system, whereby a custodian owns the shares rather than the individual, so it can and has asked investors to sell their cannabis holdings or it will do so for them.
IG Markets looked specifically at recreational use before making its own assessments on individual stocks, IG Markets chief Kevin Algeo told Stockhead today.
“What we’re finding with cannabis shares and businesses is that it’s still an evolving political and regulatory environment,” he reiterated, while admitting that it was a strange move for an Australian broker to take.
He could not immediately explain why the seven Australian pot stocks were on the list, but promised to provide the information next week.
Of the 19 pot stocks IG Markets is no longer trading in, the Australian ones are: Cann Global (ASX:CGB), Creso Pharma (ASX:CPH), Elixinol Global (ASX:EXL), Lifespot Health (ASX:LSH), Stemcell United (ASX:SCU), Bod Australia (ASX:BDA), and eSense-Lab (ASX:ESE).
Cann Global has been suspended since July last year but hopes to be relisted in the coming months. It has ties with BioHealth Pharmaceuticals in Canada.
eSense-Lab sells synthetic cannabis terpenes — the oils in plants that give them aromas — for vaping and is not in fact truly in the ‘cannabis business’. It sells these into the US and the UK.
Creso is a Swiss-based human and animal cannabis nutraceuticals company with operations in Canada, Australia and Latin America.
Elixinol Global is a hemp grower in the US, where hemp-derived cannabidiol (CBD) is legal.
Lifespot Health is working on a cannabis inhaler, as are several other ASX stocks.
Stemcell United has bought a hemp grower in a province in China, where industrial hemp growing is legal.
And Bod Australia is engaged with making over-the-counter and prescription medical cannabis products, as well as a wafer delivery system, and is focused on European markets.
Algeo said they’d seen a few clients moving out of stocks since the initial warning and into CFDs — contracts for difference.
A CFD allows investors to speculate on the rising or falling prices of financial instruments such as shares, without actually owning the underlying asset. Because investors enter into a contract over the underlying asset rather than buying the asset itself, they’re what’s known as a ‘derivative’.
The ASX stopped offering CFDs in 2014 saying trading in them after the global financial crisis decreased so much the market was no longer viable.