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While some states have authorized the use and sale of marijuana, it remains illegal under federal law. The federal law relating to marijuana could be enforced at any time, and this would put issuers with U.S. marijuana-related activities at risk of being prosecuted and having their assets seized.

More than two dozen states have legalized medical marijuana, including eight states where marijuana is legal for recreational use.

The CSA’s move provides much-needed clarity for the cannabis industry, which has operated under an unwritten rule that companies which trade on the Toronto Stock Exchange or the TSX Venture Exchange must not invest in the U.S. cannabis sector.

Canadian marijuana companies had largely handled the hazy legality by focusing on markets outside the U.S., or by listing on the smaller and less risk-averse Canadian Securities Exchange.

But after Canadian marijuana producer Aphria, which is listed on the TSX, announced an investment in Florida in April of this year, questions about the official policy mounted and regulators took notice.

The CSE has been more permissive than the TSX, requiring that companies provide risk disclosure for investors. Currently, about half the trading activity on the CSE is involved marijuana-based businesses, said its chief executive Richard Carleton. Of the roughly 50 marijuana-based companies listed on the CSE, about a dozen have U.S. holdings, he added.

Carleton called the CSA’s move an “extremely positive step.”