When attempting to invest in psychedelic companies, you will ultimately come across NEO Exchange.
NEO Exchange is a new stock exchange that was launched in Canada in 2015. NEO aims to be a “fair exchange” – that is, it seeks to eliminate the predatory practice of high-frequency trading.
Why are Psychedelic Companies Listing on NEO?
To understand why psychedelic companies are going public on NEO Exchange, you must first understand why cannabis companies are.
In October 2017, the largest exchange in Canada, the Toronto Stock Exchange, said that any company that wanted to go public on their exchange must comply with the laws in the jurisdiction that they operate.
Cannabis companies in the US, therefore, wouldn’t be able to list on the Toronto Stock Exchange because cannabis remains illegal on the federal level in the US.
This rule immediately caused cannabis companies looking to go public to look at the two other exchanges in the country: The Canadian Securities Exchange (CSE) and NEO Exchange.
Although, the CSE is a larger exchange, many companies decided to start using NEO Exchange due to it being a “senior exchange” and requiring companies to have audited financial records. In short, the NEO Exchange requires the same listing requirements as the Toronto Stock Exchange, but it allowed cannabis companies.
Because psychedelic companies are a bit of a grey area in the US currently, many are continuing to list in Canada. As we have explained with NEO’s forward-thinking attitude, this has led to many psychedelic companies choosing NEO to list.
NEO’s CEO has gone as far as stating that listing psychedelic companies is an incredible opportunity to “do good.”
How to trade stocks listed on NEO
Although a Canadian exchange, any investor should be able to trade stocks listed on NEO. You simply need to use an online retail broker that works with NEO and you can get started trading right away. As of 2020, NEO already represents over 10% of all volume traded in Canadian-listed securities, so new retail brokers should begin signing up exponentially.
The most popular way to gain access to NEO companies is currently through Canadian online retail brokers, Questrade and Interactive Brokers.
What stocks list on the NEO Exchange?
As a relatively new exchange, NEO’s listings are growing every day. They currently offer a collection of ETFs and public companies. You can see NEO’s entire list of offerings here.