Cannabis Weekly Round-Up: US Legalization Push Causes Stock Run
A potential new attempt at US cannabis reform has sent shockwaves through the stock market; meanwhile, a report shows Canadian budtenders aren't loving their jobs.
Cannabis market participants learned this past week about another potential legalization bill that is set to make an appearance in the US. Stocks rose in response to this long-shot attempt at reform.
In Canada, there’s an increasing challenge in retaining budtenders at cannabis dispensaries across the nation.
Keep reading to find out more cannabis highlights from the past five days.
Stocks run on possible US cannabis reform
Multiple reports indicate that Democrats in the US Senate will introduce a new cannabis legalization bill next week.
The bill, in whatever form it takes, is expected to face a difficult road given the divide in the Senate and the pressures of a midterm election cycle in the short term. In fact, there’s been division even among Democrats about how to proceed with federal cannabis reform. Currently the drug is illegal at the country level, but states have been allowed to set their own rules and establish thriving licensed markets.
In a report, Bloomberg explains how cannabis would be regulated if the bill were to clear the Senate:
The Cannabis Administration and Opportunity Act would remove marijuana from the list of drugs covered by the Controlled Substances Act (CSA). States, however, can still maintain and create prohibitions on production and distribution of marijuana.
Marijuana Moment reported that details on the new bill are being kept secret at the moment, but it is expected to remove cannabis from the CSA, set a federal tax for all cannabis sales and in some form promote “equity in the industry and (provide) an avenue for relief for those who have faced federal cannabis convictions.”
Cannabis stocks went on a run following speculation surrounding the new legalization bill. Tilray (NASDAQ:TLRY,TSX:TLRY) saw one of the biggest jumps in share value, according to Bloomberg.
The Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) saw a 5 percent uptick on Thursday (July 14) following the news, showing a momentary swing in momentum for cannabis names in the public market.
When it comes to US operators, companies embedded in the market also saw their numbers increase thanks to the possibility of cannabis reform finally arriving.
Report highlights Canada's low budtender retention
According to a new study from an analytics firm, there’s been little to no retention of retail talent in the Canadian cannabis market — the report points to a serious loss of budtenders at dispensaries in the country.
The numbers from Headset show that 56 percent of budtenders who worked at any point in the past year no longer work in the cannabis market, as per a report from the Canadian Press.
The data shows there’s higher retention in Alberta among new employees, but the province has seen higher losses of seasoned staff compared to Ontario, BC and Saskatchewan, the four regions examined.
Seven percent of cannabis retail workers hired between June 2021 and May 2022 ended up walking away from the gig before 60 days on the job, while 6 percent did not last past their 70th day. Lastly, 10 percent of budtenders didn’t last more than 180 days.
Cannabis company news
- Organigram Holdings (NASDAQ:OGI,TSX:OGI)reported its Q3 fiscal results, showing a C$2.8 million loss despite a 90 percent uptick in revenue. “We achieved record net revenue results which we expect to surpass again in Q4 on the strength of new product listings, increased retail sales momentum and international shipments,” CEO Beena Goldenberg said.
- MediPharm Labs (TSX:LABS,OTCQX:MEDIF)entered into an agreement to sell its Australian subsidiary and facility for C$6.2 million. The deal is expected to close within 90 days of the announcement. “The Company and OneLife Botanicals will also enter into a transition services agreement to allow for the two companies to smoothly transition products and services produced in the facility, and to work together on future commercial opportunities,” the firm said.
- The Valens Company (NASDAQ:VLNS,TSX:VLNS)shared its Q2 financial results, reporting a C$160 million net loss even though its revenue was up 3.5 percent from the previous quarter to C$24 million. CEO Tyler Robson said the company’s cost-cutting measures have resulted in C$15 million in savings so far this year. He expects savings to accelerate in future quarters to reach C$20 million.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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Bryan is a Senior Editor with INN. After graduating from the Langara journalism program he did some freelance reporting with community newspapers in British Columbia. He initially wrote about the life science space for INN and now spends his time covering the marijuana market, from Canadian LPs to US-based companies, and the impact of this sector on investors.
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