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 (January 14 to 18), another Canadian licensed producer (LP) announced it is heading to a premier US listing.
Meanwhile, the Lift & Co. (TSXV:LIFT) cannabis expo offered a variety of trends and speakers for cannabis investors to follow, while new projections for the sale of adult-use cannabis also made headlines throughout the week.
Here’s a closer look at what some of the biggest news was during last week’s trading period.
Investing discussion during Lift expo in Vancouver
The annual edition of the Lift & Co. (TSXV:LIFT) cannabis expo took place last week (January 10 to 13), and offered a closer look at the trends companies and leaders of the industry expect.
During the business conference portion of the expo, investors heard from speakers on what strategy changes may come for public companies as the US market continues to grow in size and as investor interest in the space increases.
Brady Fletcher, managing director and head of the TSX Venture Exchange, said cannabis listings represent nearly C$40 billion of the total TMX Group (TSX:X) exchanges, with 45 issuers listed.
When asked if the exchange is anywhere close to changing policy and allow the entry of US operating cannabis companies, Fletcher said regulators can’t change policy based on sentiment on an industry.
“2019 is the year where people who are thinking about investing, or are investing, are going to be looking to see how these companies are executing on their promises, where the discipline and the trust related to what you say vs. what you do, delivering on financial results and responsible capital allocation, is going to be at a premium,” Peter Aceto, CEO of CannTrust Holdings (TSX:TRST), said during a separate panel.
As part of an investing panel, Neal Gilmer, analyst with Haywood Securities covering the cannabis market, explained that due to the high volatility in the stock market he expects there to be room for companies to be “opportunistic” and take advantage of wide swings in valuation for the pursuit of mergers and acquisitions.
“Scale is the name of the game, and being small and niche is going to be very hard from a cost perspective,” Jennifer Lee, partner and cannabis lead with Deloitte, told the Investing News Network following a cannabis data panel.
A new report from Arcview Group and BDS Analytics was published projecting that global spending on recreational cannabis will reach US$16.9 billion in 2019, representing a 38-percent increase from 2018.
Troy Dayton, CEO of Arcview Group, called 2018 as “a year of historic importance” for the entire industry cannabis, thanks in large part to investments from established market players in industries such as alcohol and tobacco. Moving past 2019, the firm’s research indicates recreational cannabis sales are set to hit US$31.3 billion in 2022.
The results of the report indicate there has been a “gold-rush” of US multi-state operators going public in Canada. Additionally, five Canadian LPs reached valuations of over US$100 million in 2018.
On Thursday (January 17), Canadian LP HEXO (TSX:HEXO), confirmed it will start trading on the New York Stock Exchange. The company will join fellow LPs Canopy Growth (NYSE:CGC,TSX:WEED), Aurora Cannabis (NYSE:ACB,TSX:ACB) and Aphria (NYSE:APHA,TSX:APHA).
The company will invest between US$100 and US$150 million for its new production strategy in the state.
“In New York we see an opportunity to create products that improve people’s lives,” Bruce Linton, chairman and co-CEO of Canopy Growth, said in a statement.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.