January 31 | 2018
James Black, vice president of listings development at the Canadian Securities Exchange (CSE), took the time to chat with the Investing News Network at the Vancouver Resource Investment Conference.
Black said the CSE differs from other Canadian exchanges, such as the TSX and TSXV, because it has lower and fixed fees, plus a regulatory model that offers “a lighter touch based on the fact that we have most of the disclosure posted to our website.”
He said the exchange adheres to the highest level of regulation, but “we also understand entrepreneurs are always on the cutting edge of technology, [the] cutting edge of industry, and that’s why we’ve seen such growth in cannabis and other tech sectors.”
Interest in cannabis stocks has been strong ahead of Canadian government’s plans for legalization. Black said he has seen the sector go from zero to $20 billion over about four years in terms of market cap growth. “That’s insane. We’ve never seen such velocity,” he said, adding that the CSE had a record year in 2017. He noted, “around 80 percent of our listing and trading and fundraising activity last year was tied to growth in the cannabis market.”
He explained, “we saw trading and fundraising activity last year that we’ve never seen. [We] welcomed our first billion-dollar company by market cap and … over a billion dollars in financing into CSE-listed companies. Again, around $800 million of that into cannabis issuers.” Black added, “we’re really excited about some of the tech sectors that are starting to populate the CSE — blockchain, AI and others.”
Watch the video above for more insight from James Black. The transcript for this interview is available below.
INN: So my first question, what are some of the reasons that a company would chose to list with the CSE?
JB: Well, we’ve got a few. I mean, we try to break it down into 5 reasons all of which I won’t go into detail here but, really, people like the simplicity that we offer as a marketplace. We have simple, easy to understand entrance requirements. Disclosure on the exchange is often a much simpler experience, than what you may be used to another marketplaces, because a lot of the disclosure that we produce on our website ensures that you don’t have to have a conversation with the exchange such as when you file not a prospectus necessarily but a private placement or regular corporate action doesn’t need to be reviewed by the exchange. So people find simplicity in that model. The ongoing regulatory model and then the fee model. The fee model is a symptom of how we regulate so, we can offer a fixed fee model that’s simple understand, it’s one fee every month and it’s very much aligned with what most people expect in a subscription based model. Consistent service throughout the year, one simple fee every month, low and fixed.
INN: And how does the CSE differ from other exchanges in Canada? TSX, TSXV?
JB: Yes. I just touched on it somewhat with ongoing regulatory model. It’s a lighter touch based on the fact that we have most of the disclosure posted to our website and SEDAR. The fees, again, lower fixed. You don’t see that in other exchanges, so private placements again, if you raised any amount of money on the exchange, it’s not tied to a table of fees that you have to pay on top of that. Other than that, I think people really enjoyed the service they get from the exchange. They know that we’re there to answer questions, we’re friendly, we’re responsive, and we’re very open minded around what people are trying to do with their business. So we ensure the highest level of regulations adhered to, but we also understand that entrepreneurs are always on the cutting edge of technology, cutting edge of industry and that’s why we’ve seen such growth in cannabis and other tech sectors as well populate our marketplace.
INN: I was just going to touch on that. So I was going to ask you, what about some the trading growth that you’ve seen over the last few years?
JB: Right. So if you look at the 80, 20 principle, it directly applies to what we see on cannabis. So I would say around 80 percent of our listing and trading and fundraising activity last year was tied to the growth in the cannabis market, which has been a huge boon to the Canadian economy. Zero to 20 billion and about 4 years of market cap growth, that’s insane. We’ve never seen such velocity so CSE, we had very much an open door policy, we welcomed this industry to the public markets and we got to benefit from that to the tune of a record year last year. So we saw trading and fundraising activity last year that we’ve never seen. Welcomed our first billion dollar company by market cap and also welcomed over a billion dollars in financing into CSE-listed companies. Again, around 800 million of that being into cannabis issuers.
INN: And I was watching your presentation as well and I was just interested in something that was mentioned about cross listing? Can you go into that? What that is?
JB: Yes. We encourage companies that if they’re on the CSE and they’re of a certain maturity, they should perhaps look at listing in the US on an OTC-QX or QB market tier. These are not the NYSE or the NASDAQ, the big national exchanges but rather OTC Markets that allow the companies to access new shareholders in the secondary markets through these quotations and this are well regarded markets now and we see a good fit with the CSE that if you want to access US shareholders, that’s your simplest path to get into that market.
INN: So I’m pretty much out of questions. Is there anything else that you wanted to talk about?
JB: For sure, what I would like to say about CSE is stay tuned in 2018. We have a very extensive events calendar. We like to do event marketing, we’re really excited about the some of the tech sectors that are starting to populate the CSE, block chain, AI and others. We’re all working towards big show here in Vancouver in September with Cambridge House called Extraordinary Future so stay tuned, we’ll going to have events leading leading up to that and we’ll see you back here in September for a big show.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.