This past trading week (November 13 – 17) saw the official marijuana bill from Quebec and a new development in the Aphria against TMX Group situation. Market news completes this week’s cannabis weekly round-up.
The province of Quebec officially tabled its cannabis legislation on Thursday (November 16), the plan outlined its regulations for marijuana as it becomes fully legal in Canada next year. Highlights of the bill include:
- Legal possession age will be 18 for cannabis
- Personal use growth of cannabis will be illegal
- Zero tolerance for consumption and driving. “The message we want to send is: if you consume cannabis, don’t drive,” said Transport Minister André Fortin.
- If smoked, cannabis must be consumed in the same locations as tobacco
- “It is prohibited for an adult to possess, in a place other than a public place, more than 150 grams of dried cannabis,” a CBC report indicated.
The Société Québécoise du Cannabis (SQC) will open 15 stores dedicated to cannabis products. A report indicated experts suggested a price of $7 to $10 per gram of cannabis.
Aphria (TSX: APH; (TSX:APH; OTCQB:APHQF) has faced uncertainty against the Toronto Stock Exchange regarding its business in the US. The TMX Group, which is in charge of the TSX and the TSXV has indicated its reservations regarding cannabis companies pursuing opportunities in a market that has not fully legalized cannabis. Technically in the US, on a federal level cannabis is illegal, some states have legalized it already. A new report from the Globe and Mail said the TMX might end up asking Aphria to choose between its listing on the TSX and giving up its assets in the States.
“We don’t know where this dialogue is heading,” Aphria’s CEO Vic Neufeld said. “There is no urgency from them.” Aphria has been facing this situation since the TMX first expressed its potential evaluation and even challenges to stocks with US interests. Aphria holds a substantial stake in Liberty Health Sciences (CSE:LHS; OTCBB:LHSIF) a company investing in cannabis opportunities in the state of Florida. Aphria also holds stake in the Arizona-based company Copperstate Farms.
Aurora Cannabis (TSX:ACB) announced this past week a new offering deal with Canaccord Genuity worth approximately up to $100 million. Terry Booth, CEO of Aurora, said this new capital will “accelerate” their expansion plans both in Canada and internationally.
“Upon closing of this Offering, and with the anticipated gross proceeds on conversion of our recently accelerated warrants, Aurora’s pro-forma cash position will exceed an unprecedented $340 million,” Booth said in a statement.
National Access Cannabis (TSXV:NAC) announced it expanded into the province of Alberta, with a new care clinic in Edmonton’s Old Strathcona District. The clinic is space designated for giving consultation to patients inquiring about cannabinoid therapy.
“NAC is committed to delivering secure, safe, and responsible access to legal cannabis and we’re pleased to expand our trusted clinic model to the residents of Edmonton,” Mark Goliger, CEO of National Access Cannabis said.
In a move that caused an uproar for CanniMed Therapeutics’ (TSX:CMED) stock, Aurora Cannabis has placed takeover offer in what would represent one of the biggest cannabis deals in Canada. The offer, according to the Financial Post, represents an all-stock acquisition for $582 million, meaning $24 per share. CanniMed told shareholders to wait for the company to review this deal thoroughly.
“We advise shareholders to take no action until such time as the board has had the opportunity to fully consider and make a recommendation regarding the unsolicited offer,” the company said. Over the past five trading days, CanniMed’s stock increased 40 percent.
Vahan Ajamian, a cannabis analyst with Beacon Securities, told the Canadian Press if this deal goes through it could spark merger and acquisition deals all over the industry.
The Canadian marijuana ETF enjoyed a substantial growth to its value this past trading week. Over the five-day trading period, the Marijuana Life Sciences Index ETF (TSX:HMMJ) saw a 7.89 percent increase. As of 1:10 p.m. EST on Friday, the ETF traded at $12.85. Since its inception earlier this year, the index has gone up 25.46 percent.
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.