VIDEO — Cannabis Update May 2019
The Investing News Network brings investors in the cannabis space an update on some of the biggest developments during the month of May.
As another month ends, the Investing News Network provides a recap of some of the most critical May developments in the public marijuana space.
Investors are gearing up for a key vote for an acquisition in the public cannabis sector. As the deadline for votes nears, two investment firms have issued statements to investors on which stance to take.
Meanwhile, in California, a newly proposed bill would allow for the implementation of cannabis banks in the state, sidestepping a federal ban on financial institutions participating in the space due to the illegality of the drug at the federal level.
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California gets closer to offering banking relief
The California Senate voted in favor of Bill 51 in May, which would allow the creation of state-chartered cannabis banks.
“The bill would provide for the licensure and regulation of cannabis limited charter banks and credit unions for the purpose of providing banking services, as defined, to cannabis businesses,” the text of the legislation indicates.
“Hopefully, it will open up the possibility of more banks serving cannabis companies in California,” Marc Adesso, veteran cannabis attorney with law firm Waller Lansden Dortch & Davis, told the Investing News Network in an email statement.
Support and concern for Acreage/Canopy deal
Two separate investment firms issued commentary to investors in May advising how to vote on Canopy Growth’s (NYSE:CGC,TSX:WEED) proposed acquisition of multi-state operator Acreage Holdings (CSE:ACRG.U,OTCQX:ACRGF).
Mick McGuire, portfolio manager for Marcato Capital Management, issued a letter to shareholders calling the deal a “value-destructive transaction.” He advised other Acreage investors to vote against it. Marcato indicated that it owns approximately 2.7 percent of Acreage shares.
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“…Marcato believes it is highly imprudent for Acreage to sell itself today at the proposed valuation, with so much unlocked growth and value embedded in (Acreage),” McGuire wrote in the letter.
However, another investment firm, Cresco Capital Partners, confirmed it will vote positively for the deal as an Acreage investor.
“From an Acreage perspective, it now has 58 million shares of Canopy Growth injected in the company to continue to make strategic acquisitions and expand across the country. In an industry where capital still costs a premium, this infusion is a tremendous differentiator,” Matt Hawkins, managing partner at Cresco Capital Partners, wrote to investors, according to a report from MarketWatch.
Watch the video above for more on what happened during the month of May.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Acreage Holdings is a client of the Investing News Network. This article is not paid-for content.