The Week In Cannabis: Big Earnings Reports, Biden's Change Of Heart, New Report On Dispensaries

As the presidential race continues to heat up, Democratic contender and former Vice President Joe Biden has come out in support of decriminalizing cannabis — but not of full legalization. “Nobody should be in jail for smoking marijuana,” he said.

While it was a big step for someone who had been opposed to cannabis for three decades, it still remains a half-step.

In the words of the cannabis writer Bruce Barcott: “By embracing decriminalization, Biden takes what many in the drug reform community consider the coward’s way out … these half-steps leave law enforcement free to continue the racially biased policing tactics, using marijuana as a pretext to stop people of color as they go about their business.”

A myriad of cannabis-related bills were submitted in the House of Representatives, most of them aimed at protecting certain groups using medical marijuana, from military veterans to students.

Leafly released a report looking into the impact of dispensary openings on crime rates and property values. Benzinga broke this story with a write-up by Leafly’s California bureau chief David Downs.

“The vast majority of current research suggests that allowing regulated cannabis stores actually improves community safety, health and property values," he said. 

On the markets front, we saw some of the biggest cannabis companies in the world report their quarterly results.

CannTrust Holdings Inc CTST posted quarterly revenue of CA$16.9 million ($18.9 million), up 115 percent from the first quarter of 2018. Sixty-seven percent of the growth came from the medical channel, while 33 percent came from its recreational arm.

Tilray Inc TLRY posted an adjusted loss of 27 cents per share, in line with consensus estimates, on sales of $23.04 million. Revenue surged by 195 percent on the year and was considerably above analyst estimates of $20.16 million. CEO Brendan Kennedy told CNBC: “You are going to see some daily volatility, but our objective is to invest for the long-term.”

Aurora Cannabis Inc ACB reported deep losses on a year-over-year basis and net sales of CA$65.145 million ($48.4 million) versus $16.1 million in sales in the third quarter of 2018. 

Aurora said it lost CA$158.35 million in the first quarter, down from the second-quarter loss of CA$237.75 million but up 724 percent from its CA$19.2-million loss one year ago. Executive Chairman Michael Singer said getting to positive EBITDA would be a “game-changer.” Options traders made some big moves following the earnings report. The largest trades suggest the Aurora rally could soon run out of steam.

“I believe cannabis investors are starting to expect execution from the industry. Companies have been on an acquisition and going public binge, which has proven to be expensive," Green Market Report CEO Debra Borchardt told Benzinga. 

"Now shareholders want to see revenues rising and losses declining. Patience will begin to wear thin as we move through the quarters this year.”

Finally, we learned that Jakob Ripshtein, President of Aphria Inc APHA, will resign from the company June 7 amid a wide management reshuffle.

Check out our story of the week: PTSD, Veterans And Suicide: Action Is Needed, And Cannabis May Help

Marijuana Stocks & ETFs

Over the last five trading days:

• The Horizons Marijuana Life Sciences Index ETF HMLSF HMMJ lost almost 1 percent.

• The ETFMG Alternative Harvest ETF MJ tumbled 1.8 percent.

• The AdvisorShares Pure Cannabis ETF YOLO gained 0.1 percent.

• The SPDR S&P 500 ETF Trust SPY closed the period down 0.8 percent.

Top marijuana stocks with market caps above $500 million trading on U.S. exchanges performed as follows over the last five trading days: 

• Acreage Holdings ACRZF: down 8.2 percent.

• Aphria Inc APHA: down 5.4 percent.

• Aurora Cannabis Inc ACB: up 3.95 percent.

• CannTrust Holdings Inc CTST: down 0.3 percent.

• Canopy Growth Corp CGC: down 6 percent.

• Cronos Group Inc. CRON: down 3.05 percent.

• Curaleaf Holdings Inc CURLF: down 13.6 percent.

• Green Growth Brands Inc GGBXF: down 9.9 percent.

• Green Organic Dutchman Holdings Ltd TGODF: down 4.3 percent.

• Green Thumb Industries Inc GGBXF: down 9.9 percent.

• GW Pharmaceuticals PLC- ADR GWPH: down 1.8 percent.

• Hexo Corp HEXO: down 3.1 percent.

• Harvest Health & Recreation Inc HRVSF: down 5.2 percent.

• iAnthus Capital Holdings Inc ITHUF: down 6.5 percent.

• Marimed Inc MRMD: up 0.8 percent.

• MedMen Enterprises Inc. MMNFF: down 4.6 percent.

• OrganiGram Holdings Inc OGRMF: up 12.7 percent.

• Scotts Miracle-Gro Co SMG: down 2.1 percent.

• Tilray Inc TLRY: down 8.4 percent.

In Other News

Cannabis industry infrastructure services provider Helix TCS Inc. HLIX announced the receipt of its application to list on the Canadian Stock Exchange, in addition to the company’s active OTCQB listing.

“As we set the stage for a global cannabis marketplace and the industry begins to attract broader financial and investor interest, we are excited about the prospect of listing on the CSE as it will bring our current and future investors increased liquidity, regardless of where they are located,” Zachary Venegas, executive chairman and CEO of Helix TCS, told Benzinga.

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Arizona-based Harvest Health & Recreation announced it closed the first tranche of its brokered private placement for gross proceeds of $100 million. Full story here.

Wholesale marketplace LeafLink began offering Metrc integration, allowing its clients to consolidate their Metrc and LeafLink workflows. The integration syncs with Metrc accounts, allowing users to view and manage Metrc data throughout the LeafLink experience.

Media veteran Felicia Palmer, founder of SOHH.com, the longest-running hip-hop website in the world, and her new company, Cannaramic, are suing Facebook Inc FB after the social media behemoth rejected some ads around their upcoming Cannaramic Online Summit and temporarily suspended the event’s page.

The plaintiffs are being represented pro bono by attorney David Holland, the executive director for the New York chapter of marijuana advocacy organization NORML; they are seeking a jury trial to challenge Facebook’s stance on legal cannabis.

Hemptown Organics Corp., a hemp company that does business as Hemptown USA, said it raised CA$23.3 million ($17.2 million) to fund an expansion of its operations. Full story here.

Steven Ernest, former co-founder of Mazakali and JPMorgan Wealth Manager, joined Viridian Capital Advisors as director of business development. Alongside the accelerating growth and consolidation of the cannabis industry, Viridian is attracting top talent to its team as it continues to prove itself a leader in the cannabis capital markets.

Contract cannabis manufacturer Natura Life + Sience completed a $91-million private round of financing for the construction of a large, vertically integrated cannabis campus in California. Full story here.

Driven Deliveries Inc DRVD expanded its cannabis delivery operations from California to Nevada. Driven will service the Las Vegas area in Nevada while maintaining its operations in California.

“We are excited to launch our services in Nevada as we continue on our growth trajectory to enter the neighboring states of California, and eventually, the rest of America," President Brian Hayek told Benzinga.

"We look forward to reaching a new customer base in a fast and convenient manner. Our partnership with Shango Marijuana Dispensary will provide quality products on demand across the state of Nevada.”

MediPharm Labs Corp. MEDIF agreed to a multiyear supply deal with Cronos Group. Full story here.

Tikun Olam said its brand was approved by The Realm of Caring Foundation in Florida. 

“Realm of Caring has a track record of making a powerful impact on families through their innovative programs, especially by providing personalized product and dosing recommendations through the guidance of trained specialists," Tikun Olam CMO Stephen Gardner said in a press release.

"We are excited to offer this service to our patients in Florida, helping ensure they have an optimal experience with our products on their path to plant-based wellness."

Unicorn cannabis investment company Canopy Rivers Inc CNPOF invested $1.5 million in Biolumic, creators of a sustainable UV crop yield enhancement system. This is Canopy River’s first investment in the AgTech sector. Canopy Rivers is the investment arm of Canopy Growth. Full story here.

Halo Labs Inc AGEEF reported first-quarter financials, with first-quarter 2019 revenue of $8.7 million. From non-traditional beginnings running the company out of a backyard chicken coop using highly volatile extraction technology, Halo now ranks second among U.S. plant-touching cannabis stocks on a revenue growth basis. The corresponding revenue for the first quarter of 2018 was $2.16 million. Halo projects nearly $50 million in revenue and 332-percent organic growth over 2018.

Fintech company Promontory Interfinancial Network recently conducted a survey of bankers in the U.S. Results showed that 82 percent of respondents think the federal government should allow them to serve plant-touching cannabis businesses. This legislation is in Congress in the form of the SAFE Banking Act. Full story here.

Dip Devices released a limited-edition Rainbow Dipper. A donation of 5 percent of sales from every unit will be made to the Trevor Project, a national organization providing crisis intervention and suicide prevention services to young queer people.

Kush Marketplace, an anonymous platform that seeks to create a level playing field for cannabis and hemp buyers and sellers, is re-launching as Kush.com after having facilitated almost $11 million in wholesale transactions. Full story here.

Erica Daniels is the founder of Hope Grows for Autism, a nonprofit aimed at improving the lives of families affected by autism through research, education and the advocacy of medical marijuana. She's partnered with Ilera Healthcare for the launch of a new tincture, HOPE. 

This formulated medicine created by Ilera was designed for patients to improve their quality of life.

Ilera’s pharmaceutical development capabilities and formulation expertise are being combined with Daniels and her team’s significant experience with this patient population.

Cannabis dispensary operator iAnthus Capital Holdings unveiled its national retail brand at the Canaccord Genuity third annual Cannabis Conference: "Be." Full story here.

California cannabis brand Canndescent started selling cannabis oil concentrate products in Nevada. “We are thrilled to bring Canndescent to the Nevada market to ensure our retail partners and customers have access to uncompromising, high-quality cannabis products,” CEO Adrian Sedlin said in a press release.

“The sale of our premium oils has exceeded expectations in California and we are positive that connoisseurs and new customers alike will appreciate the experience our products deliver.”

CbdMD Inc YCBD reported second-quarter results Thursday that arrived higher than expected and included a record sales figure. Full story here.

CNBC's Jim Cramer warned cannabis investors about overly promotional executives. Full story here.

Bank of America Merrill Lynch analyst Christopher Carey reiterated a Buy rating and CA$15 price target ($11) on Aurora Cannabis. 

“We see the strategy as reasonable; however, with so many companies also focused on these areas, and very few with the scale or capabilities to build advantages in untapped areas like beverages (with the exception of Canopy and Hexo), we wonder if Aurora could be ‘missing the boat’ on an area which could prove large as newer consumers wanting less pervasive, socially accepted product forms demand both psychoactive (THC-infused) and CBD beverages,” the analyst said. 

Blühen Botanicals, a hemp CBD company, opened its first retail wellness location in Knoxville, Tennessee. SOL Global Investments Corp SOLCF recently announced a $30.06-million investment in Blühen as part of its plan to diversify into hemp-related businesses through HeavenlyRx Holdings.

SOL Global also announced its proposed acquisition of Northern Emeralds, a Humboldt County-based cannabis cultivation and production company, as well as the One Plant-branded dispensary chain. The acquisitions provide SOL Global with access to California, as it moves forward in the launch of its own multistate operator. The $120-million deal for Northern Emeralds gives SOL Global access to the NorCal company’s advanced cultivation and processing techniques as well as its library of flower strains.

In the latest of its efforts to become the leading supplier of broad-spectrum hemp extract for the food, fragrance, cosmetic and CPG sectors, Socati Corp. announced it acquired Blue Marble Biosciences, a Montana-based company specializing in natural and sustainable compounds for companies in those industries.

Socati, which earlier this year announced $42 million in funding, plans to invest heavily in the Montana facility, growing its production capacity to 10 tons of biomass per day and nearly doubling the workforce.

"This acquisition positions Socati to capitalize on this meteoric growth through quality manufacturing, product development and innovation, setting the bar for product purity and consistency," said CEO Josh Epstein.

PanXchange announced the addition of Andy Bose, former chief product officer at S&P Global Platts, to its board of advisors. Bose will play a key role in the OTC physical commodity exchange’s continued growth. Based in Denver, PanXchange offers trading of a variety of commodities and offers industry-leading indices for frac sand and industrial hemp.

“Dummies” published the book Cannabis For Dummies, a guide to everything cannabis. Written by Kim Casey, the book covers topics surrounding marijuana, explaining the anatomy and chemistry of the plant and discussing the legal, political and cultural state of cannabis. The book covers buying, storing and using cannabis safely and responsibly and highlights the potential medical benefits of marijuana for both humans and pets.

For the more experienced, the book dives into growing and harvesting cannabis along with the business side, including working and investing in the marijuana industry.

True Leaf Medicine International Ltd TRLFF, a cannabis and hemp wellness brand for pets, announced that veterinarian and integrative pain management expert Dr. Conny Mosley has joined its veterinary advisory board. Mosley is a director and vice president of the Canadian Association of Veterinary Cannabinoid Medicine and brings more than 20 years of experience in veterinary medicine to True Leaf.

“We now have two of the foremost knowledge leaders on cannabinoid medicine for animals advising True Leaf,” said Darcy Bomford, TrueLeaf's founder and CEO.

“Veterinarians Dr. Katherine Kramer and Dr. Conny Mosley are working side-by-side with our team to develop a best-to-market CBD product line for pets. We’re developing proprietary veterinarian-formulated blends that will target specific pet health challenges such as calming support and hip and joint function."

ICC International Cannabis Corp WLDCF and Organic Flower Investments Group QILFF signed a definitive agreement with professional rugby team the Toronto Wolfpack to become the exclusive worldwide manufacturing and distribution partners for the team’s launch of its own branded line of athlete-focused CBD products. The Wolfpack becomes the first professional sports team to introduce its own line of proprietary CBD products, and planned products include CBD-infused topical creams, therapeutic relief balms, CBD-infused soaks and CBD-infused roll-ons and healing sticks, all developed with a focus on athlete wellness and recovery.

Root Engineers, the cannabis-focused division of ColeBreit Engineering, has partnered with Deschutes Labs to design and construct a 6,000-square-foot hemp processing facility in central Oregon. Root Engineers was brought onto a design team comprised of architects, structural engineers, general contractors and other consultants to design a code-compliant facility and provide a variety of mechanical, electrical, plumbing and fire protection design services. The design team included several Oregon-based companies that will continue to be involved as the Deschutes Labs project progresses.

"A cross-functional team like this one provides the perfect example of how cannabis businesses can streamline and create efficiencies from the beginning of the development process," said Laura Breit, managing principal of Root Engineers. "Our work with Deschutes Labs illustrates that the foresight in bringing together expert design and construction consultants can help cannabis facilities design safe, compliant and successful operations."

The Cannabis Trade Federation announced the creation of its Diversity, Equity and Inclusion Task Force comprised of a diverse mix of prominent national minority business and cannabis industry leaders. The CTF “believes that success for the cannabis industry means a thorough commitment to diversity, equity and inclusion.”

The DEI Task Force will work closely with CTF leadership to develop an industry-wide diversity, equity and inclusion policy to be adopted by the full CTF board, according to the organizer. 

Upon adoption, CTF member companies will have to agree to CTF’s DEI policy as a requirement of membership. The DEI Task Force will also develop benchmarks and goals to measure the industry’s progress and draft policy proposals for possible incorporation into future legislation.

“I’m honored to be named to the Cannabis Trade Federation’s Diversity, Equity and Inclusion Task Force to contribute to the important work of developing strategies to diversify and make the cannabis industry more equitable and inclusive,” said one of the members, Green Thumb Industries’s corporate counsel Akele Parnell.

K-Zen Beverages, a maker of cannabis-infused drinks, raised $5 million in seed funding from DCM, a global venture capital firm. The capital is being directed at continuous product innovation, retail partnerships and brand development to address changing consumer needs.

K-Zen Beverages is the second cannabis-related investment for DCM after Eaze, the on-demand cannabis delivery platform. The market for marijuana-infused beverages is massive and could hit $600 million in the U.S. by 2022, according to Canaccord Genuity.

CLS Holdings USA Inc CLSH reported its April 2019 results. CLS Holdings’ Oasis dispensary saw record April 2019 revenue of $652,500, an increase of 56 percent from April 2018. City Trees, the company’s branded product division, saw a revenue increase from $236,456 in April 2018 to $489,074 in April 2019.

Hemp entrepreneur Jennifer Babaian, founder and CEO of the hemp-wellness destination 7 Leaf Clover, is opening up shop in the Hamptons on May 24. 7 Leaf Clover’s third location will be opening at 760 Montauk Highway in Watermill, New York. This will be the first store of its kind to bring CBD and hemp products to the Hamptons.

CBD wellness brand Cultivate is set to debut its specialty line of lifestyle enhancement products at this year’s Oregon Hemp Convention June 7-8 at Portland’s Expo Center.

More From Benzinga Cannabis

The following are some of the most interesting cannabis-related stories from this week.

Hannah Genig spoke about the opioid crisis at the SALT Conference with Nicholas Vita, vice chairman and CEO of the medical cannabis company Columbia Care.

Susan Ameel, co-founder and partner of Global Regulatory Risk Advisors, discussed all sorts of regulatory topics, from Florida to the DOJ, in her column, RegTalk.

Headset CEO Cy Scott shared a look back into 4/20 figures and wrote an opinion piece, “420 Cannabis Celebrations Growth Marks The End Of An Era Of Oppression, Incarceration And Shaming.”

Michael Miller, the new cannabis editor of LA Weekly and host of the CannaBusiness Podcast, shared his personal cannabis story and a look into the transition of cannabis from a substance to get high with to being one that gets you healthy.

Jeff Siegel published his “Bulls And Bud Of The Week” column, discussing Captiva Verde Land Corp CPIVF’s acquisition of Solargram Farms Corporation and cannabis science this week. 

Andrew Ward shared a look into veteran-owned cannabis businesses and cannabis use in pro wrestling.

Check out these and many other cannabis stories in our cannabis portal.

Events Calendar

May 22: Greenhouse Ventures and the Philadelphia-Israel Chamber of Commerce are hosting Innovation In The Cannabis Industry, from Israel to USA at the Levitt Auditorium at University of the Arts. The event focus on transferring best practices of commercializing technology and research from Israel to the U.S., with a specific focus on implications for the the tristate (New York, New Jersey, Pennsylvania) region. 

For business operators and investors attending the event, host organization Greenhouse Ventures will provide insight into the launch of a new International Commercialization Incubator that aims to position Philadelphia and the tristate region as a landing pad for international startups seeking U.S. market entry. Companies selected to join the Commercialization Incubator will benefit from university research and corporate partnerships, discounted and pro-bono services, as well as assistance navigating complex barriers like banking, immigration, housing and marquee client acquisitions.  

May 23: The Hemp Industry Trade Association of Arizona (HITA-AZ) will host a monthly networking event open to the public at Modern Grove Views at OdySea in the Desert, in Scottsdale, Arizona. HITA-AZ is the first hemp-specific, non-governmental agricultural organization in Arizona.

May 28-June 1: The Cons is a gathering of three trade and fan shows — the Cam Con, the Cannabis Con and the Inked Con — all under one roof at the SLS South Beach Hotel in Miami Beach, Florida. The Cons 2019 will offer a variety of seminars with top industry panelist, networking parties and performance displays to benefit the industry’s content providers, models and affiliates. While these industries have differences, in many ways they overlap.  All three shows are model-driven because they are the true industry ambassadors, which is the core value of The Cons.

May 29: Ansell Grimm & Aaron's Cannabis Law Practice is hosting the CBD-A Conference. This seminar will focus on emerging issues and opportunities surrounding cannabis, blockchain, and capital raises using Regulation D and Regulation A. Find tickets on Eventbrite under the name "CBD-A Conference."

May 30-31: The Concentration Expo is coming to San Diego. Concentration is a cannabis extraction conference and event assembling the entire specialty cannabis extraction and analytical science spectrum in one connected space that’s focused on providing real solutions with proven success.

Attendees will connect firsthand with industry leaders offering tangible ideas and practical applications for all areas of cannabis extraction and analytical science. The conference is a two-day immersive event offering exclusive content and keynote seminars, alongside vetted exhibits and interactive experiences. 

June 7-9: The Women Grow 2019 Leadership Summit is coming to the East Coast. Dr. Chanda Macias, the CEO of the woman-focused organization, will welcome multitudes to her hometown of Washington, D.C., from June 7-8 for the largest cannabis event of its kind.

“We look forward to amplifying our message of cannabis legalization, inclusion and equality here in our nation’s capital,” Macias said. “Being steps away from the U.S. Capitol, where we have witnessed an influx of women assuming leadership positions, is sure to inspire our community as a whole to connect, educate and empower female leaders in this space.”

June 18: Martha Stewart will speak at the World Cannabis Congress in Saint John, New Brunswick, Canada. Stewart is an example of big brands and high-profile personalities that are entering into the cannabis space as outdated stigma gives way to mainstream growth opportunities.

“I look forward to sharing my knowledge and experience in the lifestyle space with this tailored audience,” Stewart said. “As I begin to collaborate on products for the CBD market, and as the demand for these types of product grows, I’m very interested in the conversations and connections at this event.”

Stewart will be joining Civilized publisher Derek Riedle and Bruce Linton, the founder, chairman and co-CEO of Canopy Growth onstage in a fireside chat June 18 to close the conference. Read more about it here.

June 25: MjMicro, an investor forum that seeks to connect “highly qualified investors with best-in-class and emerging publicly-traded cannabis companies” will debut in New York at the Westin Grand Central. The event is slated to be held four times a year, with future events scheduled for Beverly Hills, West Palm Beach and Seattle.

Photo by Javier Hasse.