A few big news items came out of the cannabis industry this week.
NFL Hall of Famer Joe Montana was part of a group of investors that provided $75 million in venture capital to Caliva.
U.S. surgeon general Jerome Adams faced backlash from an anti-marijuana tweet.
And speculation about a potential decriminalization of cannabis in the U.S. hit new highs as the government shutdown lingered.
“Caliva's move this week to raise $75 million and bringing in star power is something I expect we'll see continuing among cannabis companies,” Debra Borchartd, CEO of Green Market Report, told Benzinga. “With the former CEO of Yahoo! Carol Bartz, who is also a former Cisco Board Member, and Joe Montana investing in the company's initial round of funding, Caliva instantly jumped to the top of hot cannabis company lists.”
Borchardt continued, “It will no longer be enough to have a hotshot scientist or acclaimed grower, companies will be looking for more board room stars from traditional industries and continue to tap former star athletes. While Acreage Holdings has focused on political big wigs, Caliva looked to the tech world. Either way, boards will need star power to compete.”
Marijuana Indices & ETFs
Over the last five trading days, including last Friday, since U.S. markets were closed Monday, the United States Marijuana Index, which tracks most of the largest marijuana stocks in the U.S., gained 3.7 percent, while the North American Marijuana Index, which also includes Canadian stocks, rose approximately 3.8 percent.
Over the same period, the Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) (TSE:HMMJ) gained 4.5 percent, while the ETFMG Alternative Harvest ETF (NYSE: MJ) rose roughly 3.2 percent. The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period down 0.26 percent.
Here are some of the top marijuana stocks (market cap above $300 million) in U.S. exchanges and how the performed over the last five trading days:
• Acreage Holdings (OTC: ACRZF): down 4.3 percent
• Aphria Inc (NYSE: APHA): up 7.2 percent
• Aurora Cannabis Inc (NYSE: ACB): up 4.2 percent
• CannTrust Holdings Inc (OTC: CNTTF): up 10.3 percent
• Canopy Growth Corp (NYSE: CGC): up 11.3 percent
• Cronos Group Inc. (NASDAQ: CRON): up 7.6 percent
• Curaleaf Holdings Inc (OTC: CURLF): up 7.4 percent
• Green Organic Dutchman Holdings Ltd (OTC: TGODF): up 30.9 percent
• Green Thumb Industries Inc (OTC: GTBIF): down 2.1 percent
• GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH): up 0.9 percent
• iAnthus Capital Holdings Inc (OTC: ITHUF): up 1.9 percent
• Marimed Inc (OTC: MRMD): up 14.1 percent
• MedMen Enterprises Inc. (OTC: MMNFF): up 9 percent
• OrganiGram Holdings Inc (OTC: OGRMF): down 6.4 percent
• Scotts Miracle-Gro Co (NYSE: SMG): down 0.6 percent
• Tilray Inc (NASDAQ: TLRY): down 1.9 percent
In Other News
Customers of Amazon.com, Inc. (NASDAQ: AMZN)’s Whole Foods Market can now purchase what Emerald Health Bioceuticals claims is “the world's first doctor-formulated, cannabis-free endocannabinoid support supplements. Instead of using hemp or cannabis, these products are made with a blend of herbs and botanicals (like echinacea, peony and clove) that directly tap into the power of the endocannabinoid system by targeting both CB1 and CB2 receptors and by mimicking THC and CBD for longer-lasting health support.
“Endocannabinoid health is so much more than CBD and THC; and we’re thrilled to partner with Whole Foods Market to bring consumers a legal and more comprehensive CBD alternative," said Emerald Health Bioceuticals CEO, Jade Beutler. “Our products go beyond cannabis providing long-term wellness solutions for anxiety, sleep, inflammation, mood and brain health to keep the Endocannabinoid System in nature’s perfect balance.”
In an exciting development, we found out that Southern Sun Pharma Inc. could become the first Africa-focused cannabis company to trade on a major stock exchange. According to an announcement, Southern Sun has agreed to a reverse takeover of AIM3 Ventures Inc. (TSXV:AIMC.P). Upon completion of the transaction, the amalgamated company will trade on the TSXV.
“We are excited to partner with the highly successful AIM CPC franchise and to be on a path to be the first Africa-focused cannabis company to list on the TSXV,” CEO and founder Warren Schewitz told Benzinga.
High Times Holding Corp announced the acquisition of Spannabis Festival, the largest cannabis festival in Europe, for $7 million. The move will provide increased international exposure to the media and events holding company.
Verano Holdings hired former PepsiCo, Inc. (NASDAQ: PEP) exec Ron Goodson as its president and Chief Operating Officer. Goodson will lead development and operations as well as oversee and expand Verano’s multi-state operations.
Benzinga reached out to Goodson: “Verano and the cannabis industry today are in an exhilarating, surging growth phase. With wickedly fast expansion, I’m enjoying the challenge of creating scalable operational infrastructure, corporate processes and accountability, while fostering in all employees and facilities the culture that George and Sam so meticulously developed. By consolidating the value of each individual into the appropriate infrastructure, Verano will have the tools it needs to reach its ambitious goals.”
Vertical Companies, a multi-state CPG company in the medical and adult-use cannabis industries, announced it's spinning off its hemp-based CBD assets into the newly formed Vertical Wellness entity. Vertical Companies President J. Smoke Wallin has been named Chief Executive Officer. This announcement comes on the heels of the recent passing of the 2018 Farm Bill, which legalized hemp throughout the U.S.
Wallin told Benzinga, “Vertical Wellness represents everything right about the amazing cannabis plant. Fully legalized hemp based products are positioned to change the world. From CBD health and wellness to high protein foods to clothing and building materials, the 2018 Farm bill puts everything into play. We understand these form factors and the importance of brands and distribution. I couldn’t be more excited with the opportunity we have to bring innovation and scale to this long suppressed answer to so many needs.”
Scott Durrah, co-owner of Simply Pure Dispensary with his wife Wanda James, and a longtime Denver resident, announced his candidacy for NW Denver, District 1 City Council. As the first African-American in the U.S. to receive a legal vertical cannabis distribution, cultivation and production license, Durrah is also among a growing number of voices speaking to the political power of cannabis.
“I value the people in my community and I know I can make a difference. My diverse professional background has prepared me to take on this responsibility. I am the bridge that connects residents and small businesses to local government," said Durrah.
Digipath, Inc. (OTC: DIGP), a service-oriented independent testing laboratory, data and media firm focused on the developing cannabis and hemp markets, announced it has entered into an agreement to provide fully-functional potency testing laboratories for hemp production sites owned by Hemp, Inc. (OTC: HEMP) in North Carolina, Oregon and Arizona.
“Digipath is a leader in cannabis and hemp testing best practices and continues to provide cutting edge testing services for this industry,” stated Bruce Perlowin, CEO of Hemp, Inc. “These new Digipath labs will not only test all of our hemp products but will also be available for all of the local hemp farmers in each area to do their own required testing.”
Canadian LP The Flowr Corporation (OTC: FLWPF) announced it had received clearance from Health Canada to open additional grow rooms at the cultivation facility it is constructing in Kelowna, BC. The rooms will double Flowr's current capacity and bring the facility up to 50 percent operational. Flowr said the facility will be complete by the end of the third quarter and produce more than 10,000 kilograms of premium cannabis annually once done.
“The shortage of premium cannabis we predicted has definitely materialized," said Tom Flow, Flowr Co-CEO. "Bringing these grow rooms online will increase the supply available to our partners and keep a high quality option available for consumers and patients in those markets.”
Canna-Hub, a California-based real estate development and property management company for the cannabis industry, announced that the company’s largest development is located in a qualified Opportunity Zone as defined in the Tax Cuts and Jobs Act of 2017.
“This is not a coincidence,” said Founder and CEO Tim McGraw. “We started development of the project in early 2017 before Opportunity Zones even existed. The main objective of all our projects is to support the growth of the cannabis industry by providing a comprehensive real estate solution for licensed cannabis operators while bringing jobs and economic development to cities that need it the most.”
Vangst, the largest staffing and recruiting agency in the cannabis industry, closed an over-subscribed $10 million Series A financing round led by Snoop Dogg’s cannabis-focused VC fund Casa Verde Capital. CEO and founder Karson Humiston told Benzinga, “What began as an observation and an idea three years ago, combined with a lot of hard work, has resulted in Vangst becoming the go-to provider of human capital to the cannabis industry... From growers to vertically-integrated multi-state operators, Vangst actively serves a network of more than 600 companies across the entire cannabis ecosystem.”
Weekend Unlimited Inc. announced the signing of an arms-length letter of intent to provide processing and distribution facilities to Boggy Boon branded cannabis company Seven Hills, with an option to acquire Seven Hills. Under the agreement terms, Weekend will provide a loan of up to $750,000 to Seven Hills in three equal tranches over 9 months to upgrade its facilities, and will have the option to acquire 100 percent of Seven Hills for $1.5 million. As a result of this alliance, Orchard Heights will have more diverse products to offer its sales channel and will be able to sell Weekend brands to the existing 130 Boggy Boon retail accounts.
Read about these and other news on Cronos, KushCo Holdings Inc (OTC: KSHB) and Doyen Elements International with out friends at Marijuana Money.
Interesting Data & Information
Some good news for parents of autistic kids. A new study to gauge the safety and efficacy of treating pediatric patients with cannabis showed a “significant” improvement in symptoms and less reliance on other medications after cannabis treatment. The two-year study, published in Scientific Reports, used Tikun Olam’s Avidekel high-CBD, low-THC cannabis varietal, and the results were encouraging: After six months of daily cannabis treatment 80.1 percent of patients reported improvement of their symptoms, and 20 percent stopped using antipsychotic medication.
“We focused on a large population with consistent dosing,” said Dr. Annabelle Manalo, PhD, Tikun Olam Scientific Director. “Our findings confirmed that Avidekel is safe and effective, with a significant increase in the quality of life for the children evaluated. This 6-month study serves as a powerful foundation to perform more detailed and extensive studies moving forward. We feel we have raised the bar in cannabis trials and see an additional opportunity to engage an even larger population of pediatric patients with other condition types worldwide.”
Business funding platform FundKite released a study on how small- and medium-sized cannabis businesses are growing in the industry, despite facing nationwide banking restrictions that would cripple other industries. After analyzing businesses across the industry, they found business owners face difficulty obtaining proper paperwork and underwriting for a safe and legal deals. FundKite found that nearly 90 percent of cannabis industry businesses are in need of funding and the high costs and barriers of entry are keeping a lot of new businesses from opening. Most new cannabis businesses are financed through personal funds or the help of family and friends.
When looking at how banking and funding will evolve in 2019 for the industry, FundKite found that many companies are skirting this legal gray area by only going to in state banks. Interstate lending has a headache of regulations, so, for example, eight banks recently opened up in Colorado to fund the thriving weed businesses. However, some cannabis companies choose to pursue equity over a loan. Equity may expand funding options to family offices, cannabis specific funds, angel investors, celebrity investments, and business accelerators and incubators. Companies looking to fund the industry primarily target growers and kitchen, not so much dispensaries.
“Banks providing loans to businesses associated with the cannabis could be subject to prosecution if the business breaks state law by selling to a minor or transports cannabis across state lines,” said Alex Shvarts, CTO of FundKite. “Cannabis is a mostly cash based industry, with a few accepting cryptocurrency, which is a high risk factor for a few reasons: cash is harder to trace, and cannabis businesses without checking accounts means the businesses can’t provide bank statements or a credit score. Having no credit score or credit card statements is a major red flag for lenders and funders alike, especially uncollateralized. If a marijuana company defaults on a payment, the lender would have nothing to go after or collect in attempt to get back their money.”
As cannabis goes mainstream, what type of new products will be developed?
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Headset’s Cy Scott, co-fouder of Leafly, reveals data about cannabis demographics, trends, what’s being tracked and what it portends for the future.
This video was originally posted on Green Flower.
More From Benzinga’s Cannabis Newsdesk
Over the week, Benzinga also reported on:
Tilray’s acquisition of licensed cultivator Natura Naturals Holdings.
New Frontier Data’s take on global cannabis markets, CBD remaining a restricted substance and developed industrial hemp markets.
“11 Company Pitches From Benzinga's Cannabis Capital Conference”
“8 Tips For New Cannabis Entrepreneurs,” by Weekend Unlimited’s Paul Chu.
Green Growth Brands Inc (OTC: GGBXF)’s formal takeover offer for Aphria.
Hexo Corp uplisting to the NYSE American.
January 26: Cannabis showcase company REVEL has partnered with a Cannaclusive, The Cannabis Cultural Association and Mary's List to host the first CannaCareer Readiness Fair. The event will consist of practicums on resume writing, interviewing techniques amongst other professional development workshops.
“New York is on the path toward legalization, and we want our community to be prepared for the transition,” Mary’s List co-founder and CEO Denise Biderman told Benzinga. “As the first freelancer marketplace in the cannabis industry, Mary's List's goal is to get people hired. Along with our partners, Cannaclusive, The Cannabis Cultural Association and REVEL, we're all coming together to create the support network needed for professionals in New York and beyond.”
February 4: Shine Papers will hold its nationwide Shine Day contest, with a total of 19 cities across the country taking part in the adventure. Inspired by Amazon’s Prime Day, Shine Day sends participants throughout their respective cities, in a scavenger hunt-style race for the ultimate prize of the famed “gold briefcase” - filled to the brim with Shine, Pure Leaf and Blaze By Shine swag. There will also be four digital hunts for those living outside the listed cities. CEO Dave Brown told Benzinga, “Our customers are the best out there and we don't take their loyalty for granted. Shine Day is our way of giving back to our clientele. It's a ‘thank you’ for riding with us and a glimpse into the exciting things we have in store.”
February 27 – March 1: The 5th Annual Emerald Conference will be held at Loews Coronado Bay Resort in San Diego, California. The conference brings together top scientists, extraction and cultivation professionals, and visionary business leaders in a collaborative environment that fosters groundbreaking advancements.
February 27: CannaImpact and Nextage Innovation announced their first annual Cannabis Tech Pitch Night, to take place in Tel Aviv, Israel. The purpose of this Pitch Night is to ignite innovation in the medical cannabis and tech industry and to provide pioneering startups with exposure to technology leaders, investors and potential partners, the organizers explained. The winning startup will receive a complimentary creative package to help push their venture forward, as well as mentoring from cannabis industry leaders.
April 8 –April 10: Cannabis Science Conference will host its first east coast event at the Baltimore Convention Center in Baltimore, Maryland. The Cannabis Science Conference, organized by CSC Events, LLC, will feature television icons and cannabis advocates, Montel Williams and Ricki Lake, along with over 75 expert presenters.
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.
Photo by Javier Hasse.
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