Cannabis firm backs out of market to focus on ‘profits and growth’

The difficulty of justifying a cannabis business for Neptune Wellness Solutions (NASDAQ:NEPT,TSX:NEPT) got to be too much. On Wednesday (June 8), the Quebec-based firm confirmed a plan to divest from its cannabis business and let go of half its workforce.

The staff reduction will result in the firm saving C$5.8 million. The company plans to sell its cannabis brands, Mood Ring and PanHash, as well as its Sherbrooke, Quebec, facility, which it claims was recently appraised at C$21 million.

“This strategic divestiture greatly simplifies our overall structure, enabling us to hyper-focus on those areas of the business we believe are best positioned for profitability and growth," Michael Cammarata, president and CEO of Neptune, said in a statement.

Shares of Neptune have taken a hit following the announcement. In New York the company fell in value by over 15 percent since Wednesday’s trading session. The company opened on Friday (June 10) at a price point of US$0.12 per share.

US mayors want to see banking reform

A report from MJBizDaily indicated the US Conference of Mayors have now thrown their support behind cannabis banking reform by way of the SAFE Banking Act policy.

The association representing 1,400 cities passed a motion to support the long standing cannabis policy proposal.

They want Congress to pass the bill in order to “to provide financial security for cannabis dispensaries and related companies and enhance public safety.”

The SAFE Banking Act would change federal regulations so cannabis business would not fall outside federal rule.

Experts have told the Investing News Network (INN) this policy being adopted could open the doors to US operators listing in senior US exchanges and engaging with financiers that are currently barred from entering the space. There's also been chatter about how this policy would help clear investment strategies for the Canadian market.

Cannabis company news

• Tetra Bio-Pharma (TSX:TBP,OTCQB:TBPMF)launched an Australian subsidiary focused on clinical research trials in the country. “These are very exciting times for us as we continue to drive scientific excellence and deliver on the promise of cannabinoid-derived transformative medicines to improve patient health and quality of life," Tetra CEO Dr. Guy Chamberland said.
• Columbia Care (NEO:CCHW,CSE:CCHW,OTCQX:CCHWF)kicked off production in a new cultivation facility in New Jersey. Nicholas Vita, CEO of Columbia Care, said New Jersey “will serve as a model for those east coast states transitioning to adult use in the near term.”
• Tilray Brands (NASDAQ:TLRY,TSX:TLRY)launched a new medical oil product formulated to help with sleep issues. “We are pleased to add a dedicated night oil to the Aphria medical portfolio and broaden our offering of effective medical cannabis products to patients with a wider range of needs,” said Blair MacNeil, president of Tilray Canada.
• Ayr Wellness (CSE:AYR.A,OTCQX:AYRWF)obtained a license to sell adult-use products in its new dispensary in Greater Boston. The company expects to manage two dispensaries in the area.