Cannabis Weekly Round-Up: Credit Suisse Locks Cannabis Trades

A renowned global bank with wealth management options has elected to block some cannabis trades from clients as part of its de-risking efforts after recent issues.

Also this week, a Canadian cannabis producer announced its intention to buy a retail operator managing nearly 100 stores in the country.

Keep reading to find out more cannabis highlights from the past five days.

Credit Suisse de-risking efforts leave cannabis out

Credit Suisse Group (NYSE:CS) clients have been unable to make some cannabis trades since March, a report from Reuters shows. The firm moved forward with a new risk management strategy after losing billions as a result of a blunder with Archegos Capital Management.

The initial list of cannabis companies blocked by Credit Suisse includes popular multi-state operators (MSOs) based in the US. These companies operate primarily out of the US, but are public on Canadian exchanges due to current American federal restrictions on the cannabis business.

Bloomberg reported that cannabis exchange-traded funds, and the shares of Canadian licensed producers Canopy Growth (NASDAQ:CGC,TSX:WEED), Aurora Cannabis (NASDAQ:ACB,TSX:ACB) and Tilray (NASDAQ:TLRY), were not on the list of blocked trades.

Experts have previously told the Investing News Network that US cannabis is the currently the most exciting aspect of the industry. At the same time, the federal status of the drug continues weigh down these names even as federal cannabis policy regulation in the country looks closer than ever.

So far it remains unclear whether the cannabis names already trading on senior US exchanges, mostly Canada-based operators, will be able to fully capitalize on any federal changes to cannabis rules.

Many experts do not expect sweeping cannabis legalization in the US, and are instead anticipating a piecemeal adjustment that would make it possible for MSOs to graduate to American exchanges.

Cannabis M&A keeps sizzling with producer buying retailer

Sundial Growers (NASDAQ:SNDL) told shareholders it will be purchasing Canadian cannabis retailer Inner Spirit Holdings (CSE:ISH,OTCQB:INSHF) in a deal worth approximately $131 million.

Inner Spirit manages the Spiritleaf network of retail stores and currently oversees 86 stores across Canada. According to the firm, it will hold over 100 stores by the summer.

“Inner Spirit has successfully created a franchise-based retail network that has grown from coast to coast and offers a differentiated and premium in-store experience to consumers,” Sundial CEO Zach George said in a statement after the news was released.

The two companies expect to see the transaction close sometime in Q3 of this year. Per each share held, Inner Spirit investors will get a combination of $0.30 in cash and 0.0835 of a Sundial common share.

Cannabis company news

• Organigram Holdings (NASDAQ:OGI,TSX:OGI) confirmed a change in management, saying Greg Engel will stop being CEO of the company. Chairman Peter Amirault will now serve as executive chairman and will oversee the company while the search for a new CEO goes on.

• PharmaCielo (TSXV:PCLO,OTCQX:PCLOF) issued its financial results for Q4 2020 as well as the full 2020 year. CEO Henning von Koss highlighted that the company has streamlined operations after a tumultuous 2020, alongside completing an extraction center.

• High Tide (TSXV:HITI,OTCQB:HITIF) announced the purchase of an 80 percent stake in hemp-derived CBD product manufacturer FABCBD. The firm touts an ecommerce platform with direct sales to consumers representing approximately 124,000 orders in 2020.

• Bhang (CSE:BHNG,OTCQX:BHNGF) obtained a management cease trade order as the firm anticipates a delay to its year-end financial filings.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.