Cannabis Weekly Round-Up: Branding Could Become the Key Metric for Shareholders

- February 23rd, 2018

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

This past trading week (February 20-23) the TSX Venture issued their annual Top 50 companies based on specific growth metrics, the list included a variety of cannabis companies representing the industry. Market news and an original report from INN complete this Cannabis Weekly Round-Up.

The Investing News Network (INN) published a report evaluating the impact branding for cannabis companies will have in the minds of investors when it comes to making long-term stock selections.

A market report from Eight Capital analyst Daniel Pearlstein asked investors in this space to look at more variables rather than focusing on production scales and capacity metrics. Pearlstein envisions cannabis as an ingredient for brands, and finding what brands will stick around for consumers will be critical.

Steven Feldman co-founder and director of Liberty Leaf Holdings (CSE:LIB), who also manages the popular @CanadaPotStocks Twitter account told INN shareholders are starting to ask more questions on branding and are looking at the industry as a retail business. Feldman said the investor psyche has moved past what company will be the biggest or growing the largest amount of product.

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Market news

The cannabis industry was well represented in the annual TSXV 2018 Top 50 list of companies in the Canadian exchange. Emerald Health Therapeutics (TSXV:EMH), Cronos Group (TSXV:MJN) Revive Therapeutics (TSXV:RVV), Radient Technologies (TSXV:RTI), and Hempco Food and Fiber (TSXV:HEMP) all received placements in the complete list. While Emerald Health and Radient earned top spots in their respective sub-categories, clean technology and life sciences and diversified industries respectively.

The exchange rewarded the companies on this list based on their market capitalization growth, share price appreciation, and trading volume of the companies.

CannTrust Holdings (CSE:TRST) announced this week it received conditional approval to upgrade its shares from the Canadian Securities Exchange (CSE) into the Toronto Stock Exchange (TSX).

Eric Paul, CEO of CannTrust said this move represented an important milestone for the company. The official listing is subject to CannTrust fulfilling some conditions before a May 21 deadline. As part of the upgrade to the premier exchange in Canada, the company also had to make some adjustments to their interests in the US.

As part of its application to list on the TSX, CannTrust has agreed to assign its interest in the United States intellectual property and corresponding licensing arrangements held by the joint venture company Cannabis Coffee & Tea Pod Company Ltd. (“CCTPC”).  The assignment was made to an affiliated company of CannTrust’s joint venture partner Club Coffee for $1. The parties have agreed that the U.S. interests shall be assigned back to CCTPC for $1 in certain circumstances, including (i) federal legalization of marijuana in the United States, and/or (ii) the TSX revising its rules to allow its listed companies to have an interest in U.S. assets which are directly involved in the marijuana business.

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Lawsuit asking for changes to US marijuana federal laws

On Monday (February 19) INN took a closer look at the lawsuit at the center of the cannabis policy debate in the US. A group of plaintiffs argued in favor of a delisting marijuana as a Schedule I drug under the Controlled Substance Act.

Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York heard arguments from the plaintiffs and the defendants, the Department of Justice, Attorney General Jeff Sessions and the DEA. This case earned notoriety after Sessions rescinded the Obama-era guidance protecting the cannabis industry from federal powers.

Jake Plowden, co-founder and deputy director of one of the named plaintiffs, The Cannabis Cultural Association (CCA) said the results of this case could have the potential of “ultimately ending global cannabis prohibition.”

During the past trading week, the Marijuana Life Sciences Index ETF (TSX:HMMJ) went down in value 0.5 percent. As of 1:44 EST on Friday, the ETF traded at $18.07. Since it’s inception the ETF has gone up in value 76.2 percent and so far this year index has decreased in value by 4.6 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: Two Provinces Reveal Deals in Place for Recreational Market

By Bryan Mc Govern – February 16, 2018

This past trading week (February 12-16) two Canadian provinces revealed the companies they plan to work with in terms of the supply and sale of recreational cannabis, once the drug becomes fully legal in the country. The launch of a new cannabis ETF and the details of expansions plans complete this Cannabis Weekly Round-Up.

The Investing News Network (INN) reported on the holdings that launched with the latest cannabis exchange-traded fund (ETF) to enter the market. During its first day of trading on Wednesday (February 14), the Horizons Emerging Marijuana Growers Index ETF (AQN:HMJR) was represented by Cann Group (ASX:CAN) and Auscann Group Holdings (ASX:AC8) and The Hydropothecary Company (TSXV:THCX) as its heaviest holdings.

Horizons indicated the inclusion of Australian cannabis companies will be allowed to represent approximately a 21 percent of the total holdings in the emerging index. This new ETF is available for investors on the Aequitas NEO Exchange.

INN had the opportunity to chat with Chris Wagner, CEO of Emerald Health Therapeutics (TSXV:EMH) on the framework for the legalization of cannabis in Canada and the development of their company in the industry at large.

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Two provinces award licenses and deals for cannabis adult-use in Canada

In regulatory news, this week two provinces announced the winners of coveted agreements to supply cannabis, once Canada fully legalizes the drug later this year. The province of Quebec revealed six firms that got an initial agreement with its alcohol agency on the various amounts of cannabis it will be allowed to send. Hydropothecary, a local Quebec producer, was awarded the highest amount of cannabis, with an initial deal for 20,000 kilograms of products in the first year of recreational sales.

On Friday (February 16) Manitoba also revealed the companies it planned to work alongside for their cannabis plans. Another local company, Delta 9 (TSXV:NINE), in partnership with Canopy Growth (TSX:WEED), was approved for its proposal to operate retail cannabis locations in the province.

The other groups awarded these deals were National Access Cannabis (TSXV:NAC), Tokyo Smoke, a subsidiary of Hiku Brands (CSE:HIKU), and an unnamed grouping compromised of Avana Canada, Fisher River Cree Nation, Chippewas of the Thames, MediPharm Labs and US-based retailer Native Roots Dispensary.

As an attempt to gain a “better understanding of cannabis use in Canada” the country’s statistics agency will conduct a national survey to track the impact of adult-use legalization.

Each quarter, a sample of 12,000 households will receive an invitation to complete the 21-question online survey,” Statistics Canada revealed as part of their new initiative. “In addition to frequency of use, amount and types of product consumed, and prices paid, Canadians will be asked about changes in their behavior or consumption patterns.”

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New greenhouse facilities plans revealed

After announcing its separation with Aphria (TSX: APH), Liberty Health Sciences (CSE:LHS; OTCQX:LHSIF) announced this week its new plan to construct state-of-the-art greenhouses and processing facilities in Florida. The company completed the purchase of a 387-acre parcel of land in Gainesville, Florida for the construction of their Liberty 360° Innovation Campus.

Liberty 360 will enable us to expand our production capabilities and provide a broader range of products and delivery methods to Florida’s patients in need,” George Scorsis, director, and CEO of Liberty said. “It will also serve as our center for new product innovation and development as we remain on the leading edge of the medical cannabis industry.”

Cannabis Wheaton Income (TSXV:CBW), a streaming deal cannabis company, announced on Friday a new operation alongside Peter Quiring, a greenhouse builder for the development of a new facility in Leamington, Ontario.

The partnership officially will be with newly formed subsidiary GreenhouseCo. Initial plans revealed by the company show 1.4 million square feet of greenhouse as its phase 1 operation. It was revealed GreenhouseCo will also pursue an ACMPR license for the cultivation and sale of cannabis.

“The Facility will be purpose-built with state-of-the-art automation and operate under a 100% closed-loop water recycling system,” Cannabis Wheaton revealed. Its president Hugo Alves said this project was exciting for Cannabis Wheaton because of its scale and technological sophistication.

During the past trading week, the Marijuana Life Sciences Index ETF (TSX:HMMJ) went down in value 3.36 percent. As of 1:00 EST on Friday, the ETF traded at $18.13. Since it’s inception the ETF has gone up in value 76.88 percent and so far this year index has decreased in value by 4.23 percent.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Editorial Disclosure: Hiku Brands Company is a client of the Investing News Network. This article is not paid-for content.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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