The federal regulatory landscape governing cannabis in the United States is undergoing its most significant transformation in over fifty years. 

• On December 18, 2025, President Trump signed an Executive Order directing the Department of Justice to expedite the reclassification of marijuana from Schedule I to Schedule III under the Controlled Substances Act.
• On April 23, 2026, as previously reported, the DOJ issued a final order rescheduling FDA-approved marijuana products and state-licensed medical marijuana to Schedule III.
• An expedited administrative hearing beginning June 29, 2026, will consider broader rescheduling. 

For cannabis company executives and their legal advisors, these developments raise urgent questions about whether Nasdaq and the NYSE will permit the listing of U.S. plant-touching operators, and what companies should do now to prepare. This post examines the current posture of Nasdaq and NYSE and details their quantitative and qualitative listing standards—presented in comparative tables below. With that as a backdrop, we address some practical challenges and actionable guidance for management teams positioning for a potential uplisting window.

The Current Exchange Posture: Why Cannabis Companies Remain Locked Out

Nasdaq and the NYSE have long refused to list companies whose current or planned activities violate U.S. federal law. Nasdaq’s position has been particularly explicit: it “cannot initially list or continue the listing of a company whose current or planned activities are in violation of U.S. federal law or the law in a jurisdiction where the company operates.” This posture is reinforced by the federal anti-money laundering framework applicable to financial transactions involving marijuana-related businesses. 

The practical consequence is that the largest U.S. multistate operators trade on Canadian exchanges and OTC markets rather than on NYSE or Nasdaq, limiting their access to deeper liquidity, broader institutional participation, and sell-side analyst coverage. The exchanges have, however, permitted listings for Canadian cannabis issuers as well as U.S. entities that have businesses ancillary to the cannabis industry, a distinction that reflects the continuing federal-law barrier that impacts U.S. plant-touching operators. 

Rescheduling changes the calculus but does not eliminate the barrier entirely. Even under Schedule III, marijuana remains a controlled substance, and manufacturing, distributing, or dispensing it still requires DEA registration. The April 2026 order is narrower than many industry participants appreciate: it creates a two-tier framework in which state-licensed medical marijuana is now Schedule III while adult-use marijuana, unlicensed marijuana, and synthetic THC remain Schedule I. U.S. exchanges, if they reconsider their position regarding the listing of companies with U.S. plant-touching businesses in light of rescheduling, may only be willing to list companies that can establish their businesses are directed solely to Schedule III-compliant activities. However, the regulatory trajectory is clear, and companies that prepare now will be best positioned if and when the listing window opens.

Nasdaq Initial Listing Standards: A Three-Tier Framework

The Three Market Tiers

The Nasdaq Stock Market operates three distinctive tiers: the Nasdaq Global Select Market, the Nasdaq Global Market, and the Nasdaq Capital Market. Applicants must satisfy financial, liquidity, and corporate governance requirements to be approved for listing on any tier, with the financial and liquidity requirements for the Global Select Market being the most stringent, followed by the Global Market and then the Capital Market. Corporate governance requirements are uniform across all three tiers. Nasdaq also retains broad discretion to deny initial listing or apply additional conditions even when all enumerated criteria are met, if necessary to protect investors and the public interest. This discretionary authority is particularly relevant in the cannabis context, where Nasdaq may impose conditions beyond the quantitative standards.

Nasdaq Global Select Market

The Global Select Market imposes the highest financial and liquidity thresholds. A company must satisfy all of the criteria under at least one of four financial standards and the applicable liquidity requirements. The table below summarizes the key financial and liquidity requirements for initial listing.

Table 1: Nasdaq Global Select Market — Initial Listing Standards

 

Requirement	Standard 1: Earnings	Standard 2: Capitalization with Cash Flow	Standard 3: Capitalization with Revenue	Standard 4: Assets with Equity
Pre-Tax Earnings	Aggregate prior 3 FY > $11M; each of prior 3 FY > $0; each of 2 most recent FY > $2.2M	_	_	_
Cash Flows	_	Aggregate prior 3 FY > $27.5M; each of prior 3 FY > $0	_	_
Market Capitalization	_	Average > $550M over prior 12 months	Average > $850M over prior 12 months	$160M
Revenue	_	Previous FY > $110M	Previous FY > $90M	_
Total Assets	_	_	_	$80M
Stockholders’ Equity	_	_	_	$55M
Bid Price	$4.00	$4.00	$4.00	$4.00
Unrestricted Publicly Held Shares	1,250,000	1,250,000	1,250,000	1,250,000
MV of Unrestricted Publicly Held Shares (IPO/Spin-Off)	$45M	$45M	$45M	$45M
Round Lot Shareholders	450	450	450	450
Market Makers	3 or 4 (depending on standard)	3 or 4	3 or 4	3 or 4

Notes: MV = Market Value; FY = Fiscal Year; M = million. For seasoned companies and direct listings, higher MVUPHS thresholds apply (up to $110M). The company must have four registered and active market makers unless it satisfies the Income Standard or Equity Standard of the Global Market, in which case three are required. Source: Nasdaq Initial Listing Guide (January 2026).

Given the magnitude of these thresholds—particularly the market capitalization and earnings requirements—only the very largest U.S. cannabis operators would be candidates for the Global Select Market. Most cannabis companies exploring a Nasdaq listing will therefore focus on the Global Market or Capital Market tiers.

Nasdaq Global Market

The Global Market provides a more accessible entry point while still requiring meaningful financial performance. A company must meet all criteria under at least one of four standards. 

Table 2: Nasdaq Global Market — Initial Listing Standards

 

Requirement	Income Standard	Equity Standard	Market Value Standard	Total Assets/Total Revenue Standard
Pre-Tax Income (latest FY or 2 of last 3 FY)	$1M	_	_	_
Stockholders’ Equity	$15M	$30M	_	_
MV of Listed Securities	_	_	$75M	_
Total Assets and Total Revenue (latest FY or 2 of last 3 FY)	_	_	_	$75M and $75M
Unrestricted Publicly Held Shares	1.1M	1.1M	1.1M	1.1M
MV of Unrestricted Publicly Held Shares	$15M	$18M	$20M	$20M
Bid Price	$4.00	$4.00	$4.00	$4.00
Round Lot Shareholders	400	400	400	400
Market Makers	3	3	4	4
Operating History	_	2 years	_	_

Notes: Companies qualifying solely under the Market Value Standard must meet the $75M MV of listed securities and $4.00 bid price for 90 consecutive trading days before applying. Companies listing via IPO must meet MVUPHS solely with offering proceeds. Nasdaq recently increased the MVUPHS under the Income Standard from $8M to $15M (effective 2025). Source: Nasdaq Initial Listing Guide (January 2026).

The recent increase in the MVUPHS threshold under the Income Standard—from $8 million to $15 million—is noteworthy for cannabis companies, as it effectively narrows the lowest-bar path onto the Global Market and aligns the MVUPHS requirement across listing standards. Nasdaq adopted this change after observing problematic trading in companies with low public floats and concerns that issuers with minimal liquidity would not trade in a manner supportive of price discovery. 

Nasdaq Capital Market

The Capital Market tier is designed for smaller-capitalization companies and offers the lowest financial thresholds. It would be the most realistic initial listing target for many cannabis operators.

Table 3: Nasdaq Capital Market — Initial Listing Standards

 

Requirement	Equity Standard	Market Value of Listed Securities Standard	Net Income Standard
Stockholders’ Equity	$5M	$4M	$4M
MV of Unrestricted Publicly Held Shares	$15M	$15M	$15M
Operating History	2 years	_	_
MV of Listed Securities	_	$50M	_
Net Income (latest FY or 2 of last 3 FY)	_	_	$750,000
Unrestricted Publicly Held Shares	1M	1M	1M
Round Lot Shareholders	300	300	300
Market Makers	3	3	3
Bid Price (or Closing Price alternative)	$4.00 (or $3.00)	$4.00 (or $2.00)	$4.00 (or $3.00)

Notes: The closing price alternative requires additional conditions, including net tangible assets of $5M (or $2M with a three-year operating history), or average annual revenues of $6M for three years. The MVUPHS threshold was recently unified at $15M across all Capital Market standards following an increase under the Net Income Standard from $5M (effective 2025). Source: Nasdaq Initial Listing Guide (January 2026).

The elimination of Section 280E for qualifying Schedule III medical marijuana operations should materially improve the reported earnings and stockholders’ equity of affected operators, which may help some cannabis companies clear the Net Income or Equity Standard thresholds that would have been out of reach under the prior tax regime. 

Corporate Governance Requirements

Nasdaq imposes uniform corporate governance requirements across all tiers. These governance rules generally require a majority of independent directors on the board, an independent audit committee with at least three members (each financially literate and one qualifying as a financial expert), an independent compensation committee, and an independent nominating committee or equivalent (including the independent members of the board). Companies must also adopt a code of conduct, solicit proxies and provide proxy statements for all shareholder meetings, maintain a quorum of at least 33⅓% of outstanding voting stock conduct audit committee review of all related-party transactions, and obtain shareholder approval for certain issuances including change-of-control transactions and 20% issuances below the minimum price for non-public offerings. Restrictions also prohibit corporate actions that disparately reduce or restrict voting rights of existing shareholders. 

NYSE Initial Listing Standards: Higher Financial Bars, Similar Price Requirements

Quantitative Financial and Distribution Standards

The NYSE’s quantitative initial listing standards are generally more demanding than Nasdaq’s lower tiers, particularly with respect to financial performance and market value of publicly held shares. The NYSE requires a company to satisfy one of several financial tests and all of the applicable distribution standards. The table below presents the key initial listing requirements for domestic operating companies.

Table 4: NYSE — Initial Listing Standards for Domestic Operating Companies

Category	Requirement	Threshold
Financial Standards (satisfy one)
Earnings Test (Rule 102.01C(I))	Adjusted pre-tax income, total for last 3 FY ≥ $10M; each FY > $0; last 2 FY ≥ $2M each	OR adjusted pre-tax income, total for last 3 FY ≥ $12M; most recent FY > $5M; next most recent FY ≥ $2M
Global Market Capitalization Test (Rule 102.01C(II))	Global market capitalization of at least $200M	Currently-traded companies must also maintain $200M market cap and $4.00 closing price for at least 90 consecutive trading days prior to applying
Distribution Standards (satisfy all)
Round Lot Holders	400 holders of 100+ shares (in North America for domestic companies)
Publicly Held Shares	1.1 million shares (excluding shares held by directors, officers, and 10%+ holders
MV of Publicly Held Shares	$40M for IPO/spin-off companies; $100M for all other listing types
Share Price	$4.00 (IPO price for new offerings; closing price for transfers)

Notes: Foreign private issuers may qualify under alternate financial standards (see Section 103.01 of the NYSE Listed Company Manual). The NYSE has broad discretion in listing decisions; meeting quantitative standards does not guarantee approval. Source: NYSE Initial Listing Standards Summary (January 2026).

Several features of the NYSE standards warrant particular attention for cannabis companies. The $100 million market value of publicly held shares required for companies transferring a listing (as opposed to an initial public offering) is a substantially higher bar than the $40 million IPO threshold and considerably exceeds Nasdaq’s comparable requirements. The Earnings Test also demands a longer and more consistent track record of profitability than any of Nasdaq’s standards, requiring positive pre-tax earnings in each of the last three fiscal years and aggregate earnings of at least $10 million. These requirements may make the NYSE a more challenging target for cannabis operators with shorter profitability histories, though the elimination of Section 280E obligations for Schedule III-qualifying operations will improve the earnings picture for many companies.

Corporate Governance Requirements

NYSE-listed companies must satisfy corporate governance requirements set forth in Section 303A of the NYSE Listed Company Manual. These require an audit committee of independent directors, an internal audit function, annual CEO/CFO certifications, required review of auditor relationships,  and clawback policies for erroneously awarded incentive-based compensation. NYSE and Nasdaq listing standards for board composition, committee structures, internal controls, and audited financial statements materially exceed OTC requirements, and these upgrades can require significant lead time to implement properly. 

The Reverse Stock Split Issue: Meeting the $4.00 Minimum

The Share Price Gap

Perhaps the most immediate and tangible obstacle for many cannabis companies seeking an exchange listing is the minimum share price requirement. As Tables 1 through 4 demonstrate, both Nasdaq and the NYSE require a minimum price of $4.00 per share at the time of initial listing. Many publicly traded U.S. cannabis companies currently trading on OTC markets or Canadian exchanges carry share prices well below this threshold, a consequence of years of sector-wide valuation compression driven by federal illegality, Section 280E tax burdens, limited institutional participation, and restricted access to traditional capital markets. 

Companies are already taking steps to address this issue. Curaleaf Holdings, one of the largest U.S. multistate operators, announced on May 26, 2026, that it would execute a 1-for-3 reverse stock split specifically in preparation for a potential U.S. exchange uplisting. The company stated the move followed consultation with major U.S. stock exchanges and was designed to meet their share-price threshold requirements. 

How a Reverse Stock Split Works

A reverse stock split consolidates a company’s outstanding shares into a smaller number of shares, proportionally increasing the per-share price without changing overall market capitalization. For example, in a 1-for-3 reverse split, every three existing shares become one new share, tripling the per-share price. The mechanism is straightforward, but it does not create new enterprise value—it is purely a structural adjustment to achieve compliance with exchange minimum price requirements. 

For cannabis companies, the reverse split ratio must be calibrated carefully. The selected ratio should produce a post-split price comfortably above $4.00 to account for potential post-announcement price volatility and to demonstrate to the exchange that the company can sustain the minimum price requirement over time. Companies should also consider whether the reverse split will affect their ability to meet distribution requirements, since reducing the share count may reduce the number of round lot holders if some shareholders fall below the 100-share threshold post-split. This is especially relevant given the 300-to-450 round lot holder minimums set out in the exchange standards. 

Legal, Structural, and Shareholder Considerations

Executing a reverse stock split involves several material legal and governance steps. Board approval is typically required as the initial corporate action, and most companies will need to obtain shareholder approval because the reverse split usually requires an amendment to the company’s articles or certificate of incorporation to effect the share consolidation. The proxy statement or information circular soliciting shareholder approval must comply with SEC disclosure requirements, including a description of the reasons for the split, the approved ratio or range of ratios, the effect on outstanding shares and capital structure, and any potential material consequences such as fractional share treatment.

Timing is a critical consideration. Cannabis companies should not wait until the listing window opens to initiate these steps. The proxy solicitation process, including preparation, SEC review, mailing, and the shareholder vote, can take between 60 to 90 days or more. Companies incorporated in jurisdictions requiring advance notice of shareholder meetings must plan accordingly. Additionally, Canadian-incorporated companies that trade on the TSX or CSE will need conditional approval from those exchanges before effecting the split, as demonstrated by Curaleaf’s recent experience. 

Tax considerations for shareholders are generally minimal in a reverse stock split because it is not a taxable event for U.S. federal income tax purposes (shareholders simply adjust their per-share cost basis), but companies should confirm this treatment with tax counsel. Companies should also address fractional shares: most reverse splits provide for either rounding up fractional shares or cashing out fractional interests at fair market value.

Preparation Recommendations: Positioning for Exchange Eligibility

Assessing Financials Against Exchange Thresholds

Cannabis companies and their advisors should begin mapping their current financial performance against the specific quantitative standards set out in Tables 1 through 4 above. This analysis should identify which exchange and which listing standard the company is most likely to satisfy, and what gaps remain. The elimination of Section 280E for qualifying Schedule III medical marijuana operations will materially improve the reported earnings and cash flows of affected operators, which should be modeled into any listing-readiness analysis. 

Assessing Share Price and Capital Structure

As discussed above, companies should evaluate their current share price relative to the $4.00 minimum and determine whether a reverse stock split is necessary or advisable. This assessment should include modeling various split ratios, analyzing the impact on the shareholder base and distribution standards, and considering whether the post-split float and market value will satisfy the MVUPHS requirements—now set at $15 million across all Nasdaq Capital Market standards and $40 million or more at the NYSE. Companies should also undertake a broader capital-structure cleanup: simplifying the cap table, identifying investor consent rights, redemption rights, registration rights, convertible securities, warrants, options, preferred equity, anti-dilution provisions, debt covenants, change-of-control restrictions, and affiliate arrangements that may impede a listing transaction. 

Reviewing Corporate Governance and Board Composition

NYSE and Nasdaq governance requirements are materially more demanding than what OTC-traded or Canadian exchange-traded companies typically maintain. Companies should assess their current board composition against exchange independence requirements, establish or formalize audit, compensation, and nominating committees, adopt compliant codes of conduct and ethics, implement clawback policies, and ensure proxy solicitation procedures meet exchange standards. These upgrades often require recruiting additional independent directors with appropriate financial literacy and industry experience, which takes time.

Conclusion: A Narrowing Gap and the Premium on Preparation

The barriers to exchange listing for U.S. cannabis companies are narrowing, even if full access remains contingent on exchange policy decisions, SEC processes, and federal banking and AML developments. Medical rescheduling is now final. Broader rescheduling is under active review on an expedited hearing schedule. Depending on how these proceedings resolve, the regulatory picture could look materially different within the next twelve months.

For cannabis company management teams, the imperative is clear: use this period to work with securities counsel to identify and address compliance, governance, capital structure, and financial performance gaps so that the company is in a position to move quickly when the listing window opens. Once open, first movers will be best positioned to reap the benefits afforded by a US listing. 

The potential uplisting of major U.S. cannabis operators to Nasdaq or the NYSE would represent a transformative event for the industry—broadening the investor base, improving liquidity, enhancing analyst coverage, and further legitimizing cannabis in the public capital markets. Companies that identify this possibility as an actionable near-term workstream will be rewarded when the regulatory environment finally aligns with the industry’s long-standing capital markets ambitions.