Cannabis Weekly Round-Up: California Votes for Cannabis Banks

During the past trading week (May 20 to 24), the California Senate voted in support of a bill that could open the doors to state-chartered cannabis banks.

Shareholder support for an upcoming critical vote on a major acquisition deal made headlines, while the issuance of new retail licenses to public players also caught attention.

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

California votes for state-chartered cannabis banks

On Tuesday (May 21), the California Senate approved legislation that would allow the creation of state-sanctioned banks capable of participating in the marijuana market.

“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.

Adesso said he hopes to see other states follow suit with California’s bill.

The legislation must now be approved by the State Assembly and California Governor Gavin Newsom.

Attorney Robert Selna with California-based Wendel, Rosen, Black & Dean, told CNBC that the bill, if approved, “will help cannabis companies pay the rent.” However, he is unsure how it may interact with federal law, which still prevents banks from conducting business with US marijuana companies.

Shareholder vote deadline looms

Following the announcement of a blockbuster deal under which Canopy Growth (NYSE:CGC,TSX:WEED) is seeking to acquire an option to buy Acreage Holdings (CSE:ACRG.U,OTCQX:ACRGF) at a time when cannabis becomes legal in the US, the two firms have had to face questions from shareholders.

On Thursday (May 23), Canopy Growth issued a package to shareholders breaking down the deal to gain support for a favorable vote. Shareholders of the Canadian firm face a voting deadline of June 17.

Also on Thursday, private investment firm Cresco Capital Partners voiced its support 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,” Matt Hawkins, managing partner at Cresco, said in a letter to investors, according to a report from MarketWatch.

Market updates

Manitoba has confirmed an additional round of retail license winners in the province. Public retailers Westleaf (TSXV:WL,OTCQB:WSLFF), High Tide (CSE:HITI,OTCQB:HITIF) and Fire & Flower Holdings (TSXV:FAF) are the selected marijuana firms for stores in Altona, Niverville and Swan River, respectively.

Marijuana producer Tilray (NASDAQ:TLRY) announced on Thursday that its Portugal-based subsidiary has obtained a standard manufacturing license and Good Manufacturing Practices (GMP) certification based on standards from the European Medicines Agency.

“This licensing and certification marks a critical milestone for our growth in Portugal and Europe,” said Sascha Mielcarek, managing director for Tilray in Europe. “The next phase of GMP certification will allow us to utilize the full capacity of our multi-faceted facility and continue to serve more patients in-need.”

The cannabis firm plans for its Tilray Portugal Unipessoal subsidiary to serve as its hub in Europe in terms of export for product. “This license and certification further enhances Tilray’s capacity to serve international markets such as Germany and other EU member states, as well as non-EU jurisdictions that recognize EU GMP certification,” the company announced.

Multi-state operator Columbia Care (NEO:CCHW) announced a brand new collaborative medical study on the effectiveness of proprietary cannabidiol (CBD) tablets for pain management in patients with inflammatory arthritis.

The study is designed to inspect pain management done with the ClaraCeed tablets alongside existing non-opioid treatments already in use by the nearly 100 patients enrolled for the research.

“We are also collecting safety information regarding the use of medical cannabis in the rheumatologic population, many of whom are taking numerous other medications,” said Dr. Jill Landis, lead on the study and board certified rheumatologist at Westmed Medical Group, Columbia Care’s partner in the research.

On Wednesday (May 22), Dixie Brands (CSE:DIXI.U,OTC Pink:DXBRF) announced the launch of dissolvable, hemp-derived CBD-infused tablets for beverages. A subsidiary of the public firm is launching the novelty product under the name Fizz Tabs.

The launch line will include three different items. According to the company, these tablets are set to dissolve in water and have effects lasting between four to six hours.

“The line expansion creates an on-the-go option for consumers and promotes a powerful addition to wellness regimens,” the company indicated in a press release.

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 and High Tide are clients of the Investing News Network. This article is not paid-for content.

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

Cannabis Weekly Round-Up: Pot Exec Second Highest Paid in 2018

By Bryan Mc Govern, May 17, 2019

During the past trading week (May 13 to 17), one of the leading US Democratic candidates voiced his support for marijuana decriminalization, but not full legalization yet.

The announcement that a cannabis CEO cracked the top five executives paid in 2018 made headlines, while a new acquisition deal in the Canadian cannabis market caught attention.

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

Data from Bloomberg confirms that Brendan Kennedy, CEO of Tilray (NASDAQ:TLRY), was the second highest paid CEO in 2018. According to the report, Kennedy was awarded US$256 million in the year Tilray went public and saw its meteoric rise in the stock market.

The cannabis executive received the bulk of his compensation in the year in the form of “special awards.” On his whole payment, Bloomberg wrote:

Kennedy’s 2018 compensation consisted of US$425,000 in salary, an equal-size bonus and restricted shares and stock options worth US$5.82 million and US$25.1 million, respectively, when they were granted. At year-end, the shares had swelled to US$52.9 million and the options to US$202.3 million. The value of his package has dropped about 25 percent so far this year as the stock has continued to tumble. It closed Thursday at US$47.59.

Tilray’s CEO placed only behind Elon Musk, CEO of Tesla (NASDAQ:TSLA), in Bloomberg’s list. The rest of the top five are Bob Iger, CEO and chairman of Walt Disney (NYSE:DIS); Tim Cook, CEO of Apple (NASDAQ:AAPL); and Nikesh Arora, CEO and chairman of Palo Alto Networks (NYSE:PANW).

Leading Democratic presidential candidate supports marijuana decriminalization

A Joe Biden campaign spokesperson told CNN this past week that the US presidential candidate is in favor of legislation to decriminalize marijuana. However, the representative wouldn’t confirm support for a full legalization process for the drug.

“He supports decriminalizing marijuana and automatically expunging prior criminal records for marijuana possession, so those affected don’t have to figure out how to petition for it or pay for a lawyer,” Andrew Bates, a Biden campaign spokesman, told the news outlet.

Bates explained that Biden, if elected, would let the states continue on the path of legalization as they elect to do so. Biden would also seek to make it easier to reseach cannabis by recategorizing the plant as a Schedule 2 drug.

According to a recent Ipsos poll, Biden is ahead of the Democratic candidate pack with 29 percent support from registered voters in the US. Most candidates for the left have voiced their support for some form of marijuana reform.

New acquisition moves forward in the Canadian market

On Thursday (May 16), The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) confirmed an all-stock deal worth C$48 million to acquire Blissco Cannabis (CSE:BLIS,OTCQB:HSTRF).

Navdeep Dhaliwal, CEO of Supreme Cannabis, said in a press release that Blissco has been able to create a “distinct and authentic” brand centered around premium products for the wellness market.

“This transaction will allow Blissco to focus its business around the production and commercialization of cannabis oils and topicals for the premium wellness consumer,” Dhaliwal said.

According to the agreement, if shareholders approve the acquisition, Blissco shares will be converted to a 0.24 of a common share of Supreme Cannabis.

Blissco is set to become the health and wellness lead operation of Supreme Cannabis if the deal goes through. The two firms need approval from just over 66 percent of Blissco shareholders to complete the transaction.

Bankers in the US show support for marijuana companies

A new survey in the US shows bankers support the idea of banks being allowed to service the marijuana industry and its businesses.

“Like the rest of us, bankers are on the fence as to which direction the economy is headed,” Mark Jacobsen, president and CEO of Promontory Interfinancial Network, said in a press release. “The good news is that bankers may be feeling more positive about their industry as this quarter’s survey shows banker confidence on its first upswing in five quarters.”

A total of 82 percent of bank executives surveyed from 453 different banks showed support for companies that commercially sell marijuana. The biggest show of support came from areas in the west and midwest of the US.

Survey respondents represent over 8 percent of the banks in the US.

Market updates

On Monday (May 13), Acreage Holdings (CSE:ACRG.U,OTCQX:ACRGF) confirmed its interest in entering into a real estate investment trust play.

The company confirmed its intention to sell real estate assets to GreenAcreage Real Estate (GARE) for these to be leased back to Acreage.

Acreage holds a 20 percent interest in the parent company of GARE, GreenAcreage Management.

Shares of Columbia Care (NEO:CCHW), a recently publicly launched marijuana company with operations in the US, was added to a new US-focused exchange-traded fund (ETF).

Operated by Horizons ETFs Management (Canada), the Horizons US Marijuana Index ETF (NEO:HMUS) offers investors exposure to the US cannabis investment market with an index of multi-state operators.

According to Horizons ETFs, Columbia Care’s C$2 billion valuation makes the company eligible for a maximum weighting of 10 percent in the fund’s portfolio.

A report from the New York Post on Sunday (May 12) indicated that executives from retail giants Walmart (NYSE:WMT) and Target (NYSE:TGT) are pursuing launch plans for the sale of cannabidiol (CBD) products.

Interest for these products has risen as other established retailers, such as CVS Pharmacy (NYSE:CVS) and Walgreens, a Walgreens Boots Alliance (NASDAQ:WBA), kicked off sales of these novelty products.

Executives from Aurora Cannabis (NYSE:ACB,TSX:ACB) questioned interest in marijuana-infused beverages in the Canadian market.

According to a report from BNN Bloomberg, during a conference call with investors, Cam Battley, chief corporate officer at Aurora Cannabis, said the company has focused on areas of the market known to attract consumer demand based on what legal US states have seen in their market evolution.

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.