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David N. Feldman

First Cannabis Company is Exchange-Listed Amid Uncertainty

In a major positive step for the cannabis industry, the New York Stock Exchange last month listed a new real estate investment trust called Innovative Industrial Properties (NYSE:IIPR), the first cannabis company to be listed on a US national exchange. The company plans to invest solely in real estate intended to be leased out to cannabis growers. In the IPO they raised $67 million, much less than expected. The price has not moved above the IPO price, but it has moved steadily up recently after an initial drop on its first few days of trading.

Other challenges analysts cite: the concentration of investment in one industry, management not experienced in cannabis, and the high uncertainty of the future of federal oversight under President-elect Trump. Trump has said he is fully behind medical marijuana, not a fan of recreational use but believes it should be up to the states, has been against the war on drugs for years and is certainly pro-jobs and pro-taxes coming in. But many are concerned about his nomination of Alabama Senator Jeff Sessions to be the next US Attorney General. As recently as this April, Sessions said, “Good people don’t smoke marijuana” and that it’s “not the kind of thing that ought to be legalized.”

Congress has kept the feds from using money to go after those properly complying with state cannabis laws. But those actions, in appropriation bills, have to be renewed each year, and recent parliamentary changes may make that more difficult. The key question will be whether Trump allows Sessions free rein on the issue. That’s the unknown. But this new listing is still very big for the industry, especially after Nasdaq’s very strong refusal to list MassRoots earlier this year.

NYSE Further Narrows Broker Discretionary Voting: Potential Impact on a Company’s Proxy Season Planning

The New York Stock Exchange (NYSE) once again has limited the ability of a broker to vote on proposals at shareholder meetings for which the broker has not received voting instructions from its customers. This narrowing follows recent rule amendments triggered by the Dodd-Frank Act prohibiting brokers from voting uninstructed shares in the election of directors and on proposals relating to executive compensation.

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