The Week In Cannabis: Stocks Back In The Red, CannTrust Enters Creditor Protection, Good News For MedMen, GW Pharma

After two strong weeks, marijuana stocks went negative again, with all major ETFs posting significant losses.

Over the last five trading days:

• The ETFMG Alternative Harvest ETF MJ lost 13.85%.
• The AdvisorShares Pure Cannabis ETF YOLO tumbled 11.58%.
• The Cannabis ETF THCX took a 16.49% dive.
• The Amplify Seymour Cannabis ETF CNBS shed 10.99% of its value.The SPDR S&P 500 ETF Trust SPY closed the period down 2.05%.

The big news item of the week, beyond the COVID-19 pandemic, was CannTrust Holdings Inc. CTST TRST entering creditor protection under the CCAA and its stock being delisted from the the Toronto and New York Stock exchanges.

The news was "a foregone conclusion," said Matt Markiewicz, managing director of Innovation Shares, which is behind the Cannabis ETF.

"It is a stark reminder of how this industry and its actors are beholden to higher standards than most consumer product categories," he said. 

"There should be no gray area when compliance is involved and CannTrust, along with its investors, have now paid a heavy price for violating Health Canada's rules."

Check out our cannabis, hemp and psychedelics news, now in Spanish on El Planteo.

Cannabis y Noticias de la Semana: Acciones en Rojo, Protección de Acreedores para CannTrust, Buenas Noticias para MedMen y GW Pharma

MedMen Enterprises Inc. MMEN MMNFF said it has closed on $12.5 million in extra gross proceeds as part of its $250-million senior secured convertible debt facility led by Gotham Green Partners associated funds. Also this week, the company’s president Andrew Modlin sold his West Hollywood home to YouTuber Emma Chamberlain in a transaction valued at $3.9 million.

In some good news, GW Pharmaceuticals plc GWPH’s drug Epidiolex received Priority Review status from the U.S. Food and Drug Administration. The Cambridge, U.K.-based company and its subsidiary Greenwich Biosciences Inc. confirmed Tuesday that their new drug application for the use of Epidiolex — cannabidiol — CV will have a review time of about six months instead of the FDA's typical 10.

Neuro-pharmaceutical and psychedelics company Mind Medicine Inc. MMED MMEDF has acquired exclusive rights to data, compounds and patents for research with LSD and other psychedelics from the Liechti laboratory in Switzerland’s University Hospital Basel.

Renowned psychopharmacology researcher Ethan Russo is teaming up with cannabis educator Nishi Whiteley to launch a startup. The company, CReDO Science LLC, will focus on the research and development of disruptive technologies impacting the endocannabinoid system.

And, finally, in some international news, the federal government in Canada declared that medical cannabis production is “essential” during the pandemic.

More News From The Week

EcoGen Laboratories introduced the EcoGen Buyback Program, through which EcoGen will buy back harvested hemp crops at fair market value from farmers who purchase seeds from the company.

The program was created to aid hemp farmers during this growing season, which has been impacted by COVID-19, by providing competitively priced feminized seeds validated through genetic, germination and stability testing. Following the harvest process, EcoGen will arrange to purchase unsold hemp biomass grown from EcoGen seeds that meet the company's standards and arrange for shipping back to the facility for processing.

"We started the EcoGen Buyback program to assist hemp farmers. Our team wanted to create a layer of financial security for farmers during such trying times to ensure that they have a successful season despite the current circumstances, and through the EcoGen Buyback program, we believe we have achieved that goal," said Alexis Korybut, co-founder and CEO of EcoGen.

Helix Technologies reported earnings from the fourth quarter and FY 2019 this week The firm had its highest earning year ever and improved all operating metrics, with yearly and quaterly revenue topping $15.3 million and $4.3 million, respectively. The growth was driven by organic revenue from commercial software and a sharp increase in revenue from third-party integrators, according to the company. 

"2019 was a stellar year for Helix. We once again executed on our strategic plan and are carrying the momentum into 2020 as we look to drive greater value for clients and shareholders through continued innovation," Zachary Venegas, CEO and executive chairman, told Benzinga.

Endocanna Health announced the launch of new features for its Endo·Decoded endocannabinoid report.

The new version of the Endo·Decoded report provides an in-depth look at individual DNA markers, further identifies unique genotypes and maps potential risks and suggestions for a more positive outcome, Endocanna said. 

The report aligns individual DNA results with the latest research in order to match them with specific Endo·Aligned formulation suggestions, such as specific CBD-to-THC ratios and terpene profiles. Additionally, the newly added Wellness Report provides consumers with Endo·Aligned formulation suggestions that are matched to commercial products, delineated by geographical regions.

“With the new updates and comprehensive reports available to consumers on Mydna.live, Endocanna Health can offer more robust, scientifically based insights to ensure cannabinoid and CBD consumers have the best chance to achieve an optimal experience, by reducing the potential for an adverse event,” said Len May, CEO and co-founder of Endocanna Health.

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Hollister Biosciences Inc. HOLL HSTRF closed on a previously announced purchase of an Arizona-based cannabis extract brand, Venom Extracts. The all-stock purchase was valued at CA$20 million ($14 million).

HEXO Corp. HEXO HEXO disclosed second quarter financial results, with CA$17 million in net revenue, up 17% from CA$14.5 million in the previous quarter.

MediPharm Labs Corp. LABS MEDIF said Monday that “2019 was a transformational year" for the Ontario, Canada-based company.

"We were one of only a very few cannabis companies to successfully execute on its strategy and be profitable,” MediPharm CEO Pat McCutcheon said in a statement.

MediPharm reported fourth-quarter revenue of CA$32 million versusCA$10 million in the corresponding period of 2018. For the full year, the company posted revenue of CA$129.3 million, gross profit of CA$42.9 million and adjusted EBITDA of CA$24.7 million.

4Front Ventures Corp. FFNT FFNTF announced several management and corporate changes, including layoffs, with the goal of reaching positive cash flow in the second half of 2020. The cannabis company named Leo Gontmakher, previously COO, as its new CEO.

Current CEO Josh Rosen will become executive chairman of the board of directors.

Cannabis technology platform Fyllo is launching a new software tool focused on helping cannabis companies ensure that advertising and other creative content is compliant with applicable state and local regulations.

Dubbed "Compass," the new software allows brands to quickly verify compliance using Fyllo’s proprietary compliance recognition technology. With Compass, brands can drag and drop any digital asset such as creative ads, social media posts and website content for analysis, using advanced artificial intelligence, image recognition and language processing to analyze text and imagery to detect non-compliant content.

European pharmaceutical company Neuraxpharm has teamed up with Israel medical cannabis producer Panaxia Labs Israel PNAX to begin marketing medical cannabis products in Germany.

The latter also finalized a 17-million-ILS ($4.67 million) private placement of common stock and warrants to Israeli institutional investors this week.

Cronos Group Inc. CRON released fourth-quarter and full-year 2019 financial results Monday, posting net revenue of $7.3 million versus $4.28 million in the same quarter of 2018. The increase in revenue contained a non-cash gain of $118.8 million connected with the $1.8-billion investment from Altria Group Inc. MO.

Following the announcement, Bank of America’s Christopher Carey downgraded Cronos from Buy to Neutral and lowered the price objective from CA$11 to CA$9.

Acreage Holdings Inc. ACRG ACRGF became the latest cannabis company to announce business cutbacks due to the coronavirus pandemic.

The New York-based company's operational changes include the following:

• Temporarily firing 122 employees from field operations teams and the corporate office
• Temporarily halting business activities such as its wholesale operations in Iowa, dispensaries in Maryland and North Dakota and Form Factory operations in Oregon, Washington and California
• Transforming its Queens dispensary into a delivery hub
• Abolishing the securities purchase agreement among GCCC Management, LLC, Greenleaf Compassionate Care Center and High Street Capital Partners, LLC in connection with the planned purchase of a Rhode Island dispensary

Acreage also canceled the signed merger agreement with Deep Roots Medical LLC because the companies couldn’t acquire needed approvals to complete the merger before the already set outside date, as there was a delay imposed by the Nevada Department of Taxation.

Steve Hardardt, executive vice president, CPO and administration, has resigned.

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

• How Accela Keeps Cannabis Commerce Going Amid COVID-19 Crisis
• New Cannabis Products: Stress Kits And A Skincare Line
• New Cannabis Products: THC-Free Tinctures, Glass Joints, And A Live Resin Cart
• Recreational Marijuana Legalization Reportedly Omitted From New York Budget
• Why States Need To 'Flick The Legal Switch' On Cannabis Amid COVID-19
• Simplifya's CEO On The Crucial Need For Cannabis RegTech In A Shaky Economy

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

Events Calendar

Northern California sustainable cannabis producers Aster Farms have partnered with Ganja Yoga and California Bay Area cannabis delivery companies Sweet Flower and Sava to provide a much needed health and wellness break during these trying times.

Ganja Yoga founder Dee Dussault is leading live Ganja Yoga classes via Instagram Live twice weekly; they began March 27. For four weeks, classes will air every Tuesday from 6:30-7:30 p.m. PT and Friday from 11:30 a.m.-12:30 p.m. PT. During the four-week campaign, participants will receive 20% off any Aster Farms purchase at Sweet Flower and Sava using the code aster during checkout. The combination of cannabis with yoga is an ancient practice. Since 2009, Ganja Yoga has fostered a community of modern-day cannabis yogis all over the world.

"We’re hoping to provide some needed relaxation and exercise for our community while sheltering-in-place,” says Aster Farms President Sam Ludwig. To join Aster Farms x Ganja Yoga, please visit: @ganjayoga on IG Live during the scheduled times. 

Benzinga will be hosting a virtual Cannabis Capital Conference in June. Check out details here.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.