Sunday , 21 April 2024

Americans: Use CUSIP Numbers When Buying Canadian Exchange Listed Cannabis Stocks – Here’s Why & How

It is easy for Canadian investors to execute orders for cannabis stocks using their Canadian symbol but it is not as straight forward for those 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.

By Lorimer Wilson, editor on – Your KEY To Making Money!

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.

To that end, never ‘ask’ your broker if they will execute your order to buy that marijuana stock you want to buy. Instead, ‘tell’ them exactly what you want them to do and below are exactly what instructions you should give your broker to purchase that pot stock that you want.

To place an order to buy/sell such stocks you should say the following to your broker:

  1. “I want to buy/sell ‘x’ number of shares of XYZ Pot Company, which has the CUSIP number of 123456789” (and because cannabis stocks, like many small cap stocks, often have very little demand and, as such, usually have a big spread between the ‘bid’ price at which you are willing to make a purchase and the ‘ask’ price at which you are willing to sell, it is imperative that you specify the price you are prepared to buy or sell marijuana stocks by saying to your broker that
  2. “I want to limit the price I pay to $x.xx Canadian” (you will be buying such shares, most likely, in Canadian dollars so make use of a currency conversion site to get the current U.S. dollar to Canadian dollar exchange rate) “which will be good until cancelled”
  3. or “I want to sell ‘x’ number of XYZ Pot Company shares, which has a CUSIP number of 123456789, at no less than $y.yy in Canadian dollars” and again add the words “which will be good until cancelled” or “until the close of business today” if you want the opportunity to re-assess your ask price at the end of the day. (Please note that the price for the most recent bid or ask price should not be used as a basis for establishing a new bid or ask price because that price will just be the last trade in the U.S. and therefore may be days, weeks or even months old compared to the bid and ask prices on the more active Canadian exchanges. In such situations you should visit here for the up-to-the-minute bid and ask prices, as quoted in Canadian dollars.)

Ask your broker to confirm the order by reading the order back to you and it’s done. It is as simple as that!

Where Does One Find A Stock’s CUSIP Number?

There are now a number of resources that can be used to find and access CUSIP numbers, namely:

  1. Go to quantumonline and follow the instructions provided,
  2. Visit the company’s website where such information is often, but not always, provide or
  3. Do a google search using the company’s name and the words “CUSIP number”.

There you have it. I trust the above information helps you invest easily in the many marijuana stocks that are listed exclusively on Canadian stock exchanges.