Core One Labs Inc. (CLABF)

[Sam Dan]

An article from Cannacord re clarifying CSE allowing listing
of Marijuana companies operating in USA to maintain their listing.. Important for LDS shareholders to be confident that listing will be continued.
"FACT: FRENCH FRIES CAN BE A PIZZA TOPPING. Canaccord Genuity Life Sciences Analyst Matt Bottomley points out that over the past two months, Canadian-listed cannabis companies with U.S. operations (which are predominantly listed on the Canadian Securities Exchange) have been relatively flat. At the heart of this issue are rumors that in August, the Clearing and Depository Services (CDS), Canada’s largest stock clearing/settlement company, was considering prohibiting clearing trades for cannabis companies with U.S. exposure. However, earlier this week the Canadian Securities Administrators (CSA) released Staff Notice 51-352 Issuers with U.S. Marijuana-Related Activities. Although the CSA called for robust disclosures surrounding the risks associated with operating environments where state and federal laws conflict, it also noted that each exchange in Canada should make its own determination on whether to list such issuers. In doing so, the CSA recognized that different exchanges may reach different conclusions on this matter. As a result, Bottomley believes this update has the following implications: The CSA’s commentary represents the removal of a moderate overhang facing Canadian-listed U.S. cannabis companies and provides clarity to investors that regulators expect the risk assessment and determination on whether to allow for the listing of these companies to remain at the discretion of each exchange. CSE-listed cannabis stocks with U.S. exposure are currently trading at roughly the same valuation multiple (~5.3x forward EV/EBITDA) as the weeks following the introduction of the CDS overhang and at a steep >60% discount to Canadian LPs. Although Bottomley believes a discount to LPs is warranted (as US companies face higher regulatory risks and typically operate in much more complex environments compared to Canada), he believes the magnitude of this discount is somewhat overdone and there is a potential for a near-term valuation re-rating."