The Week In Cannabis: Stocks Fall On Poor Earnings, More Americans Support Legalization

Two-thirds of Americans say the use of marijuana should be legal, reflecting a considerable surge over the past decade..

Two-thirds of Americans say the use of marijuana should be legal, reflecting a steady increase over the past decade https://t.co/QoMXjiaUYk pic.twitter.com/V4vLqY3r9f

— Pew Research Fact Tank (@FactTank) November 14, 2019

GW Pharmaceuticals PLC GWPH announced two of its medicines have been recommended by the U.K.’s National Institute for Health and Care Excellence to receive routine reimbursement from the National Health Service. Epidiolex, known as Epidyolex in Europe, and Sativex were approved by the NHS for the treatment of epilepsy and multiple sclerosis, respectively.

These were probably the most upbeat news items in the cannabis and hemp world this week.

The following companies disappointed analysts and investors with their quarterly results and/or guidance (see full coverage for all of these earnings reports in our Cannabis Earnings Portal):

• Canopy Growth Corp CGC
• Neptune Wellness Solutions Inc. NEPT NEPT
• Medicine Man Technologies, Inc. MDCL
• GrowGeneration Corp. GRWG
• Cronos Group Inc. CRON CRON
• Organigram Holdings Inc. OGI OGI
• Aleafia Health Inc. ALEAF ALEF
• MediPharm Labs Corp MEDIF LABS
• Tilray Inc TLRY
• Acreage Holdings, Inc. ACRGF ACRG
• Charlotte's Web Holdings, Inc. CWEB CWBHF
• Sundial Growers Inc. SNDL
• Aurora Cannabis Inc ACB
• Halo Labs Inc. AGEEF
• Canopy Rivers Inc. RIVCNPOF

“It was a huge week for earnings, but shareholders are losing patience with cannabis companies who keep promising that things are going to get better,” Debra Borchardt, CEO of Green Market Report, told Benzinga. “Most were caught off guard with the vape crisis and slow-moving licensing efforts in Canada, as well as the states, causing several big names to miss estimates. Expenses continue to remain elevated and losses are mounting. It feels like a season of Survivor.”

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Business Insider's Jeremy Berke set out to find an answer of his own. He came to the conclusion that “Cannabis companies and investors overextended themselves, driven by exuberance around an emerging market with an attractive story. Most execs say these are temporary speed bumps in the quest to dominate a global industry worth hundreds of billions.”

Cannabis ETFs delivered big losses. Over the last five trading days:

• The Horizons Marijuana Life Sciences Index ETF HMLSF HMMJ was down 17.06 percent.

• The ETFMG Alternative Harvest ETF MJ lost 14.77 percent.

• The AdvisorShares Pure Cannabis ETF YOLO was down 11.95 percent.

• The Cannabis ETF THCX tumbled 16.43 percent.

• The Amplify Seymour Cannabis ETF CNBS lost 14.57 percent.

• The SPDR S&P 500 ETF Trust SPY closed the period up 0.88 percent.

More News From The Week

Following Canopy’s earnings report, Bank of America reiterated a Neutral rating and $23 price objective, while Cantor Fitzgerald reiterated a Neutral rating with a price target of CA$27 ($20.36).

Helix TCS HLIX announced third-quarter results, showing strong organic earnings growth, record software sales numbers and improved cash from operations.

“Our Q3 results detail another quarter of strong operating results that show that we are achieving the most challenging of objectives: growing sales and market share while improving our cash from operations, and moving toward profitability, all with the absolute minimum in investor dilution due to fundraising. I believe that as the market matures and savvy investors seek a real value proposition in the space, we will continue to distinguish ourselves,” a company representative told Benzinga.

NUG opened a new flagship retail store in San Leandro, California. The brand’s first flagship store debuted in Sacramento in March. A key aspect of their latest location is that a percentage of NUG Wellness gross receipts will be donated to their non-profit partner, the Davis Street Family Resource Center.

The Green Organic Dutchman Holdings Ltd. TGOD TGODF announced it has signed arrangements for up to CA$103 million ($77.6 million) in funding that consists of a sale-leaseback agreement for the Ancaster Energy Centre, a convertible equity note term sheet and a construction mortgage loan term sheet.

Vana, a compliant marketing platform for cannabis and CBD businesses, earlier this week announced a partnership with mainstream publishers such as BuzzFeed, Thrillist and USA Today. Certified cannabis brands and retailers will be allowed to legally advertise on mainstream media properties.

Israeli biotechnology company Can-Fite BioPharma Ltd. CANF said its drug candidate Piclidenoson for the treatment of osteoarthritis in mammals has been granted Patent No. 10,265,337 from the U.S. Patent and Trademark Office.

Organic Payment Gateways, a CBD focused payment gateway provider, has joined the National Hemp Association in an effort to support the growing U.S. hemp and CBD industry.

According to Alex Roy, of Organic Payment Gateways, "Businesses, especially new ones, that sell hemp-derived products like CBD oil, skin lotions, creams, and tinctures, benefit substantially through the training and advocacy furnished with the aid of the National Hemp Association. We are proud to help support their efforts via our membership."

Entheogenix Biosciences, jointly founded by ATAI Life Sciences and Cyclica, announced it will apply Cyclica's proprietary AI-platform to design and synthesize novel compounds from psychoactive seed molecules (e.g., psilocybin). The company aims to expand access to emerging mental health therapeutics by first creating shorter acting psychedelics, which will help providers serve more patients, and then better understanding and potentially removing hallucinogenic effects entirely, which could allow those with otherwise disqualifying contraindications to access the benefits of psychoactive compounds.

“Early results around psilocybin and other compounds for mental health disorders have been extremely encouraging, but challenges around scaling persist,” said Florian Brand, CEO of ATAI Life Sciences. “This joint venture aims to bring the benefits of psychedelics to as many people as possible by applying computational biophysics and AI to mental health," added Naheed Kurji, CEO of Cyclica.

Colombian cannabis ingredient company One World Pharma received one of the first THC quotas from the Colombian government. OWP is among the few companies that have received this permission which will allow One World to move into characterization and closer to commercialization.

“All the permissions are now in place for One World Pharma to begin to produce the ingredients to support our Cannabis Futures program,” said Brian Moore, President of One World Pharma. “Receiving this quota says a lot about our team and takes another step closer to our THC production in 2020.”

Wana Brands is partnering with Gofire to combine its distillate blends with Gofire’s SmartCartridge and patented inhaler. This technology enables precision dosing of Wana’s proprietary cannabis distillate.

“This partnership brings together the consistent cannabis experience consumers expect from Wana’s infused products with the Gofire technology that enables consumers to monitor and track their experience. I love the added control that consumers can tap into,” said Wana Brands CEO Nancy Whiteman.

The founder of Money 20/20 and HLTH, announced Growth, a new conference focused on cannabis, that will take place Sept. 21–24, 2020 at Wynn Las Vegas. The event will convene more than 2,000 senior leaders from inside and outside of the cannabis ecosystem to discuss, develop and shape the future of the cannabis industry.

Growth CEO Jake Skinner told Benzinga “many cannabis events today act as echo chambers, so we launched Growth as a platform for key decision makers in cannabis and mainstream businesses to come together to have real conversations, find solutions to industry issues and come up with new innovations.”

Growth raised $5 million in funding from a network of private investors to ensure the event is neutral and not just pay-to-play.

Mary Jane’s Medicinals is bringing it products to Oklahoma thanks to a partnership with Desert Extracts. This follows popular demand as more medical marijuana patients are registered in Oklahoma and cannabis topicals are an effective, yet minimally invasive and non-psychoactive treatment method.

“Topicals have been anecdotally shown to provide relief for everything from skin conditions to sore muscles and joints, and they are a great entry point for canna-curious medical marijuana patients who may be nervous about consuming,” said Dahlia Mertens, founder and CEO of Mary Jane’s Medicinals. “Desert Extracts is a trusted source for Oklahoma dispensaries, so they were the obvious choice to bring Mary Jane’s Medicinals to the Sooner State.”

Cannabolish announced a partnership with Lowell Café, to help it eliminate undesired smoke smells.

“We’re proud to partner with Lowell Cafe to provide an enjoyable experience for their customers and neighbors. As consumption businesses become more prevalent, we’re excited to use our patented formula to help similar establishments safely and effectively remove odors associated with cannabis smoke,” a company representative said.

Flower One announced a brand partnership agreement with Southern California cannabis brand 22Red. Founded by System Of A Down bassist Shavo Odadjian, 22Red has become known for its brand authenticity and proprietary genetics. This partnership agreement with Flower One is 22Red's first out-of-state expansion.

"Flower One takes great pride in joining forces with 22Red to help introduce and grow their authentic brand in Nevada. We're looking forward to utilizing our state-of-the-art facility to produce 22Red's innovative line of products,” said Flower One's Kellen O’Keefe.

Green Point Research announced a research partnership with FSU College of Law to discover if “CBD is the new Ibuprofen.” The study will include both insight on the impact that hemp has on Florida’s economy as well as a triple blind study on CBD as an analgesic for acute pain. "We are excited to work with our alma mater to conduct research that we believe will provide tremendous longtail benefits to both Florida's natural environment and economy," said CEO David Hasenauer.

Balanced Health Botanicals parent company to the CBDistillery brand, announced its hemp-derived full-spectrum cannabidiol extract, and CBD isolate, has received self-affirmed Generally Recognized as Safe (GRAS) status in accordance with the stringent U.S. Food and Drug Administration (FDA) safety guidelines.

"The achievement of the self-affirmed GRAS status is something we are celebrating tremendously here at Balanced Health Botanicals," said CEO Chase Terwilliger. "As a company founded on providing the highest-quality hemp-derived CBD products to the masses, this achievement further validates our commitment to our mission and the safety of our products. For consumers, it's important to note that CBD companies that have achieved GRAS affirmation have met in-depth, rigorous third-party testing and expert panel review to ensure they are producing the safest products."

Cannabis information company Leafly launched its Leafly Certified Labs Program.

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

• How To Tell If Your Vape Cartridge Is Safe And Not Counterfeit (Updated)
• Clark University Offers Tuition-Free Cannabis Graduate Certificate For Government Employees
• Grassroots Cannabis CEO Joins Fyllo's Board
• HUB International's Cannabis Insurance And Risk Services Vertical Gets New Chief Sales Officer
• A California Police Chief And Green Flower Collaborate On Cannabis Education Course For Law Enforcement
• New Cannabis Products: Sugar Sticks, Cool Beverages, Hemp Gummies, Mini Pre-Rolls
• HEMPLE, They Call Her Alfie Launch New CBD Love Gel: 'We Have A Whole Lot Of Endocannabinoid Receptors In Our Sexual Tissue'
• Vaping-Related Lung Disease And Vitamin E Acetate: What You Should Know
• Is It Cannabis Or Marijuana? The Public Doesn't Care, New Study Shows
• Cannabis Basics: What Is THCA And What Can It Do For You?
• A Few Notable Winners From The Canadian Cannabis Awards

Check out these and many other cannabis stories on Benzinga.com/cannabis

Events Calendar

Nov. 19–21: The Medcann World Forum 2019 will be held in the Mediterranean Conference Centre which dates back to the 16th Century. where it was originally built as a hospital by the order of St. John. The event will host Malta’s top policymakers, international regulatory experts and global business leaders.

Nov. 20: CannaGather is hosting its monthly educational and networking event in New York City. This month's topic discusses the vaping industry in regards to cannabis. The guest speaker will be Arnaud Dumas de Rauly, CEO and co-founder of The Blinc Group, and chair of the ISO Vapor Product Standards Committee. The event will begin with networking. Then it will move to the auditorium, where Josh Weinstein, the founder of CannaGather, will interview Arnaud.

Nov. 24–26: A healthy legal African cannabis market could become a main source of bulk medicinal cannabis and cannabis-derived products on a global scale. Hundreds of local and international industry stakeholders will convene in South Africa at CannaTech Cape Town, to take a deep dive into the emerging industry throughout the continent.

Nov. 28: The CanEx Investment Summit will take place at the Fairmont Royal York hotel in downtown Toronto, and will provide a high level look at the investment, operational and regulatory environment in the Caribbean and most specifically in Jamaica and St. Vincent and the Grenadines. The event will feature high level Government participation with Hon. Audley Shaw (Minister of Agriculture from Jamaica) and the Hon. Saboto Caesar (Minister of Agriculture from St. Vincent and the Grenadines) confirmed to attend. CanEx Founder, Douglas Gordon had this to say about the event, “This Summit will provide valuable and high level insight into the markets and opportunities in the Caribbean. We will have a very knowledgeable and experienced set of individuals offering unique and compelling insights into how the market has evolved, where it sits at the moment and the growth prospects. The future looks very bright for the Caribbean in this industry and we are delighted to use this platform to allow greater insight and promote tighter collaboration, while highlighting some of the investment opportunities that presently exist.”

Picture by Javier Hasse.