America First, Except for Cannabis: How U.S. Capital Markets Are Handing the Future of a Domestic Industry to Canada

By Hirsh Jain, CEO of Ananda Strategy

There are many contradictions in U.S. cannabis policy, but few are as economically irrational, or as politically indefensible, as this one: American cannabis companies, operating legally under the laws of dozens of U.S. states and employing hundreds of thousands of Americans, are barred from listing on the world’s most powerful stock exchanges – headquartered, of course, in the United States – while Canadian cannabis companies freely trade on the NYSE and Nasdaq. The result is a quiet but consequential transfer of capital market advantage away from U.S. operators and toward foreign competitors, at precisely the moment when the United States is beginning to acknowledge, through a rescheduling process likely to be finalized in the coming months, that its half-century experiment with cannabis prohibition has failed.

This is not a narrow securities law technicality. It is a structural failure of industrial policy and capital markets policy combined. And when viewed through the lens of an America First economic philosophy, one that President Trump has repeatedly articulated as prioritizing domestic workers, domestic firms, and domestic capital formation, it represents a self-inflicted wound that is difficult to justify on economic, political, or strategic grounds.

To understand the absurdity, consider the position of U.S. cannabis companies today. They are licensed by states, regulated by state agencies, taxed heavily by state and local governments, and relied upon by tens of millions of consumers. They employ an estimated 450,000 Americans nationwide, making cannabis one of the fastest-growing employment engines in the U.S. economy, with jobs spanning rural cultivation sites, manufacturing facilities, distribution networks, and retail storefronts in red and blue states alike. Yet because cannabis remains federally illegal, or more precisely because the federal government has not provided the requisite clarity, these same companies are locked out of the deepest and most efficient capital markets in the world.

At the same time, Canadian cannabis companies enjoy full access to those markets. They raise capital more cheaply, trade with greater liquidity, and attract institutional investors that U.S. companies cannot. This advantage does not exist because Canadian firms are stronger or more innovative, but because Canada made an early federal legalization decision that gave global stock exchanges the clarity they require. The implicit message of the current system is difficult to defend: if you want access to American capital markets, do not be American.

The irony becomes sharper as the federal government moves toward rescheduling cannabis, a reform that President Trump has rightly framed as a pragmatic recognition of medical reality. Rescheduling is widely, and correctly, viewed as the most consequential shift in U.S. cannabis policy in decades. It acknowledges medical utility, reduces stigma, and begins to unwind tax rules that have distorted the economics of state-legal operators. But without corresponding clarity on capital markets access, rescheduling risks produce a deeply counterintuitive outcome. The companies best positioned to benefit immediately are not American operators employing hundreds of thousands of U.S. workers, but foreign firms that are already exchange-listed.

Capital flows toward liquidity and access. When legal risk declines and margins improve, investors allocate capital to the companies they can buy easily, at scale, and through familiar venues. Today, those companies are disproportionately Canadian. U.S. operators, the firms whose day-to-day operations rescheduling is meant to rationalize, remain confined to secondary exchanges, over-the-counter markets, or private balance sheets. The result is a reform that improves industry fundamentals while continuing to structurally disadvantage domestic cannabis companies.

This outcome runs directly against the principles that have defined President Trump’s America First economic agenda. That agenda has consistently emphasized domestic production, domestic employment, and keeping high-value economic activity inside the United States. In sector after sector, from energy to manufacturing to finance, the animating idea has been straightforward: when the United States modernizes its rules, American companies and American workers should be positioned to benefit first.

Allowing U.S. cannabis companies to list on U.S. exchanges fits cleanly within that framework. It does not require subsidies, tariffs, or new federal spending. It simply removes a regulatory ambiguity that currently pushes capital, liquidity, and strategic advantage across the border. Few policy changes would more directly strengthen a domestic industry that already employs nearly half a million Americans, a number that will continue to grow in the coming years as new state markets come online.

The importance of exchange access extends far beyond the companies that would immediately uplist. Public markets are infrastructure. When large operators gain access to lower-cost capital and broader investor bases, the effects cascade through the entire ecosystem. Sector-wide valuations stabilize. Lending terms improve. Stock-based mergers become feasible. Private companies gain clearer exit paths. Employees receive equity that is actually liquid. Standards of governance and disclosure rise, benefiting regulators, lenders, and investors alike.

These benefits extend to workers across the industry, regardless of whether their employer ever lists on a major exchange. Better-capitalized companies are more stable employers. They are better positioned to pay competitive wages, offer benefits, invest in training, and create durable career paths across cultivation, manufacturing, distribution, retail and compliance. When capital is abundant and affordable, labor markets tighten organically, as firms compete for talent rather than cut costs to survive. Even employees at smaller or privately held operators benefit as compensation benchmarks rise and job mobility improves.

Capital access also reduces what has been one of the most damaging features of the current U.S. cannabis market: volatility. Sudden layoffs, missed payrolls, abandoned facilities, and collapsed operators have been common, not because demand is weak, but because financing is scarce and expensive. Access to public markets allows companies to refinance debt, absorb downturns, and plan for the long term. Stability benefits not only workers trying to build long-term careers (and their families), but also communities and regulators who depend on these businesses functioning predictably.

Other stakeholders benefit as well. Suppliers gain customers with stronger balance sheets and more reliable purchasing cycles. Landlords face lower default risk. Lenders operate in a sector with greater transparency and governance. Consumers benefit from safer products, a more consistent supply, and greater investment in quality and innovation. State and local governments benefit from more stable tax revenues and fewer business failures that undermine regulatory goals.

Importantly, stock exchanges themselves are not the obstacle here. They are private institutions making rational risk assessments in the absence of clear federal authorization. Their caution reflects uncertainty about enforcement and political reversal, not opposition to the industry. What these exchanges need, urgently, is clarity from the federal government.

That clarity can come from Congress, through legislation explicitly permitting state-legal cannabis companies to list on major exchanges. It can also come from the executive branch, by swiftly finalizing rescheduling and pairing it with clear agency guidance and transparent enforcement priorities. Either path would materially change the risk calculus and allow capital markets to function as intended, reinforcing the kind of pro-growth, pro-domestic investment environment President Trump has long argued for.

The choice facing the United States is straightforward. It can continue to modernize cannabis law in ways that inadvertently channel capital and advantage to Canadian firms. Or it can align capital markets policy with economic reality and ensure that American companies, American workers, and American markets benefit first. Finishing the job, by pairing rescheduling with capital markets clarity, would do exactly what President Trump’s America First philosophy promises and demands: keep jobs, investment, and growth here at home in the United States.

Godspeed, Mr. President.

Hirsh Jain is the CEO of Ananda Strategy, a cannabis-focused business advisory firm that works with cannabis brands, retailers, testing labs, technology platforms and other businesses on matters ranging from competitive licensing, legislative strategy, regulatory intelligence, market expansion, business litigation, stakeholder communication and other varied corporate initiatives.

This article is from an external, unpaid contributor. It does not represent IgniteIt’s reporting and has not been edited for content or accuracy. 

Photo by teleterapia.fi on Unsplash