Note: Weekend Limited won the POT Ticker Lottery on January 30th, 2019.
January 30th should be an interesting day on the Canadian Exchanges. While investors generally watch the markets to see how stocks are doing, on Wednesday, it will be more about what a particular stock ticker symbol. With numerous cannabis firms interested in the soon-to-be-available “POT” stock symbol, four exchanges will be holding a lottery for the right to trade under the name.
POT was once the symbol for the Potash Corp., which merged with Agrium Inc. and became Nutrien Ltd. in early 2018. That company now trades under the “NTR” ticker. The “POT” ticker will officially be eligible for use by another company on February 1st, leading plenty of cannabis companies clamoring for the perfect moniker.
To be considered for the symbol, interested parties must contact their current exchanges or exchanges where they hope to be listed by 5 PM on January 29th to be included in the lottery. The Canadian Securities Exchange, TSX Venture Exchange, Toronto Stock Exchange, and Aequitas NEO Exchange are all participating in the random lottery. Interested parties have not made their interest public, though from the fact that the lottery has been made public, we can assume several Canadian cannabis companies have their eye on the mark.
Why Do Companies Want the POT Symbol?
Some consumers may wonder why reputable cannabis companies want the “POT” symbol. With a push towards less stigmatized language and images to match the legalization and normalization of cannabis, why choose a word that may still carry negative connotations? After all, it took over a decade of legal medical marijuana and plenty of hard work by cannabis activists before legal recreational cannabis became law.
Setting aside the “stoner” image, however, it’s easy to see how simple “POT” is. For a cannabis company, it’s easily recognizable. Plus, there may be one other surprising benefit. Because POT is a pronounceable symbol, meaning it can easily read as a word without adding additional sounds or characters, it may actually perform better on stock exchanges. Sound crazy? Well, there’s data to back it up.
Having a symbol like “POT” may give cannabis companies a boost when they first start trading on a stock exchange because of unconscious bias. When we see the three letters together, P-O-T, we easily read it. We don’t have to think about it too hard, and this creates a positive association, though one that we aren’t aware of. While this initial post-IPO boost does wear off, companies with pronounceable or simpler names do tend to do better on the stock market in general.
We took a quick look at the cannabis companies listed on the Toronto Stock Exchange and found that of the 22 companies currently listed, only 7 had pronounceable names (including, WEED, FIRE, and SEED). It seems smart, then, to get on the POT bandwagon and throw one’s hat into the ticker lottery.
What Happens to the Lottery Losers?
For companies that are already on the exchanges, losing the lottery likely won’t have any effect, especially if their participation isn’t publicized. They will continue to trade under their current symbols, which are hopefully “readable,” unless they change their company name or merge with another company. At that point, they may also change their stock ticker symbol.
What Happens to the POT Winner?
The company that wins the right to trade under the POT symbol will need to either publicize their new symbol if they’re already on the exchanges or begin trading under that symbol after their IPO. It will be interesting to see who’s thrown their hat in the ring to win the POT symbol!