Cannabis Weekly Round-Up: Securities Authority Investigates “Abusive” Scheme

- November 30th, 2018

The Investing News Network rounds up some of the biggest company and market news in the cannabis market for the past trading week.

During the past trading week (November 26 to 30), a provincial securities authority shared details of an investigation into a variety of cannabis companies.

A survey into the minds of cannabis investors from the Ontario Securities Commission (OSC) also made headlines throughout the week alongside a transition in exchanges for a company looking to enter the US market.

Here’s a closer look at what some of the biggest news was during last week’s trading period.

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Updates from provincial securities regulatory bodies

The securities authorities from BC and Ontario made entries into the cannabis space — one with an investigation relating to a few companies and the other warning investors of the way these companies are gaining exposure into the sector.

On Monday (November 26), the British Columbia Securities Commission (BCSC) made public its investigation on 11 Canadian Securities Exchange (CSE)-listed companies, four being cannabis primary operations. Peter Brady, executive director of the BCSC, said these companies were part of an “abusive to the capital markets” scheme.

The four cannabis related companies in question are Abattis Bioceuticals (CSE:ATT), Beleave (CSE:BE), Liht Cannabis (CSE:LIHT) and Speakeasy Cannabis Club (CSE:EASY).

A hearing is scheduled for December 7 to determine whether or not to extend a temporary ban imposed by the BCSC on certain trading activity.

SpeakEasy and Liht Cannabis issued statements in response to the investigation during the week.

On the other hand, after completing a survey of over 2,000 investors, the OSC published a report raising concerns about the reasons investors enter the industry.

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Thirty-two percent of the surveyed investors admitted to taking advice from friends and family when investing in the cannabis space, with only 18 percent taking advice from a financial expert or a portfolio manager.

“Those with low financial knowledge or who reported having a low risk tolerance were as likely as individuals with higher knowledge or risk tolerance to own cannabis investments,” the OSC wrote.

The survey also found a majority of the respondents who held cannabis stocks in their portfolio would primarily only own pot stocks.

US hemp-based CBD market pushes company to drop TSXV

LiveWell Canada (TSXV:LVWL) announced on Monday (November 26) it would be moving its stock from the TSX Venture Exchange (TSXV) onto the CSE.

The company is doing this as way to pursue an entry into the US market with its hemp-derived cannabidiol (CBD) products.

“The CSE embraces transforming companies like LiveWell who are growing beyond the Canadian borders,” David Rendimonti, president and CEO of LiveWell, said.

LiveWell retained the same ticker symbol and started trading on the CSE this week.

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.

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** This article is updated each week. Please scroll to the top for the most recent information**

Cannabis Weekly Round-Up: Shortage Leads Alberta to Pause Retail Applications

By Bryan Mc Govern, November 23, 2018

During the past trading week (November 19 to 23), Alberta halted the approval of new retail licenses as it faces a severe shortage of adult-use cannabis product.

The “unprecedented” decision from Health Canada to seek a removal of the federal cannabis license from a public company also made headlines throughout the week alongside our recap of the Arcview Investor Forum and the MJBizCon events in Las Vegas.

Here’s a closer look at what some of the biggest news was during last week’s trading period.

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Alberta says no to new and existing retail cannabis applications

On Wednesday (November 21) Alain Maisonneuve, president and CEO of the Alberta Gaming, Liquor and Cannabis (AGLC) issued a statement confirming the province would temporarily stop approving and taking applications for the operation of a cannabis retail shop due to the lack of product available.

The executive said despite the province signing deals with licensed producers to guarantee enough product for 250 stores, Alberta had only received 20 percent of what was ordered.

Maisonneuve announced AGLC’s priority is to supply private Alberta retailers and will therefore focus on securing product for those first.

Heather Holmen, a spokesperson for AGLC, told the Investing News Network (INN) the province will not reveal which LPs have failed to meet their contracts.

Las Vegas opens its doors to entire cannabis industry

The city of Las Vegas played host to the marijuana market as two events served investors with an opportunity to meet the companies up close. INN was in attendance of both shows and had the opportunity to speak with experts in the industry.

At the Arcview Investor Forum speakers such as Abner Kurtin, CEO of Ascend Wellness and Richard Carleton, CEO of the Canadian Securities Exchange (CSE) offered perspectives on the current public cannabis market.

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During his opening remarks Troy Dayton, CEO of The Arcview Group, reminded the investor audience how long of a path the cannabis plays still has with states, such as Michigan voting in favor for the legal adult-use of the drug.

In an exclusive interview following his panel, Carleton told INN the Canadian Securities Exchange (CSE) is eyeing 140 applications for new listings, which would represent about a year’s worth of business according to the leading executive, with 60 percent of those being marijuana-related.

At a predictions panel, Carleton explained he has seen the appetite from the cannabis investor audience switch from pure cultivation plays to companies investing in portfolios of intellectual property.

INN also had the opportunity to tour the current cannabis market in Las Vegas alongside investors in the space with stops at a production facility from MPX Bioceuticals (CSE:MPX) and a dispensary operated by Green Growth Brands (CSE:GGBpreviously known as Xanthic Biopharma.

Ascent Industries on the brink of getting federal license removed

Ascent Industries (CSE:ASNT) announced on Wednesday after an additional review from Health Canada, the agency had informed the company it intended to revoke the federal cultivation and dealer license for cannabis given to its LP subsidiary Agrima Botanicals.

“We haven’t seen this unprecedented move by Health Canada before,” Deepak Anand, vice president of business development and government relations with regulatory firm Cannabis Compliance, said in an email to INN.

The company informed shareholders that Health Canada found discrepancies “unauthorized activities with cannabis” which took place when the company was private.

Ascent intends to “exercise its right to be heard under the Cannabis Act and Cannabis Regulations in order to maintain its licences.”

In an email statement to the Investing News Network (INN), Health Canada said it informed Agrima Botanicals of its decision last Friday (November 16).

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: Ascent Industries and High Hampton Holdings are clients of the Investing News Network. This article is not paid-for content.

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