Investing in Cannabis 2016: Legalization and FDA Approvals to Revolutionize the Market

The cannabis market has come a long way in recent years. While marijuana is still considered a Schedule 1 drug under the Controlled Substances Act, the US has allowed patients with a variety of medical conditions to smoke marijuana in 23 states since 1996, and more states have moved to legalize both medical and recreational cannabis.
Alaska became the third state to allow individuals to grow, smoke and possess cannabis for recreational use, while Oregon became the fourth in July 2015. There have also been initiatives in the medical cannabis space, with both Texas and Georgia signing bills last year to legalize low-THC cannabis oil for the treatment of epilepsy and other chronic diseases.
Up north, Canada’s cannabis market had a major win in 2015 when the Liberal government won the federal election on October 19, 2015. Since the start of his electoral campaign, Justin Trudeau, the country’s elected prime minister, has made it clear that he will make legalizing marijuana across Canada a priority — he told CTV News  that, if elected, he would begin working to regulate and legalize marijuana “right away.”

Canadian election results boost cannabis market

Unsurprisingly, many Canadian cannabis stocks reacted favorably to Trudeau’s election, with gainers including Canopy Growth (TSXV:CGC), an authorized licensed producer under Health Canada’s Marihuana for Medical Purposes Regulations. Canopy CEO Bruce Linton told the Investing News Network (INN) that the election was an important milestone for the industry as it’s put legalization front and center and created dialogue about the fact that cannabis is a commonplace product.
Canopy’s share price surpassed the $2 mark around the time of the election and has continued to increase. “Within a week or so of the election, we traded up as high as $3.65, which took our market cap in excess of $300 million. It has drifted down a little bit, but we are still north of a $200-million market cap and trading huge volumes,” Linton said. “It is a highly liquid stock in part because there has been a lot more focus on the stock given the election. That whole campaign and the conclusion of it really did put a platform in place for our next two or three years.”
The company has also seen massive growth in 2015 overall. Prior the the election, Canopy, formerly known as Tweed Marijuana, acquired Bedrocan Cannabis in an all-stock transaction. At the same time, the company announced Q1 revenues of $1.7 million, the first publicly announced million-dollar quarter in the sector.
“Having the two dominant brands that defined who we were when the election occurred, there is a reason our companies had the primary trade, and it is because we have the best medical position and the best recreational position,” Linton said.
Canopy reported revenues of $7.0 million, a 300 percent increase over the three months ended June 30, 2015 and a 39 percent increase over fourth quarter fiscal year 2016.

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Infographic: The Future of Cannabis: Five Things Investors Need To Know

The latest infographic from Visual Capitalist takes a look at the growing recreational cannabis industry and outlines five things that investors interested in the space need to know.
Click here to view the infographic in the Visual Capitalist website.

Courtesy of: Visual Capitalist

Tweed Renews License to Produce and Sell Marijuana Under MMPR

Tweed Inc, a wholly owned subsidiary of Canopy Growth Corp. (TSXV:CGC), announced that it has renewed its license to produce and sell marijuana under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR).
As quoted in the press release:

The renewed license, which is valid for 14 months until January 19, 2017, allows Tweed to produce and sell up to 3,500 kg of dried marijuana. In addition, Health Canada has renewed Tweed’s supplemental license to produce fresh marijuana and/or cannabis oil, over the same period.

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Canopy Growth Closes Bought Deal Financing

Canopy Growth Corp (TSXV:CGC) announced that it has closed its bought deal financing, including the exercise in full of the underwriters’ over-allotment option, for aggregate proceeds of $14,376,035.
As quoted in the press release:

A total of 7,012,700 common shares in the capital of the Company (the “Shares”) were sold at a price of $2.05 per Share, for aggregate gross proceeds of $14,376,035.00 (the “Offering”). The Offering was underwritten by a syndicate of underwriters led by Dundee Securities Ltd. and including GMP Securities L.P., INFOR Financial Inc. and M Partners Inc.
Canopy intends to use the net proceeds from the Offering primarily for capital expenditures at facilities, operational expenses and general working capital purposes including salaries, general maintenance, utilities, costs associated with regulatory compliance, and costs associated with derivative product production and international programs.

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Zynerba Reports Third Quarter Financial and Operational Results

Zynerba Pharmaceuticals (NASDAQ:ZYNE) announced its financial and operational results for the third quarter, highlighting a successful IPO and the initiation of its Phase 1 clinical trial for ZYN002 cannabidiol (CBD) gel.
As quoted in the press release:

Successful IPO: Zynerba closed its initial public offering of 3,450,000 shares of common stock at a public offering price of $14.00 per share, before underwriting discounts, on August 10, 2015. This included the exercise in full by the underwriters of their option to purchase up to 450,000 additional shares of common stock at the public offering price, resulting in gross proceeds of $48.3 million. All of the shares in the offering were sold by Zynerba.
Phase 1 Clinical Trial Initiation for ZYN002 CBD Gel: Zynerba initiated a Phase 1 clinical trial for its ZYN002 cannabidiol (CBD) gel on October 20, 2015. The “Single Rising Dose Study in Normal Subjects and Patients with Epilepsy” study evaluates the pharmacokinetic profile and tolerability of ZYN002 in 32 healthy volunteers and in 12 patients with epilepsy. Results are expected in the first half of 2016.
New Vice President, Manufacturing: Zynerba appointed Brian Boyd as Vice President, Manufacturing, on September 14, 2015. Mr. Boyd is a senior pharmaceutical manufacturing executive with more than 30 years of experience driving superior manufacturing process outcomes in the biotechnology and pharmaceutical industries.  Most recently, he was Vice President, Process Development for Auxilium Pharmaceuticals and also held senior CMC and manufacturing roles with PolyMedix, Discovery Labs, Aviron/MedImmune Vaccines and US Bioscience/MedImmune. He earned a BS in Chemistry fromDenison University.
Six New Board of Directors Members: Zynerba appointed six new members to its board of directors on August 6, 2015, joining Chairman of the Board and CEO Armando Anido. The appointees offer extensive scientific, regulatory, commercial and financial experience and successful track records in development- and commercial-stage pharmaceutical companies. The new board members include Warren D. Cooper, MB, BS, BSc, MPFM, former CEO, Prism Pharmaceuticals; William J. Federici, MBA, CPA, Vice President and Chief Financial Officer of West Pharmaceutical Services; Thomas L. Harrison, LH.D, Chairman Emeritus of Diversified Agency Services, a division of Omnicom Group; Daniel L. Kisner, MD, former venture partner,Aberdare Ventures; Kenneth I. Moch, President, Euclidean Life Sciences Advisors; and Cynthia Rask, MD, board certified in clinical neurophysiology and former Acting Director, Office of Cellular, Tissue and Gene Therapies, US Food and Drug Administration.

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FBEC Worldwide to Form Strategic Partnership/Joint Venture With DuBe

FBEC Worldwide (OTCMKTS:FBEC) announced that it has signed a letter of intent to form a strategic partnership joint venture with DuBe, a hemp energy shot brand.
As quoted in the press release:

The two companies have come to terms on the development of a strategic partnership designed to fast track the expansion of the WolfShot™ and DuBe® hemp energy shots. The new partnership entity will also bring to market additional hemp, CBD, and cannabis related products. The Joint Venture will cross market and distribute both WolfShot™ and DuBe® family of products through one entity.
DuBe® already has a strong, national distribution network placing their hemp energy shot firmly in over 12 states, while FBEC Worldwide is set to begin distribution rollouts shortly. DuBe® has sold well over 1 Million units of their hemp infused energy shot generating over $1M in sales revenue. The new Joint Venture will bring FBEC Worldwide, Inc. instant revenue lines and cash flow to the Company.
DuBe® will also work closely with FBEC Worldwide’s Scientific Advisory team to bring new products to market including their current lines of hemp infused lip balm, CBD vaporizers, and rolling papers but also future lines like coffee, teas, power bars and infused liquor products. DuBe® has an existing relation with Green Cross of America in Nevada to develop THC and CBD brands of DuBe®.

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