The Week In Cannabis: Union-Covered Cannabis, Small Financings, Moves In Multiple US States

It was a relatively slow week for the cannabis industry. While broader markets surged on the transition of power in the U.S., cannabis stocks were slightly down.

ETFs were mostly in the red. Over the last five trading days:

The ETFMG Alternative Harvest ETF MJ: lost 2.1%
The AdvisorShares Pure Cannabis ETF YOLO: closed the week almost flat.
The Cannabis ETF THCX: tumbled 3%
The Amplify Seymour Cannabis ETF CNBS: gained 0.7%
The SPDR S&P 500 ETF Trust SPY was up 2.15%

Among the major news of the week was Aleafia Health AH ALEAF partnership with trade union Unifor – Canada’s largest private union, serving more than 300,000 members. The goal is to “support union members, retirees and their eligible dependents who receive medical cannabis insurance coverage through Unifor’s collective bargaining agreements.” Aleafia will serve union members and their families through its network of medical cannabis clinics, products, and scheduled same day delivery, according to Aleafia CEO Geoffrey Benic.

Benzinga Cannabis content is now available in Spanish on El Planteo.

Regulatory Updates

Michigan's Racial Equity Advisory Workgroup released recommendations to encourage more diverse ownership. The recommendations come, in part, through parameters in the state's 2018 legalization act that stipulates ownership encouragement and involvement for the state's most affected communities.

Currently, just 3.8% of Michigan's recreational market is comprised of Black ownership. Brown owners make up only 1.5%, according to December data from the Michigan Marijuana Regulatory Agency.

Arkansas welcomed medical marijuana sales back in May 2019, only to see substantial market growth last year, with sales hitting the $175 million mark,

Dispensaries across Massachusetts are suing the Bay State’s Cannabis Control Commission over new delivery license regulations. According to MassLive, the regulations in question — approved in November — enable only members of specific “disenfranchised” groups to deliver cannabis products in the first three years, which is allegedly against state law.

Illinois devoted $31.5 million from cannabis tax revenue to support social justice initiatives. Connecticut Governor Ned Lamont is pushing for a debate on legalizing and taxing the sale of adult-use cannabis. Dispensaries in Arizona, meanwhile, may begin adult-use cannabis sales as early as next week.

Financings And M&A

Auxly Cannabis Group Inc. XLY CBWTF launched a bought-deal offering to sell 40.55 million company’s units, with a price of 37 cents per unit to collect gross proceeds of $15 million. ATB Capital Markets Inc. and Cantor Fitzgerald Canada Corp. were named underwriters and joint book-runners.

Alcohol and cannabis retailer Alcanna Inc. CLIQ LQSIF agreed to spin out its retail cannabis business into a separate company and merge it with YSS Corp. YSS YSSCF. The all-stock deal is projected to occur around March 1. Eight Capital and Cormark Securities Inc. will lead a minimum $25 million equity financing to complete the transaction.

Namaste Technologies Inc. N NXTTF closed its bought deal public offering, collecting total gross proceeds of CA$23 million. The Toronto-based company sold 65.78 million of its units at a price of CA$0.35 per unit, including 8.58 million units sold following the exercise in full of the underwriter’s over-allotment option.

Latin American medicinal cannabis producer Blueberries Medical Corp. BBM BBRRF collected CA$1 million ($788,495) via a non-brokered private placement sale at CA$0.065 per share. Buenos Aires, Argentina-based private equity firm FLA Ventures Ltd. led the offering and is now a Blueberries partner. Its shareholders back one of the biggest media groups in Argentina, as well as one of the biggest networks of medical centers in Latin America.

Psilocybin-based medicine company Wesana Health, founded by two-time Stanley Cup Champion Daniel Carcillo launched this week, and focus on developing psychedelic-assisted therapies to treat traumatic brain injuries (TBI). The company also announced the close of a $4 million convertible note financing round to support its entry into the emerging psychedelics space.

American Cannabis Company Inc. AMMJ agreed to buy a set of assets from Andina Gold Corporation AGOL. Terms of the deal were not disclosed.

Pyxus International PYYX will divest its Canadian cannabis assets to “focus on its more profitable tobacco and e-liquid businesses.”

Fyllo, a cannabis tech company focused on marketing and compliance, acquired retail point-of-sale marketing company DataOwl.

More News From The Week

Nabis, a technology-focused cannabis distributor, was named to Y Combinator’s “Top Companies List for 2021.” This is the first time a cannabis company has received the recognition. Y Combinator, a seed money startup accelerator, compiles a yearly list of the top companies by valuation and top exits. Notable listed companies include Airbnb, Coinbase, DoorDash and Reddit among others. Nabis, alumni of the accelerator’s Winter 2019 batch, has grown its distribution services in California to support nearly 100 individual brands and supply products to more than 99% of California’s dispensaries.

"The recognition on Y Comabintor's Top Companies List for 2021 not only speaks to the success of our company, but also the degree to which cannabis is rapidly becoming mainstream and destigmatized,” said Nabis co-founder and CEO Vince Ning.

Digital payments platform AeroPay partnered with Blackbird, a cannabis software and delivery company, with the objective of creating a platform to enable cannabis businesses to accept cashless operations. The partnership integrates AeroPay’s payments platform into Blackbird’s cannabis marketplace.

SweetWater Brewing Co. products are reaching Colorado. The company, which was acquired by Canadian cannabis giant Aphria Inc. APHA APHA in November, will present its flagship Pale Ale in state bars, restaurants and retail stores starting Feb. 1.

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