Cannabis Weekly Round-Up: MORE Act Vote Faces Delay

A critical cannabis bill in the US is facing a voting delay in Congress.

Meanwhile, a popular US cannabis operator, known for its single-state dominance, announced an expansion into a new market this week.

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

MORE Act will see its day on the floor

Voting on the Marijuana Opportunity, Reinvestment and Expungement Act (MORE Act) was scheduled for next week on the floor of US Congress. But a new delay has emerged, taking it off that schedule.

The issue appears to be related to optics, according to Politico reporter Sarah Ferris, who said the timing of the vote has been criticized by moderates in the House who want to see a focus on COVID-19.

NEWS: House Dems have punted a vote on a marijuana legalization bill to the lame duck.

The vote was slated to be next week. But many moderates were furious that the House would vote on weed before taking up a Covid bill, though other Dems called it a social justice imperative.

— Sarah Ferris (@sarahnferris) September 17, 2020

Despite the delay, House Majority Leader Steny Hoyer said the MORE Act, which among other things would deschedule cannabis in the eyes of the federal government, is crucial for the House Democrats and will be put up for a vote before the year is over.

“Right now, the House is focused relentlessly on securing agreement to stave off a damaging government shutdown and continuing to do its job addressing the COVID-19 pandemic,” Hoyer said in a statement.

The bill has momentum as the mentality changes on cannabis businesses in the US, but it’s unlikely the MORE Act will clear the Senate as it stands. That said, analysis from one expert suggests any Senate challenges won’t change the strides being made in the industry.

“Although there may be hurdles in cannabis reform in the US, the trajectory of current sales growth is unaffected by this,” Purpose Investments indicated in a note published last Friday (September 11).

“Any reform at the federal level will cause a step function in valuations of these operators, but explosive growth can still continue under current regulations,” the firm added.

Trulieve opens the door to more state operations

Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF) will enter the Pennsylvania market thanks to new acquisition deals with PurePenn and Pioneer Leasing & Consulting, known together as PurePenn, and with Keystone Relief Centers, operating as Solevo Wellness.

“We believe Pennsylvania is one of the most attractive cannabis markets in the United States and these acquisitions align with our focus on expanding within the northeast,” said Trulieve CEO Kim Rivers.

While the company has assets in California, Massachusetts and Connecticut, its main known market is Florida. Trulieve is a dominant operator in the sunshine state, commanding a leading position in sales amid state-focused companies and its fellow multi-state publicly traded cannabis operators.

Trulieve will pay US$46 million to buy PurePenn, divided into a US$27 million portion comprised of shares in the company and US$19 million in cash. The deal includes a potential earn-out payment of US$60 million in shares of the company.

For the Solevo deal, the Florida entity will pay US$20 million, split into US$10 million in cash and US$10 million in shares. Similar to the PurePenn deal, there is a potential earn-out payment of US$15 million in Trulieve shares given milestones attached to the acquisition are met.

Cannabis company news

• Innovative Industrial Properties (NYSE:IIPR) confirmed to investors a Q3 dividend of US$1.17 per share of common stock in the company, a 10 percent increase from the previous quarter. The REIT entity indicated this is the eighth dividend increase since the company went public in 2016.

• Avicanna (TSX:AVCN,OTCQX:AVCNF) told the market its operations in Latin America received a big boost this week. The company’s pharmacy in Bogota, Colombia, obtained Good Preparation Practices certification, alongside an authorization for the sale of medical “compounded pharmaceutical products” by the National Institute for Drug and Food Surveillance (INVIMA).

• Fire & Flower Holdings (TSX:FAF,OTCQX:FFLWF) issued its latest quarterly financial report, confirming a net loss of C$29.1 million for the period ended on August 1. “We believe the Company is well positioned to expand its footprint in the Ontario market and expects to have access to the necessary capital to support our growth plans,” said Trevor Fencott, CEO of Fire & Flower.

• Zenabis Global (TSX:ZENA) confirmed the arrival of a new CEO this month as part of a corporate update to shareholders.

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