The Morning Blunt
Volume 3| Issue 5
November 5, 2018
“ Maintain a culture of respect.“
According to the Bank of Montreal, who assessed the global cannabis market, if more countries end prohibition on cannabis the sector could be worth an estimated $194B USD in the next seven years. While Canada leads the pack in the cannabis industry, US and European markets are expected to legalize in time, which may tilt the industry in favor of other global cannabis leaders.
69% of mergers and acquisitions have been conducted using only stock according to data gathered by Dealogic, while 30% have been a mix of stocks and cash. Only 1% of cannabis deals have been done entirely with cash.
Canadian cannabis firm Aphria began trading on the New York Stock Exchange on Friday under the ticker “APHA” at $11.75 with little action early in the day. Stocks were generally up Friday apart from Tilray who was down 1.84%.
Texas-based CBD-infused beverage producer Puration Inc. has seen a spectacular rise in popularity which has shot the company to the top of the most traded stocks on the entire OTCBB. Puration began as a water purification company before acquiring a patented cannabis extraction method.
Cannabis stocks and cannabis penny stocks were skyrocketing last week with The Green Organic Dutchman and Aleafia Health Inc. leading the way. Oddly The Green Organic Dutchman rose without the announcement of any news, while Aleafia rose at the announcement of a non-binding term sheet where Aleafia stands to acquire 10% equity stake in CannaPacific.
With supply shortages, regulatory red tape, and Wall Street cutting cannabis forecasts, The Motley Fool’s Sean Williams warns cannabis investors to adjust their expectations for the sector. Take a look at some of the expected setbacks the cannabis industry is facing in Canada.
Sugarmade Inc. announced the acquisition of Sky Unlimited LLC, raising its revenue guidance for 2019 from $30M to $70M. The highly accretive acquisition comes with the website Athena United which offers hydroponic brands to several growing agricultural cultivation sectors.
As Measured by the Global Cannabis Stock Index, cannabis stocks nullified the rally from mid-August, declining 22.3% in October. The index declined by 37.2% in 2018 but is still up 56.9% from October 2017.
The Drugs of Dependence Bill Amendment 2018 provides amendments to reform the Drugs of Dependence Act 1989 regarding possession of a personal amount of cannabis and consequential amendments to the Criminal Code (Act) 2002.
The Hong Kong Cannabis Symposium on Thursday last week brought together 200 attendees and executives from around the world to discuss misconceptions about cannabis and investment opportunities for the sector. The CEO of KushCo Holdings projects that legalization will be a trend that hits Asia.
Former White House Communication Director Anthony Scaramucci announced that Trump will legalize cannabis after the midterm elections. Scaramucci isn’t the first to rumor the president might legalize cannabis, Dana Rohrabacher gave a similar statement expecting laws to change some time next year.
Investor’s Business Daily’s Bill Peters reports what could happen on Election Day (Tuesday) if Democrats or Republicans take the House and Congress. Peters covers the SAFE and the STATES Acts, Mitch McConnell’s possible departure, states voting on cannabis measures, and how these measures will impact cannabis stocks.
CBD has been pushed as a cure-all, but the California Department of Public Health has declared CBD an illegal substance largely because the US Drug Enforcement Administration classifies CBD as a schedule 1 substance. The FDA has launched a crackdown on CBD products making unproven medical claims.
Recreational cannabis sales will begin in less than two weeks in Massachusetts according to state officials. Cannabis Control Commission Chairman Steve Hoffman announced dispensaries will begin sales in the next week or two after final inspections of the businesses are concluded.
Tampa based cannabis firm Florigrown insists that the Florida bill passed by legislators contradicts language approved by voters in 2016. The company argues that the state cap on medical marijuana business licenses and the state’s vertical integration requirement are both inconsistent with the will of the voters. After a ruling in favor of Florigrown, the state appealed the verdict. Take a look at how the interpretations of this bill could affect cannabis firms in Florida.
The Iowa Medical Cannabidiol Board voted unanimously against lifting the 3% THC limit on new medical marijuana products. The THC cap doesn’t prevent patients from purchasing more medication, but it does limit the amount of THC in each product.
While multiple measures go to ballot in Vista California proponents of Measure Z have invested over $575K to permit and regulate cannabis sales for up to 11 marijuana retailers. Two other measures are in competition with Measure Z which would allow for delivery of medical marijuana only. If all three measures pass it is likely the most popular vote will be the measure that moves forward.
Tuesday November 6th is Election Day 2018 with four cannabis initiatives hitting ballots for Michigan, North Dakota, Utah, and Missouri. Michigan and North Dakota will be voting on recreational adult cannabis use, while Utah and Missouri are voting on medical marijuana initiatives.
North Dakota could be one of the next states to legalize if voters pass Measure 3 on election day, but election polls are predicting wide ranging support from 26%-51% voting for recreational cannabis. The measure could help indigenous peoples reclaim their land through cannabis cultivation, however there are several complications clouding legalization for reservation lands.
Infusion Biosciences, a cannabis biotech company, announced that it has developed technology that recovers cannabinoids, terpenes, and other molecules in the cannabis plant in a water-soluble form. This technology opens the door to the cannabis beverage industry, and with a recent deal with Sproutly the company is ready to begin commercializing its products.