Cannabis companies in the US seeking to raise money have turned their attention to the Canadian public market, as the risk associated with the drug remains unaddressed.
Investors who have entered the cannabis space in Canada have seen a profusion of opportunities with new companies–and established ones–expanding their reach and product line into other markets. Across the border, though, lies additional opportunity with an added layer of risk.
The public cannabis market in the US has consisted of Canadian companies with listings on the OTC Markets as well as US-based companies making a push in various cannabis-related businesses, including operators of dispensaries and growing facilities, or companies offering their own cannabis-related products.
Besides OTC listings, the US-focused companies are able to raise money through another public exchange, the Canadian Securities Exchange (CSE). This network has been accepting companies operating in this space, in spite of the fuzzy legal issues.
However, besides the obtuse position of cannabis on a legal framework for investors, there have been companies that despite the promise, have left much to be desired, with some attempting to merely capitalize on the rush of money going into the business of marijuana.
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Alan Brochstein is a cannabis analyst with 420 Investor who follows new ventures in the U.S. and the development of existing public companies closely. He told the Investing News Network (INN) he makes a distinction between the lower tier companies seeking public funds and the more established multi-state operators.
Brochstein explained he looks for the differences between focused companies working on their goals and new companies which can sometimes be “reincarnations” of older ones. He said he’s not sure investors often see the difference between these two types of companies.
Despite the foggy regulatory position for cannabis, investors have clamored for an opportunity in a larger market share thanks to states like California and Nevada which legalized both recreational and medical sales of cannabis.
“The Canadian public markets offer access to a lot of capital, with a lot of certainty and a lot of speed, and there is this appetite among global investors to invest in a U.S. play,” MedMen CEO and co-founder Adam Bierman told CNBC. “Specifically, global investors want to invest in a U.S. play that has California exposure. Now is the time where it makes the most sense.”
MedMen is an operator based in California seeking to go public on the CSE. At the Canaccord Genuity Cannabis Investor Day Conference in Vancouver on (January 12), the company made its plans known to the investor audience.
Opportunity in the CSE comes with risk disclosures for investors
In order to list with the CSE, the exchange requests that companies are upfront with the risk factor shareholders could face when investing.
That request was largely met by signaling the Cole Memo as the protection for valid cannabis enterprises. This line of defense was erased in early January of this year when U.S. Attorney General Jeff Sessions rescinded the memo. Sessions has been vocal about his stance against marijuana, famously saying “good people don’t some marijuana.”
In 2013, former Deputy Attorney General Jim Cole sent a guidance memorandum, the Cole Memo, allowing states to legalize the drugs if their voters approved it, and as long as local officials kept it regulated within their state. This memo allowed the entrance of companies to the public markets, as long as they operated in legal states.
After Sessions established his own memorandum, the CSE announced it would be seeking a new risk disclosure from companies it believed needed them.
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Canadian Securities Exchange CEO Richard Carleton told Reuters they had reached out to 17 companies requesting public statements disclosing how the policy update from Sessions “could” impact their business.
“It seems to me the language has changed to ‘we’re relying on the principles of the Cole memo’ as opposed to the memo itself,” Brochstein told INN.
The list of companies the CSE contacted consisted of:
- CannaRoyalty (CSE:CRZ; OTCQB:CNNRF)
- Liberty Health Sciences (CSE:LHS; OTCBB:LHSIF)
- Alternate Health (CSE:AHG)
- MPX Bioceutical (CSE:MPX)
- Nutritional High International (CSE:EAT; OTCQB:SPLIF)
- Golden Leaf Holdings (CSE:GLH)
- iAnthus Capital Holdings (CSE:IAN)
- Marapharm Ventures (CSE:MDM)
- Friday Night Inc. (CSE:TGIF)
- Vodis Pharmaceuticals (CSE:VP; OTC:VDQSF)
- International Cannabrands (CSE:JUJU.A)
- CannTrust Holdings (CSE:TRST)
- NanoSphere Health Sciences (CSE:NSHS)
- Body and Mind (CSE:BAMM)
- High Hampton Holdings (CSE:HC)
- Wildflower Marijuana (CSE:SUN; OTC:WLDFF)
- Tinley Beverage Company (CSE:TNY; OTC:QRSRF)
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Discussions circling marijuana legality
Marijuana is an illegal substance classified as a schedule 1 drug, under the U.S. federal government. However, several states have worked to legalize the drug, either medically or recreationally and in some instances for both.
Thanks to Sessions’ update in policy, attorneys general all over the country can, if they chose to, enforce federal law when it comes to the cannabis companies. Despite this option, 18 attorneys general have joined forces in seeking Congress to enact policy that would allow companies to engage with U.S. banks.
Currently, the market is awaiting the agreement to keep the Rohrabacher-Blumenauer amendment. A policy protecting the marijuana industry by prohibiting the use of federal funds by the Department of Justice, to go after medical cannabis in the states where it has been declared legal.
“This is a wait and see type of moment and we really don’t know exactly how things are going to play out,” Brochstein said, since the continuation of Rohrabacher-Blumenauer depends on the pending budget policy.
Brochstein said the deadline is slated for February 9, but he has heard it could be pushed all the way to March. “They just keep, kicking the can. I rather them just kicking the can than to have a new budget that excludes Rohrabacher–Blumenauer,” Brochstein said.
Could the risk for investment in American cannabis be overblown?
When it comes to all the risk involved with the stocks on the CSE operating in the US, many advisors have, at times, dismissed these companies. This conversation surrounding these stocks was demonstrated at the Lift Cannabis Expo in Vancouver, as a panel of cannabis financial advisors said their attention was mostly on Canadian companies only–except for one panelist.
John Medland is a partner with Blair Franklin Capital Partners and acted as an outlier on his stance with cannabis stocks focused on the US market. During the panel, he said the risk associated with the US market is overblown.
“I think there is more opportunity for the CSE-listed companies than people sometimes give them credit for,” Medland told the audience. When asked why exactly he saw it this way, Medland later told INN he doesn’t see the worst case scenario becoming true for cannabis companies in the US.
“I think there is this grassroots movement from the states and the local government that the feds won’t want to push back on and also I don’t think it’s going to be popular politically,” Medland said.
Medland added the increase of companies operating in the US and seeking to list on the CSE could push for a resolution on the issue of clarity. However, he doesn’t expect market regulators to take a clear stance.
“[W]e could see some very large companies come north to list on the CSE and I think that may make the TSX uncomfortable and push the regulator to get more clarity,” Medland said.
Investor Takeaway
A risk is inherent with investments, but when it comes to the US cannabis market investors have to understand there’s an extra level of risk that comes from the unclear policy in the country. The unpredictability of the current administration makes it even harder for experts to predict the outcome of this case.
“I think the whole US cannabis market may not be accurately reflecting some of the risks in general,” Brochstein said when asked on the level of risk associated with investments in the US cannabis market.
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: Friday Night and High Hampton Holdings are clients of the Investing News Network. This article is not paid-for content.
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Ayurcann Holdings Corp. (CSE: AYUR) (the “Company” or “Ayurcann”) an integrated Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, announces the granting of stock options and restricted share units.
The Company has announced that it has granted incentive stock options to directors, officers, employees and consultants of the Company to purchase an aggregate of 1,000,100 common shares under the Company’s Stock Option Plan. Each option is exercisable at a price of $0.16 per common share, expires three years from the date of grant and vest six months from the date of the grant.
The Company has also granted restricted share unit grants, pursuant to the Company’s Restricted Share Unit plan, dated April 1, 2021, totaling 1,548,875 to certain eligible participants.
For further information, please contact:
Igal Sudman, Chairman, Chief Executive Officer and Corporate Secretary
Ayurcann Holdings Corp.
Tel: 416-720-6264
Email: igal@xtrx.ca
Investor Relations:
Ryan Bilodeau
Tel: 416-910-1440
Email: ir@ayurcann.com
About Ayurcann Holdings Corp.:
Ayurcann is a leading post-harvest solution provider with a focus on providing and creating custom processes and pharma grade products for the adult use and medical cannabis industry in Canada. Ayurcann is focused on becoming the partner of choice for leading Canadian cannabis brands by providing best-in-class, proprietary services including ethanol extraction, formulation, product development and custom manufacturing.
Neither the Canadian Securities Exchange nor its Regulation Services Provider have reviewed or accept responsibility for the adequacy or accuracy of this release.
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Keep reading to find out more cannabis highlights from the past five days.
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Tilray delays critical shareholder meeting
On Thursday (April 15), Tilray (NASDAQ:TLRY) announced it will be postponing its shareholder vote on the fate of its merger with Aphria (NASDAQ:APHA,TSX:APHA). It will take place on April 30 instead of April 16.
Neither cannabis company offered an explanation for the change. Tilray has asked shareholders to participate in this vote regardless of how many shares they may hold. “Tilray stockholders who have not already voted, or wish to change their vote, are strongly encouraged to do so,” the company said.
This news came days after Aphria shareholders overwhelmingly voted in favor of the business transaction, with a total of 99.38 percent of shareholders voting for the deal to continue. Confirmation from Aphria Chairman and CEO Irwin Simon indicated the partnership was en route to being complete.
This past week Aphria also released financial results for the third quarter of its 2021 fiscal year, in which the firm highlights the overall direction of the company with the Tilray deal.
“We expect to have a tremendous runway for long-term sustainable growth as we build upon our existing foundation in Canada and internationally by increasing the scale of our global operations,” Simon said in a statement.
Cannabis retailer celebrates digital trend
As part of a celebration for April 20, otherwise known as 420, Fire & Flower Holdings (TSX:FAF,OTCQX:FFLWF) announced the dissemination of a non-fungible token (NFT) digital art piece.
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Bidding for the piece, named “Non-Fungible Toke“ started at a price of C$4.20. The retailer plans to donate the proceeds to two charities, Second Harvest and Less.
The latter is designed to counter the carbon footprint of blockchain technology, a common criticism drawn against the rise of NFTs and other novel technologies.
As of 11:00 a.m. EST on Friday (April 16), the NFT bid was up to C$169.11.
Cannabis company news
- The Valens Company (TSX:VLNS,OTCQX:VLNCF) issued its financial report for the first quarter of its 2021 fiscal year. In its results, the company highlights a net revenue uptick of 24.7 percent from the previous quarter, resulting in C$20 million for the period.
- Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF) closed a public offering of 5 million subordinate voting shares at a price of C$50 each for total gross proceeds of C$287.5 million. The company celebrated its financial position after an offering in January, which will lead to the pursuit of merger and acquisition targets.
- Australis Capital (CSE:AUSA,OTCQB:AUSAF) appointed Jason Dyck as its new chief science officer and chairman of the firm’s scientific advisory board. Dyck previously served as an executive at Aurora Cannabis (NASDAQ:ACB,TSX:ACB), leading the scientific efforts for the cannabis producer. “I look forward to providing AUSA with advice and direction in its scientific efforts towards bringing innovations to market with immediate and significant commercial appeal,” Dyck said.
- Truss Beverage, a cannabis drinks venture co-owned by Molson Coors Beverage Company (NYSE:TAP,TSX:TPX) and HEXO (NYSE:HEXO,TSX:HEXO), released the details of its new lineup of infused beverages. Six new drinks will become available around the summer and are intended to pair with the season.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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Partnerships with Minardi Law , Minorities for Medical Marijuana, CultivatED, and the Georgia Justice Project will include clinics and virtual events across Florida , Georgia , and Massachusetts
Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company based in the United States announced today a series of expungment clinics located throughout south and central Florida as well as virtual events in Georgia and Massachusetts . The clinics are part of the Company’s celebration of the 50 th anniversary of 420.
During the month of April, Minardi Law has hosted expungment clinics and will be hosting two more as follows:
- Releaf Patient Appreciation Day, April 17 th ( Valrico )
- First Annual 4/20 Event ( St. Petersburg Beach )
At these clinics, an attorney will be present to review records and see if someone is eligible for a sealing or expungment of their records. As part of the events, Trulieve will be helping cover the costs for finger prints, legal fees, and court costs.
Trulieve is working with Minorities for Medical Marijuana (“M4MM”) to host a 4/20 Expungement Clinic, part of M4MM’s Project Clean Slate. This event will take place on Saturday, April 24, 2021 , from 9:30am – 4:30pm at Riviera Beach City Hall. Anyone seeking to take place in this event is required to register in advance at http://trulieve.cc/expungementpreregistration .
In addition, Trulieve is sponsoring the First Friday Series , a weekly virtual event from the Georgia Justice Project to help Georgia citizens with record restrictions, and is also sponsoring the Fellowship Presentation and Expungement Clinic being offered through CultivateEd and GBLS on Friday, April 23 from 3:00pm – 4:00pm . You can register for the Massachusetts expungement clinic in advance here: HTTPS://BIT.LY/2Q655KK
“Our mission as a company has always been to improve people’s lives,” said Trulieve CEO Kim Rivers . “We’ve always been dedicated to improving the communities we call home. Partnering with Minardi Law , Minorities for Medical Marijuana, Georgia Justice Project and CultivatED on these clinics was a simple decision for us; we encourage anyone seeking help with the expungement process to attend one of these clinics in your own state to start the process.”
For more information about Trulieve and the April expungment clinics, please visit www.Trulieve.com .
About Trulieve
Trulieve is primarily a vertically integrated “seed-to-sale” company in the U.S. and is the first and largest fully licensed medical cannabis company in the State of Florida . Trulieve cultivates and produces all of its products in-house and distributes those products to Trulieve-branded stores (dispensaries) throughout the State of Florida , as well as directly to patients via home delivery. Trulieve also has operations in California , Massachusetts , Connecticut and Pennsylvania. Trulieve is listed on the Canadian Securities Exchange under the symbol TRUL and trades on the OTCQX market under the symbol TCNNF.
To learn more about Trulieve, visit www.Trulieve.com .
View original content: http://www.prnewswire.com/news-releases/trulieve-announces-expungement-programs-in-several-states-as-part-of-420-celebration-301270340.html
SOURCE Trulieve Cannabis Corp.
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Seth Rogen’s New Cannabis Brand are Now Available at Apothecarium Dispensaries in San Francisco , Berkeley and Capitola
The Apothecarium is offering cannabis from Houseplant, the cannabis lifestyle brand founded by Seth Rogen and Evan Goldberg at its five California dispensaries. The Apothecarium has three San Francisco locations (Castro, SOMA and Marina ) and one each in Berkeley and Capitola (outside of Santa Cruz ).
“With the vast number of dispensaries in California , we put a lot of effort into identifying the right ones that align with Houseplant’s values,” said Seth Rogen , Co-Founder of Houseplant. “The Apothecarium shares the same commitment to creating a strong consumer experience that we pride ourselves on and we are thrilled to bring our three initial strains to their stores in the Bay Area.”
Houseplant is launching with three flower strains, all of which will be available at The Apothecarium, including: Diablo Wind (sativa), Pancake Ice (sativa) and Pink Moon (indica). Like their founder’s groundbreaking film “Pineapple Express”, Houseplant strains are named after weather phenomena. Each strain will be sold in a custom tin.
“We are so proud to be one of the very first dispensaries in California to offer Houseplant to our customers,” said Ryan Hudson , CEO and co-founder of The Apothecarium. “Seth, Evan and everyone at Houseplant love and respect cannabis as much as we do. We simply cannot wait to share their beautiful and delicious flowers with our guests.”
“We’ve been working with the Houseplant team for more than a year and are grateful to have a partner that shares so many of our values, including an emphasis on cannabis education, quality, reform of cannabis laws and beautifully designed, recyclable packaging.”
“Seth has been hands-on during the process, spending time with our store managers to make sure they know the products and how much care has gone into vetting and selecting the best strains. We think our guests are going to love Houseplant.”
About The Apothecarium
The Apothecarium is recognized as one of the nation’s premier cannabis dispensaries, with an emphasis on education via in-depth one-on-one consultations from highly trained cannabis consultants. The company was founded by three first cousins and two family friends in 2011. Our dispensaries are known for providing educational events that are open to the public at no cost — and for welcoming seniors, first-time dispensary visitors, and people with serious medical conditions. The Apothecarium’s flagship San Francisco dispensary was named the best-designed dispensary in the country by Architectural Digest . Patients and customers may order at our dispensaries or online for pickup or delivery at apothecarium.com [apothecarium.com] .
The Apothecarium is committed to giving back to the communities we serve. We have donated more than $400,000 in cash to community groups and nonprofits — plus more than $300,000 worth of in-kind donations.
All Apothecarium dispensaries continue to implement safety measures to protect guests and team members. Protocols include strict social distancing inside and outside the dispensaries, a mask requirement for everyone inside the dispensaries, no contact check-in procedures and ongoing sanitizing throughout the day.
CA Licenses: C10-0000523-LIC; C10-0000522-LIC; C10-0000515-LIC, C10-0000738-LIC, C10-0000706-LIC
View original content: http://www.prnewswire.com/news-releases/houseplant-launches-at-the-apothecariums-california-dispensaries-301270397.html
SOURCE TerrAscend
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