Photo via iStock/scyther5

This week, Canadian firm Cronos Group became the first cannabis company to be listed on a major U.S. stock exchange, marking another milestone in the acceptance of the cannabis industry. Federal law prevents the U.S. financial industry from dealing with any business that directly handles cannabis, which makes it nearly impossible for an American canna-business to trade on the stock market. A few ancillary canna-businesses have managed to get listed, but when cannabis social media company MassRoots attempted to go public in 2016, NASDAQ refused on grounds that the company was aiding and abetting the sale of an illegal substance.

Cronos Group was able to get around these federal restrictions, however, and become the first cannabis producer and retailer to be approved by the Securities and Exchange Commission to trade on the U.S. stock market. The firm was able to accomplish this feat primarily because it is a Canadian company that does not grow, produce, or sell marijuana in the U.S. Still, gaining the SEC's approval was no easy task, and the company spent a year courting NASDAQ while undergoing countless independent audits and reviews.

Because of the legal restrictions preventing Cronos from jumping into the U.S. cannabis market feet first, the company's public stock listing is mainly an attempt to introduce their brand to American investors, who have been increasingly interested in betting their money on the success of Canada's cannabis market. “This is about our shareholders,” Cronos CEO Mike Gorenstein told VICE News. “I will just stress that we do not plan on entering the U.S. market from a production or sales standpoint until cannabis is federally legal.”

Cronos Group is one of the largest players in the Canadian cannabis industry, with a market value of $1.4 billion. In addition to its operations in Canada, the company supplies medical cannabis to Germany, and is also working on new ventures in Israel and Australia. By comparison, Aurora Cannabis and Canopy Growth Corp., two other major players in the Canadian industry, are worth around $305 million and $251 million respectively.

While the U.S. government restricts as many aspects of the legal cannabis industry as it feasibly can, it is still perfectly legal for Americans to invest their cash in the Canadian cannabis market. American canna-businesses, also eager to get in on the Great White North's lucrative recreational market, have started expanding their interests into Canada, and some are even planning to list their stocks on the Canadian Security Exchange.

Although the Canadian cannabis industry is hotly tipped for success, investing in such a new industry is still risky business. Earlier this month, cannabis stocks on the Canadian stock market plummeted in a wave of panic selling, fueled by worries that the market might be overvalued. The BI Canada Cannabis Index fell by 19 percent, while Canopy Growth and Aurora Cannabis saw their stocks fall by more than 40 percent from record highs in January.

Despite the risks involved in the new industry, the expansion of Cronos into the U.S. stock market gives hope that federal restrictions on cannabis will eventually be overturned. “It’s very significant for the company and the whole industry,” Gorenstein said to Bloomberg. “It’s a huge moment — just shows the stigma is continuing to erode on cannabis.”