The Week in Cannabis: Stocks Trade on Federal Bill (MORE Act), Profits, Major Mergers and Acquisitions
Cannabis stocks traded this week, helped by strong earnings reports, big M&A announcements and the reintroduction of the Marijuana Opportunities Reinvestment and Write-off Act (LEARN MORE) in Congress, after the failure of the previous year’s version in the Senate.
The MORE law would remove marijuana from the Federal Controlled Substances Act (CSA) while addressing the new conviction for cannabis offenses and preventing federal agencies from banning safety clearances or benefits due to use of cannabis.
If passed, the bill would also provide extensive assistance to the Small Business Administration (SBA) for those affected by the war on drugs.
The MORE law enjoys the support of more than 150 organizations across the country, including the Drug Policy Alliance (DPA).
The Senate is preparing its own reform bill.
Benzinga Cannabis content is now available in Spanish at El Planteo.
On the financial market front, HEXO Corp (TSX: HEXO) (NYSE: HEXO) has signed agreement to buy Canadian family cannabis producer Redecan for $ 925 million in cash and stock.
Under the agreement, the purchase consideration of $ 925 million will consist of $ 400 million in cash and $ 525 million in Hexo shares, assuming a price of $ 7.53 per share.
Once the transaction is finalized, Redecan shareholders will own approximately 32% of Hexo’s shares on a pro forma, undiluted basis.
The transaction is expected to close in the third quarter.
TEFs were all traded over the five trading days this week:
- the ETFMG Alternative Harvest ETF (NYSE: MJ): Gained nearly 7%.
- the AdvisorShares Pure Cannabis ETF (NYSE: YOLO): advanced 7%.
- the AdvisorShares Pure US Cannabis ETF (NYSE: MSOS): 4.7% increase.
- the Cannabis ETFs (NYSE: THCX): Up 10.5%.
- the ETF Amplify Seymour Cannabis (NYSE: CNBS): Up nearly 9%.
- the SPDR S&P 500 ETF Trust (NYSE: SPY) closed the week up 1.26%.
Politics, science and data
At a Senate budget hearing on Wednesday, Francis Collins, director of the National Institutes of Health (NIH) shared positive remarks on the therapeutic potential of psychedelics such as psilocybin and MDMA, as well as the progress made in access to medical marijuana for federal research.
“We are making progress. You might know that in the past, researchers who wanted to do clinical studies with marijuana had all kinds of limitations, ”Collins said, adding that in the past five decades, there had only been all kinds of limitations. a single source of marijuana for federal research purposes.
“This is of course a problem because it is a limited access opportunity.”
The Brightfield group released a report on the US CBD market, speculating that the US hemp-derived CBD market will reach $ 5.3 billion in retail sales in 2021. This would imply a 15% increase from sales of 4.6 billion dollars in 2020.
Additionally, Brightfield Group expects sales to reach $ 16 billion by 2026, driven by accelerated growth in ingestibles (tinctures, capsules, beverages). New consumers are expected to enter the market as prices continue to fall and access grows.
Another report from Research and markets said the global medical cannabis market is poised to grow at a CAGR of 23.9% over the next seven years and is expected to reach $ 49.1 billion by 2028.
new York and Colorado joins several states that have already banned delta-8 THC made from hemp.
In May 2021, the U.S. adult cannabis markets collectively generated $ 7.9 billion in tax revenue, according to the Draft Marijuana Policy (MPP).
The report, which uses figures from each legalized state, shows how legal cannabis sales improve local tax bases and often fund various state services and programs, including social equity, reintegration programs, initiatives. public health and support for law enforcement.
Minnesota Democratic Governor Tim Walz has signed a bill legalizing the flower of medical cannabis, approved by the House of Representatives.
the Illinois House passed cannabis legislation intended to improve the cannabis regulations and tax law of 2019 regarding a licensing lottery that had been delayed by the pandemic, controversy and legal disputes for more than a year.
The new measure would create two new cannabis dispensary lotteries each awarding 55 licenses compared to the original lottery, which was to award 75 in total. There were many issues with the original lottery, including delays. After only 21 out of 900 applicants got perfect scores, making them eligible for the lottery, the whole process was put on hold.
Financing and mergers and acquisitions
New Mexico Governor Michelle Lujan Grisham continues to support cannabis-related activities. Following the governor’s signing of the Cannabis Regulations Act in April, Bright Green Corporation confirmed its $ 300 million investment in a cutting-edge agricultural ecosystem, which will make New Mexico one of the nation’s largest cannabis manufacturing and research centers.
Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) closed three previously announced acquisitions and significantly strengthened its commercial footprint in Pennsylvania. The company has acquired:
- TerraVida Holistic Centers LLC and GVB Holding Group LLC in a transaction valued at $ 62.5 million in cash and 3,013,500 Class A shares (valued at approximately $ 60 million and The Healing Center, LLC for 110.3 million, including $ 55.15 million in cash and $ 55.15 million in Class A of Verano Subordinate Voting Shares and Class B Proportional Voting Shares.
- NSE Pennsylvania, LLC.: Verano separately completed the acquisition of all issued and outstanding interests in NSE Pennsylvania, which enabled it to launch three medical marijuana dispensaries in Keystone State.
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) will buy a producer of quality nutrients, House and garden, for about $ 125 million.
GrowGeneration Corp. (NASDAQ: GRWG) Acquired Hydroponics Supply Center and Grow Design Innovator The Harvest Company, with its footprint at 55 locations across the country.
HempFusion Wellness Inc. (TSX: CBD) (OTC: CBDHF) will purchase the CBD brand Sagely Naturals in a $ 25 million stock and cash transaction.
Power REIT (AMEX: PW) will purchase a greenhouse cannabis growing and processing facility in Michigan for approximately $ 18.5 million.
Auxly Cannabis Group Inc. (OTCQX: CBWTF) sells KGK Science Inc. to Myconic Capital Corp. (NEO: MEDI) for a maximum amount of $ 16.5 million.
Herve closed a $ 3 million oversubscribed Series A financing round.
4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) revealed that its system-wide pro forma revenue (a non-GAAP measure) increased 26% sequentially to $ 31.4 million in the first quarter as of 2021. Revenue reported by GAAP was $ 23 million.
Chalice marks, previously operating under the name Golden Leaf Holdings Ltd. (CSE: CHAL) (OTCQB: GLDFF), released its first quarter results with record revenue of $ 5.5 million, up 18% year-over-year.
Evogene Ltd. (NASDAQ: EVG) released its first quarter financial results with revenue of $ 333,000, compared to $ 75,000 for the same period of 2020.
TILT Holdings Inc. (CSE: TILT) (OTCQX: TLLTF) on Tuesday released its financial results for the first quarter of 2021. The company generated revenue of $ 46.8 million in the first three months of the fiscal year, that is a 15% growth from one year to the next.
Vext Science, Inc. (OTCQX: VEXTF) (CSE: VEXT) released its unaudited first quarter financial results with revenue of $ 9.16 million, compared to $ 4.1 million for the same period of 2020.
Jushi Holdings Inc. (CSE: JUSH) (OTCQB: JUSHF) revealed that its revenue in the first three months was $ 41.7 million, up 29% sequentially.
Gage Growth Corp. (CSE: GAGE) (OTC: GAEGF) Released First Quarter Financial Results With Revenue Growth Of 67.9% Quarter-Over-Quarter And 219.4% Year-Over-Year , respectively, to reach $ 17.6 million.
Planet 13 Holdings Inc.(CSE: PLTH) (OTCQX: PLNHF) revenue increased 41.8% year-over-year to $ 23.8 million in the first quarter of 2021.
Auxly Cannabis Group Inc. (TSX – XLY) (OTCQX: CBWTF) released its financial results for the first quarter of the year, with a net loss of $ 10.49 million, compared to a net loss of $ 12.74 million for the same period a year ago.
Find full details of these and other income reports at the Benzinga Cannabis Income Center.
High Tide Inc. (TSXV: HITI) (OTCQB: HITID) (FRA: 2LYA) is set to debut on the Nasdaq Capital Market.
Vertical well-being announced the early expansion of its The Organic Candy Factory (OCF) brand through a new listing with Walmart.com. OCF is available for purchase from Walmart.com as 6 x 2.5 oz bags.
MATTIO Communications started a full-service influencer marketing company under the name Confluence Agency.
Saucey Farms and extracts announced that it has reached an agreement with TPCO Holding Corp. (NEO: GRAM.U) (OTCQX: GRAMF), operating under the name of the parent company.
The parent company, which will manage the manufacture and distribution of all Saucey products in California, brings together global icon and entrepreneur Shawn “JAY-Z” Carter, the Roc Nation entertainment powerhouse, the premier direct-to-consumer platform for consumers. consumers of California Caliva and the leading cannabis manufacturer Left Coast Ventures. The offering will include a premium line of exotic cannabis flower varieties, all-natural cannabis oil cartridges and “kiefed” pre-rollers.
Mother Society appointed the members of its social equity fund board, including George Atallah, Marcia Dyson, Jeff Gray, Faith Leach, Carmen Perez, Mary Pryor and Angela Rye.
To learn all about the latest management changes, also check out:
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Main picture by Ilona Szentivanyi. Copyright: Benzinga.