E Advice For Americans On Buying Cannabis Stocks Listed On Canadian Exchanges

[TM Editors' Note: This article discusses the purchase of penny stocks. Such stocks are easily manipulated and you must do your own careful due diligence. It's important to know how, but it's equally important to know what you are buying.]

It is easy for Canadian investors to execute orders for cannabis stocks using their Canadian symbol but it is not as straightforward for other individuals (i.e. Americans) using non-Canadian brokerage houses, because many brokerage houses and online brokers don't know the symbols for the cannabis penny stocks you might wish to buy. That's where the use of CUSIP numbers can be very helpful.

What Are CUSIP Numbers?

The most important thing you can do as an American is give your broker the CUSIP number for the pot stock you wish to purchase. CUSIP stands for Committee on Uniform Security Information Procedures which are unique codes established by the American Bankers Association for all Canadian and American stocks, bonds, puts, calls, warrants, etc. as assigned by Standard and Poor’s. The CUSIP number consists of:

  • a combination of 9 characters, both letters and numbers, which act as a sort of DNA for the security uniquely identifying the company or issuer and the type of security.
    • The first 6 characters identify the issuer and are assigned in alphabetical order;
    • the 7th and 8th characters, which can be alphabetical or numerical, identify the type of issue;
    • the last digit is used as a check digit.

How Does One Buy or Sell A Marijuana Stock Not Listed on a U.S. Stock Exchange?

The problem for many American investors is that if the pot stocks they want to buy are not listed on the NYSE, the NASDAQ, or over the counter (OTC) but, instead, listed on the Toronto Stock Exchange (TSX/TSE), the TSXV (Venture), the Canadian Securities Exchange (CSE) or the NEO exchange, then their broker may say that they can’t execute their order. That is just hogwash, though, as any broker who says that is actually confessing that he/she doesn't know how to buy such stocks and is too lazy to find out how to do so and provide the service and expertise you are paying him/her for. If that is the case, it is important that you ‘tell’ them exactly what you want them to do on your behalf and most will be more than happy to comply. That's where your knowledge as to what the CUSIP number is for the stock you want to buy comes in.

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