Cannabis Weekly Round-Up: Aurora Completes CanniMed Takeover

- January 26th, 2018

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

This past trading week (January 22-26) Aurora Cannabis (TSX:ACB) completed its blockbuster acquisition of CanniMed Therapeutics (TSX:CMED), and despite some reports saying it was considering bringing along Newstrike Resources (TSXV:HIP), the smaller company was left out of the deal. New data from the Canadian government on cannabis consumption on the sentiment of financial advisors on the industry complete this week’s Cannabis Weekly Round-Up.
Wednesday (January 24) saw the conclusion of the arduous fight for acquisition between Aurora and CanniMed. In the end, the two Licensed Producers (LPs) managed to complete the acquisition in friendly terms. The $1.1 billion transaction will present shareholders of CanniMed with the opportunity to pick a pay package of 3.40 Aurora shares or a cash and shares combination. Aurora will only allocate $140 million cash to the shareholders choosing the cash and shares bundle.
Newstrike, the company in the process of getting acquired by CanniMed in an effort to dismiss the Aurora bid, suffered a 19.23 percent decline by market closure on Wednesday. As part of the canceled deal, Newstrike will receive $14.1 million, which CEO Jay Wilgar said will be used towards their Niagara greenhouse facility.
On Monday the Investing News Network (INN) reported a survey from the Horizons ETFs Management team in which investment advisors revealed their bullish sentiment on the entire cannabis market. The survey accounts for the first quarter of 2018 and showed an 18 percent increase from the previous survey on the positive feeling about the marijuana industry.
“The Canadian Cannabis industry experienced explosive growth last year and advisors believe that will continue,” Steve Hawkins, president and Co-CEO of Horizons ETFs said.

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Regulatory and security updates from government officials

On Friday Health Canada said after nearly 1000 inspections it had determined the current requirements are not up to par with the “existing evidence of risks to public health and safety,” for the security requirements of the Access to Cannabis for Medical Purposes Regulations (ACMPR).
Previously Licensed Producers (LPs)  were asked to keep all the produced cannabis in a high-security vault with constant visual surveillance. Now the agency is asking for LPs to store cannabis products in a specific secure area within their facilities.
“This area must be secured with physical barriers, an intrusion detection system, and 24/7 visual monitoring and recording capability,” Health Canada wrote. “A record of the identity of every person entering or exiting the storage area must be kept, and access to those areas must be restricted to those whose presence is required by their work responsibilities.”
Health Canada also announced it will no longer require video surveillance at all times in the areas where the plant is being cultivated. The agency didn’t provide a specific timeline of when exactly these new mandates have to be implemented by LPs.
Mexico legalized the use of medical cannabis and for scientific reasons last year, but now the country’s tourism minister more should be done. Minister Enrique de la Madrid said the state of Quintana Roo and Baja California Sur should allow recreational marijuana, according to Reuters.
The minister also tweeted this opinion stemmed from personal research. “I’m convinced that we have to debate it, as part of a solution to the violence and insecurity in Mexico,” de la Madrid tweeted. The two states mentioned by de la Madrid host two of busiest cities for tourism in Mexico, Cancun and Los Cabos.

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Canadian banks more involved in the cannabis industry than what was revealed before

Last week it was revealed Bank of Montreal would co-run a $200 million equity financing for Canopy Growth (TSX:WEED) with GMP Securities, amove that had been expected for months as the legalization of recreational cannabis looms and the companies in this space sought more legitimization for their businesses. This change in policy from some of the big banks still provides a huge change for the cannabis industry at large.
A report from The Globe and Mail this week revealed the Canadian Imperial Bank of Commerce (CIBC) created a $20 million credit line for MedReleaf (TSX:LEAF) in April 2017. According to the report, public filings showed the loan but didn’t mention the specific bank but now after the move from Bank of Montreal CIBC was outed by MedReleaf. Neil Closner, CEO of the company said he reached out to the bank saying they should not be robbed of the spotlight for being one of the first banks to engage with a Canadian cannabis company.
In another legitimizing move for the industry, Canaccord Genuity announced its expanding their coverage of cannabis by adding a new managing director tasked with overseeing the development of companies in the US. At the Canaccord cannabis investor day conference this past week, several companies focused on the American market had the opportunity to present their plans to an investor audience.
During the past trading week, the Marijuana Life Sciences Index ETF (TSX:HMMJ) decreased in value 0.62 percent. As of 1:07 EST on Friday, the ETF traded at $22.56. Since it’s inception the ETF has gone up in value 119.9 percent and so far this year index is on the rise by 19.07 percent.
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.

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

Cannabis Weekly Round-Up: Newstrike Recovers After Dip from Acquisition Voting Results

By Bryan Mc Govern – January 19, 2017
This past trading week (January 15-19) the shareholders of Newstrike Resources (TSXV:HIP) made their voices heard in the decision to be acquired by CanniMed Therapeutics (TSX:CMED). and highlights from the Lift Cannabis Expo in Vancouver complete this week’s Cannabis Weekly Round-Up.
This week the Investing News Network (INN) published a guide for cannabis investors evaluating the potential of the exchange-traded funds (ETFs) available in the market.
As part of our coverage from the Lift Cannabis Expo this past weekend, INN interviewed Hilary Black, director of patient education and advocacy at Canopy Growth (TSX:WEED) about her work with patient advocacy and the reasons investors should be aware of the patient outreach their picks make. Similarly, David Argudo, CEO of High Hampton Holdings (CSE:HC) talked with INN on the medical cannabis market in California, where his company is focused on. Argudo’s political past puts him in a unique position leading a cannabis operator listed on the Canadian Securities Exchange with a focus on the US market.
A panel of analysts also convened during the business day of the conference, to discuss a variety of topics surrounding the cannabis market. The panel included cannabis analysts like Daniel Pearlstein, principal of healthcare and special situations research with Eight Capital and John Medland, a partner at Blair Franklin Capital Partners.

Newstrike shareholders vote on CanniMed acquisitions

Since the vote took place on Wednesday (January 17), Newstrike’s share price has remained steady with a 5.97 percent increase, despite an initial 16.42 percent dip on the day of the vote.
A day after this positive news for CanniMed, the company trying to acquire Newstrike and avoid the aggressive takeover bid from Aurora Cannabis (TSX:ACB; OTCQB:ACBFF), they announced a delay to the critical vote of their own shareholders, deciding whether or not to complete the Newstrike acquisition. The reason for this delay? To “allow discussions regarding a possible transaction with Aurora Cannabis,” according to CanniMed.

Florida market could see race for medical cannabis market share between two public companies

This week iAnthus Capital Holdings (CSE:IAN; OTCQB:ITHUF) made official its acquisition of the assets from GrowHealthy Holdings, which will get a grand entrance into the growing Florida market for medical cannabis. The company will be facing opposition from Liberty Health Sciences (CSE:LHS; OTCQX:LHSIF), a cannabis operator focused in the opportunity in Florida.
In the US market this past week California Attorney General Xavier Becerra entered a group of fellow attorneys general asking Congress to allow the banks to engage cannabis companies, where state laws have made it a legal business. Currently, marijuana is an illegal drug on a federal level, preventing banks from creating accounts or participating in any way with these companies.
“The future of small and local licensed businesses has been clouded by the Trump Administration’s relentless attacks on progress, in conflict with the will of voters,” Attorney General Becerra said. “Congress has the power to protect a growing $6.7 billion industry and the public safety of our communities.”
A change in this situation for US companies would be monumental, for comparison in Canada, the Bank of Montreal announced this past week it would participate in a deal to raise $175 million for Canopy Growth through a bought deal offering alongside GMP Securities.
“The fact that Canopy doesn’t do business in the states is probably the reason the Bank of Montreal were willing to get involved with Canopy. Definitely brings a whole new life to the marijuana space,” Andrew McCreath commentator with BNN said after the announcement.
During the trading week, the Marijuana Life Sciences Index ETF (TSX:HMMJ) went up 13.02 percent. As of 12:28 EST on Friday, the ETF traded at $22.49. Since its inception last year, the index has gone up 119.41 percent.
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: High Hampton Holdings is a client of the Investing News Network. This article is not paid-for content.

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