Cannabis Weekly Round-Up: The Amendment Fight for Bill C-45

- June 15th, 2018

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

This past trading week (June 11 to 15), the Canadian government revealed which recommendations from the Senate it will be challenging for its cannabis legalization act.

A look into some of the most recent cannabis stocks to launch in the public space and market news completes this Cannabis Weekly Round-Up.

Despite clearing the Senate, Bill C-45 was sent back to the government with 46 amendments. Health Minister Ginette Petitpas Taylor said particular issue was taken with the Senate’s amendments on homegrown cannabis and the restriction of promotional material from these companies.

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According to CTV News, the government indicated it will leave 27 changes, is recommending updates to two of the amendments and is refusing 13 directly.

One of the most contested issues with the bill is the right for Canadians to home grow cannabis, a proposed right the Senate and some provinces have fought for. Petitpas Taylor said there should be consistency since Canadians are allowed to make beer, wine and even tobacco.

As the market continues its expansion, more and more companies are becoming public in an effort to raise more working capital. INN wrote on a variety of recently launched stocks that have debuted. The companies included are: FSD Pharma (CSE:HUGE), Green Thumb Industries (CSE:GTII), MedMen Enterprises (CSE:MMEN) and The Green Organic Dutchman (TSX:TGOD).

Upcoming launches for investors to look out for include even more US multi-state cannabis operators. “You will see mergers of public companies with large multi-state private companies,” MPX Bioceuticals (CSE:MPX) CEO Scott Boyes said during a conference call this past week. “You may even see mergers of public companies, we’ve seen some consolidation up here north of the border already.”

Responding to a question during the call, Boyes said, “in terms of companies coming to the public markets I know some of the brokerage houses here in Toronto have just been overwhelmed with the interest they’ve received from US participants about going public in the Canadian market space.”

MPX’s conference call with investors and analysts was due to the company completing the purchase of a Canadian licensed producer (LP) called Canveda. MPX has differentiated itself by expanding as a multi-state operator of cannabis ventures in the US. The company holds assets in Nevada, Arizona and other legal cannabis jurisdictions; now MPX can count an official LP among those.

The company had already been working on another potential LP asset by way of a production facility in Owen Sound, Ontario. During the call, Boyes said MPX still plans to spend between C$3 and C$4 million for the construction of the Owen Sound facility.

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An analyst’s take on a new cannabis merger

A new research report issued by Greg McLeish, an analyst with Mackie Research Capital, shares a positive outlook on the potential for the Hiku Brands (CSE:HIKU) and WeedMD (TSXV:WMD) merger announced in April. Shareholders of WeedMD will be asked to vote on the transaction on July 11 in Toronto during a special meeting.

McLeish stamped the company with a “buy” rating and a share price target of C$3.75, a 175.7-percent return for investors, according to the report. “[The] strong cash position will allow management to continue with its capital expansion plans, pursue strategic acquisitions, and address potential working capital requirements,” McLeish wrote.

INN had the opportunity to catch up with True Leaf Medicine International (CSE:MJ,OTCQB:TRLFF) CEO Darcy Bomford on the new facility the company is working on for medical cannabis in Canada. The facility, located in Lumby, BC, will be capable of producing 15,000 kilograms of dried cannabis product per year. According to Bomford, the first phase of the facility will cost the company nearly C$12 million.

The executive told INN the current projection for True Leaf to start selling medical cannabis product is mid-2019 if all licensing matters are cleared appropriately once the facility is completed.

This past week, it was revealed Aurora Cannabis (TSX:ACB) will be acting as a leading investor in a C$7-million private placement for Choom Holdings (CSE:CHOO,OTCQB:CHOOF), a cannabis producer with two late-stage LP applicants and a focus on branding. Aurora will get 9,859,155 common shares of Choom at a price of C$0.71 per share, resulting in the massive producer obtaining an 8-percent stake in Choom.

“This investment by Aurora is a strong signal to our markets and our shareholders that Choom’s strategy meets with the highest standards in the industry,” Chris Bogart, president and CEO of Choom, said in a statement.

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: FSD Pharma, the Green Organic Dutchman and Hiku Brands are clients of the Investing News Network. This article is not paid-for content.

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

Cannabis Weekly Round-Up: Bill C-45 Gets Senate Approval

By Bryan Mc Govern – June 15, 2018

This past trading week (June 4-8), saw the official confirmation of Bill C-45 in the Canadian Senate by making it past the third reading, with a variety of proposed amendments.

A closer look at the effect the approval of Bill C-45 had on the cannabis public markets and updates from the US government completes this Cannabis Weekly Round-Up.

After offering last thoughts in favor and against –including several amendments to the act itself– the Canadian Senate voted 53 to 30 in favor of enacting Bill C-45, otherwise known as the Cannabis Act on Thursday (June 7). By clearing the third reading, the bill will now move back to the House of Commons for final a final call on the proposed amendments from the Senate.

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Among the reported amendments, the Senate recommended allowing provinces the option to decide whether or not to ban home growing, allowing the Senate to vote on the entry of novel cannabis products entry into the market and banning the promotion of companies in the space through merchandise.

“A number of the things senators are proposing are fundamentally Charter issues, so the government is going to get into legal challenges one way or another,” Deepak Anand, vice president of business development and government relations with Cannabis Compliance told the Financial Post.

Once the bill obtains royal assent from the House of Commons it will take between eight to 12 weeks for the official sale of recreational cannabis in Canada. Currently placing the start of legal sales close between September and October.

After Bill-C45 obtained the approval from the Canadian Senate, the Cannabis Council of Canada, a group representing the interests of licensed producers (LPs), issued a statement expressing concern for the “substantive amendments” to the bill in the last stages of its approval.

“Moving forward C3 encourages the government of Canada to reject the non-technical amendments to the act that carry unintended consequences, while also ensuring that the commitment made to Canadians, that adult use cannabis will be regulated and legalized in the summer of 2018, is fulfilled,” the council wrote.

Update from the US on the challenge to cannabis federal status

In the spirit of legalization this week US Sens. Elizabeth Warren and Cory Gardner, a Democrat from Maryland and Republican from Colorado announced the potential for the introduction of a new bill to end the federal target on cannabis. The two senators introduced their intentions in a joint press conference. Gardner gained a spotlight after securing a deal with US president Donald Trump to guarantee the safety of cannabis businesses in legal states, such as Colorado.

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“We are taking action to protect businesses that need access to basic banking services and we’re taking action to address systematic discrimination in our justice system…” Sen. Warren said in the joint press conference.

On Friday it was reported Trump said he is supportive of removing the federal ban on cannabis. “I know exactly what [Sen. Gardner is] doing. We’re looking at it. But I probably will end up supporting that, yes,” Trump told reporters when asked about the bipartisan effort from Sens. Warren and Gardner.

In Switzerland, the World Health Organization (WHO) listened to the testimony in the debate of rescheduling cannabis during the 40th meeting of the Expert Committee on Drug Dependence.

As reported by American For Safe Access, ASA Chief Science Officer, Jahan Marcu said the reports from WHO support the updating stance on cannabidiol (CBD), pure-tetrahydrocannabinol (THC), cannabis, and its extracts. “Hopefully, the work of the WHO will allow international leaders to expand access with policy recommendations and changes with reports showing that the public health risk of cannabis and its extracts are minimal,” Marcu said.

Despite the encouragement to the cannabis industry with Bill C-45, on Friday the public markets dipped into the red for a variety of pot stocks. As of 2:10 p.m. EST the Horizons Marijuana Life Science Index ETF had decreased in value 2.35 percent.

At the same time, the Candian index from The Marijuana Index showed a 2.38 decrease in value. This index tracks 24 stocks across the Canadian marijuana space, including Toronto Stock Exchange-listed companies like Canopy Growth (TSX:WEED) Aurora Cannabis (TSX:ACB), Aphria (TSX:APH), Cronos Group (TSX:CRON) CannTrust holdings (TSX:TRST).

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.

Find out what experts are saying about the future of cannabis edibles

 
Read our new report on the 2019 Lift Cannabis Business Conference
 

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