Pot Stocks, ETFs, Top News And Data From The Cannabis Industry This Week

This was a very active week in the cannabis capital markets, with Cronos Group reporting earnings, Canopy Growth applying to trade on the NYSE, Aurora Cannabis acquiring MedReleaf in the largest cannabis deal in history and GTI announcing intentions to go public in Canada.

The news drove the United States Marijuana Index, which tracks 17 of the largest marijuana stocks in the U.S., up almost 5 percent. Meanwhile, the North American Marijuana Index, which also includes Canadian stocks, posted gains of less than 1 percent.

The Horizons Marijuana Life Sciences Index ETF HMLSF gained 3 percent over the five days of the week, while the ETFMG Alternative Harvest ETF MJ rose 1 percent. The SPDR S&P 500 ETF Trust SPY slipped 0.55 percent.

“The Canadian market is becoming a land grab and Aurora is spending big bucks to get as much market share as possible,” Green Market Report co-founder and CEO Debra Borchardt said in reference to the Aurora-MedReleaf deal. “[Aurora] paid a premium for MedReleaf, but critics say that Aurora needed the high-quality product the MedReleaf is known for.”

Discussing the Canopy Growth NYSE application, she added, “This is huge as it signals that the major exchanges are loosening up when it comes to cannabis. It is also coming on the heels of Cronos Group listing at the NASDAQ. Cronos Group was also amongst a big group of cannabis companies that reported earnings this week. Many of them delivered revenue increases in the triple digits, but not all of them managed to report profitability.”

Borchardt highlighted a big report out this week from the New York City Comptroller, “who estimates that the New York State market for cannabis could reach $3.1 billion – and $1.1 billion could come from New York City alone. New York politicians all seem to be moving closer to supporting legalization."

Jon Levine, CFO of MariMed Inc MRMD added, “We believe there are two important factors that are currently driving cannabis stock prices. The first is the bipartisan Congressional bill proposing to cement state rights to determine their own cannabis regulation. The second is this week’s Supreme Court allowance of state-authorized sports gambling, which is a states’ rights issue.

“The US Constitution’s 10th amendment states that powers not delegated to the United States by the Constitution are reserved to the states respectively. Sports betting is not in the constitution and neither is cannabis. With Justice Samuel Alito’s decision this week that the Constitution did not grant the federal government the power to prohibit states from acting as they saw fit regarding sports betting, the same legal argument can be applied to cannabis. Some astute investors may be seeing this as a green light for reducing the risk of investing in cannabis.”

Stock Moves

Here are some of the top marijuana stocks in U.S. exchanges and how the performed this week:

• 22nd Century Group Inc XXII: down 10.5 percent
• Aphria Inc APHQF: up 6.4 percent
• Aurora Cannabis Inc ACBFF: down 2.9 percent
• Cannabis Sativa Inc CBDS: up 3 percent
• CannTrust Holdings Inc CNTTF: down 7.2 percent
• Canopy Growth Corp TWMJF: up 17.6 percent
• Cronos Group Inc. CRON: up 1.8 percent
• GW Pharmaceuticals PLC- ADR GWPH: up 6 percent
• Hiku Brands Company LtdDJACF: up 3.4 percent
• India Globalization Capital, Inc. IGC: up 0.5 percent
• MassRoots Inc MSRT: up 9.4 percent
• MedReleaf CorpMEDFF: down 2 percent
• Scotts Miracle-Gro Co SMG: up 5.85 percent
• THC Biomed Intl Ltd THCBF: up 0.9 percent
• Zynerba Pharmaceuticals Inc ZYNE: up 11 percent

In Other News

Leading cannabis industry data, analytics and business intelligence firm New Frontier Data announced it has partnered with Benzinga to bring its readers the latest information to our finance-savvy readers.

“New Frontier Data is the industry standard for cannabis data reporting, and this exclusive partnership enhances Benzinga’s established reputation for providing actionable insights that drive profits for its readers,” said Benzinga CEO Jason Raznick. “It’s fitting for New Frontier Data to provide the first-ever cannabis overview to the leadership of the financial services space at today’s Global FinTech Awards in New York.”

Cronos Group posted first-quarter revenue of $2.9 million, up from $500,000 in the same period last year.

Following the steps of Cronos Group, which recently started trading on the Nasdaq, Canadian grower Canopy Growth applied to list its stock in the NYSE.

“We believe a Canopy Growth listing on the NYSE is significant for the Cannabis Industry not only because it would set a precedent and could serve as a catalyst for other ‘plant touching’ businesses to follow, but also (1) could provide added liquidity / currency for future acquisitions by Canopy Growth and (2) on the flip side, could make it easier for Constellation Brands STZ to increase its stake in Canopy Growth (or facilitate a share purchase by any other comparable suitor),” GreenWave Advisors’ Founder and Managing Partner Matt Karnes told Benzinga.

Aurora Cannabis announced it will acquire MedReleaf for C$3.2 billion ($2.51 billion). This marks the largest deal in cannabis history, and will create the biggest company among legal operators.

“This is the second large acquisition of the year for us after acquiring CanniMed,” Aurora Cannabis’ Chief Corporate Officer, Cam Battley told Benzinga. “This deal is about complementary assets. It’s about having similar and aligned philosophies and strategic visions. That is the case with MedReleaf. They are an ideal acquisitions for us and they add to our capabilities enormously.

“What we want to do is be active in every segment of the cannabis space and we are now incredibly integrated. We have a design and engineering division that builds the most advanced cannabis production facilities in the world and we are obviously very much into cannabis production.”

Green Thumb Industries (GTI) entered into a Letter of Intent with a Canadian company for a reverse takeover (RTO) that will result in GTI becoming a publicly traded company on the Canadian Securities Exchange. The deal is expected to close next month. With a vertically integrated supply chain, GTI manufactures and sells a well-rounded suite of branded cannabis products and owns and operates seven manufacturing facilities and a chain of retail locations in six highly regulated, limited supply U.S. markets.

“This milestone is important and will allow us to more efficiently execute on our growth strategy. One of our priorities is to continue to build brands as we think brands distributed at scale will win,” GTI Founder and Chairman, Jim Beam heir Ben Kovler told Benzinga. “But this doesn't change our main focus, which is providing excellent care, effective medicine and quality products to our patients and customers.”

Licensed cannabis production facilities owner and operator iAnthus Capital Holdings Inc ITHUF announced a $50 million investment from Gotham Green Partners. Management believes this is the largest investment to date by a single investor in a publicly traded U.S. cannabis operating company. iAnthus plans to allocate the proceeds of this financing to repay a $20 million one-year note and accrued interest to VCP Bridge LLC; continue to build out cultivation facilities and dispensaries in the New York and Florida markets; and, potentially, to expand activities. The remaining expenditures for completing iAnthus’ Massachusetts and Vermont operations will be funded with current cash on hand, management assured.

Viridian Capital Advisors (through its broker dealer Pickwick Capital Partners, LLC, a member of FINRA/SIPC), closed on a $6.5 million financing for Gloucester Street Capital, an owner of one of only 10 medical cannabis cultivation and dispensary licenses in New York State. With the third largest population in the U.S., the New York State market for medical cannabis is expected to be among the largest in the country.

Gloucester Street Capital’s seeks to bring its proprietary manufacturing processes, compassionate patient care delivery systems and go-to-market strategies to the production and delivery of pharmaceutical-grade medical cannabis.

Montel Williams’ Lenitiv Scientific debuted it’s new line of hemp-derived CBD products and announced a deal with Cura Cannabis Solutionsto produce both Lenitiv’s hemp-derived CBD line as well as its cannabis-derived line. Lenitiv will also launch its next-gen line of cannabis oils this summer. 

“Lenitiv is the culmination of everything I’ve learned about cannabis and CBD since my diagnosis,” Montel Williams told Benzinga. “It’s not just something I put my name on – I’m actively involved in the formulation process from start to finish. I’m really excited to have Cura on board to produce our products because they understand the values that underpin them.”

Cannabis-focused debit payments solutions company CanPay started offering e-commerce payments processing. In addition to expanding payments online, CanPay has doubled the number of states it operates in nationwide to 14, including New York, Pennsylvania, Massachusetts, New Hampshire, Michigan and New Mexico, serves tens of thousands of users across 120 retail dispensaries, and integrates with leading POS systems OMMPOS and LeafLogix.

“The Cole Memo being rescinded caused a lot of market uncertainty in the first part of 2018. Now that the dust has settled, we’re seeing more and more financial institutions come forward to serve the industry through compliant cannabis banking programs. We’re also seeing more retail operators demand transparent, stable, and legitimate payment services to operate above reproach,” said Dustin Eide, CEO of CanPay. “The rapid expansion of CanPay’s services to-date is a testament not only to overall industry growth, but the massive need we’re able to fulfill by de-cashing cannabis purchases.”

Former Marine Bryant Burton announced the debut of Skama Tek, a portable dabs vaporizers maker that donates a device to a veteran for every one that is sold.

Studio City cannabis retailer Wellness Earth Energy Dispensary (WEED) announced a collaboration with renowned pop artist and LGBTQ+ advocate, Nina Palomba. Palomba will install a collection of artwork, “Love and Light,” at the dispensary, remaining on show from June 4 to July 15.

Just days before the royal wedding, Leafbuyer.com unveiled ‘Markle Sparkle,’ a new cannabis strain developed by the nephew of soon-to-be-royal Meghan Markle, Tyler Dooley. The product, in flower and concentrate form, will be officially unveiled on June 2 at the High Times Cannabis Cup in Northern California. This sativa-dominant hybrid that helps relieve pain, anxiety and insomnia. “We’re thrilled Mr. Dooley chose Leafbuyer to help launch his new ‘royal’ strain,” said Kurt Rossner, CEO of Leafbuyer Technologies Inc LBUY.

FLRish Inc., the management company behind Harborside retail dispensaries and brands, and a cultivation facility in California, announced a $5 million qualified equity financing. Proceeds will be used to fund the expansion of FLRish’s retail management platform to additional client dispensaries, continue the build-out of its cultivation facility, and for general working capital and corporate development purposes.

Cannabis-focused payment solutions platform Alt Thirty Six announced a partnership with software technology provider WebJoint. The companies will work closely together to strategically identify ways to deploy systems out to the cannabis market, with an ultimate goal to take it fully cashless.

WebJoint will implement its software with Alt Thirty Six’s application programming interface, allowing the two programs to seamlessly communicate with each other. As a result, WebJoint’s clients will have the option to accept digital payments through Alt Thirty Six’s platform, which uses Dash digital currency as an alternative to cash. The company’s blockchain technology allows for payment transactions to process instantaneously, eliminating the risk typically associated with cryptocurrency transactions and market volatility.

Yield Growth announced the debut of Juve Wellness, a subsidiary focused on the research and development of a modern wellness brand infused with Ayurvedic insights.

“We anticipate that we will be the first topical brand focused on the intersection of Ayurvedic principles and legal cannabis to go to market. Licensees will have the option to infuse the Juve Wellness products with cannabis or distribute them without,” said Penny Green, CEO of The Yield Growth Corp.

Boulder-based Green Dot Labs released its first-ever vape cartridge, the Black Label Full Spectrum Extract (FSE) Cart. The Black Label FSE Cart borrows from the world of live resin concentrates to deliver a distinctive, easy to use concentrate experience. While most pens on the market today are marketed using generalized terms like Sativa and Hybrid or supposed effect, Green Dot Labs is releasing dozens of varietal-specific cartridges featuring rare and proprietary cultivars from the company’s genetic library.

“We have always operated under the belief that hydrocarbon extracts are the purest, most authentic representation of the cannabis plant’s vivid sensory profile and myriad wellness benefits, and we wanted our varietal-specific pens to reflect that,” CEO Alana Malone told Benzinga.

The industry witnessed the debut of The High Finance Fund, a women run, $20 million equity fund focused on the industrial hemp and cannabis industry. Managed by Wendy Robbins and Karen Paull, the producers of the popular series “The Marijuana Show,” which runs on Amazon Prime, the fund is interested in investing in industrial hemp cultivation, processing, system roadblocks and solutions, and international CBD wholesale and retail deals. It will also fund non-plant touching cannabis and real estate deals. The opportunities the fund choose are based on data, trends, commercial viability, intellectual property, assets, ability to scale globally, solid management teams with proven track records, leading scientific methods, and brands with broad consumer appeal.

“We focus on hemp, real estate and ancillary products.  Since we produce the marijuana show we are pitched thousands of businesses. Our advisors have global access to private and exclusive deals,” Robbins said. “Many analysts agree that hemp will become a better investment then marijuana. You can’t get high from hemp; it has less then 0.3 percent THC, which is what is psychoactive. 34 states passed industrial hemp laws since the Farm Bill was passed in 2014.”

Learn more about these news, and others on CV Sciences Inc CVSI, MariMed and GrowGeneration Corp GRWG with our partners at Green Market Report’s Marijuana Money:

Interesting Data

New Frontier Data and Viridian Capital Advisors revealed which sub-sectors in the cannabis industry are witnessing the largest investments in 2018 and how these investments are impacting valuations.

“Surging investment activity among each of those sectors heightens the premium for accurate business valuations,” New Frontier Data explains.

Between 2015 and 2017 valuations for:

• Cultivation and Retail were UP 11.5x
• Biotech/Pharma were UP 1.35x
• Investment/M&A were UP 3.47x
• Software and Media were UP 5.36x
• Consumption Devices were UP 1.02x
• Infused Products & Extracts were DOWN -4.33x
• Real Estate were UP 5.57x

 

Cannabis journalists seeking to connect with expert sources and businesses can now use AxisWire’s STAR (Submit to a Reporter) Source Locator service. This service is free for journalist and available to publicists and brands for a small monthly subscription fee.

Events Calendar

May 18: WebJoint is hosting the California Cannabis Awards in Los Angeles. The CAAs is a high-end event geared towards nominating and awarding the top companies, entrepreneurs and advocates in the cannabis industry. Check out details and nominees following this link.

May 18: Organizers for one of the largest cannabis culture events in the world, The Emerald Cup, announced tickets for this year’s gathering, taking place December 15 and December 16 in Santa Rosa, California, will be available starting Friday. The Cup will feature acclaimed musical acts, presentations from experts, artists, and educators across the industry, product and flower judging across multiple categories, and incredible food, vendors, products, and entertainment.

May 19 – May 20: The 7th CannaGrow Expo will take place in Palm Springs, California, featuring more than 35 cultivation-focused educational sessions and an expo hall filled with cannabis-related technologies. In addition, the event will include a special Extraction Summit. Pass prices range from $99 - $399. For more info visit their website.

May 22: Industry Power Women and IC3 are hosting a brunch to close the The 2nd Institutional Capital & Cannabis Conference (West) at the J.W. Marriott Los Angeles. Interested parties and sponsors can email the organizers to get more information clicking here.

May 30 – May 31: Former Mexican President Vicente Fox announced his own cannabis event, CannaMexico. This world summit will take place in Guanajuato, Mexico. Speakers include Mr. Fox, activist Cheryl Shuman and many others. See details here.

August 17 – August 18: Benzinga is hosting its first Cannabis Capital Conference in Toronto, Canada. Speakers include 420 Investor Alan Brochstein, MedMen’s CEO Brett Roper and Lewis Goldberg of KCSA. Read all about it here.

Picture by Javier Hasse.