The Morning Blunt
Volume 3| Issue 8
November 8, 2018
“ Success is the result of preparation, hard work, and learning from failure.“
Market Watch’s Tomi Kilgore reports that the cannabis stocks are surging after Attorney General Jeff Sessions resigned at the request of President Trump. To add icing to the cake, midterm results showed democrats took the House, opening up more opportunity in the sector. Take a closer look to see how stocks closed out on Wednesday.
Motley Fool’s Dan Caplinger looks at a recent transaction for cannabis stocks from mutual fund and ETF giant Vanguard Group. According to the company’s June 13F filing with the SEC, Vanguard revealed the company owns 4.1M shares of Canopy Growth. And the most recent holdings of Developed Markets Index Fund indicate Vanguard holds 4.28M shares of Aurora Cannabis and 1.14M shares of Aphria. See why normally conservative Vanguard is holding pot stocks.
Seeking Alpha’s Johnathan Cooper completed a cannabis sale analysis from a two-week period in Ontario’s only legal marijuana outlet, the Ontario Cannabis Store. According to Cooper’s analysis Redecan and Aurora Cannabis sold the most with a combined total of 50% of total sales. Despite their size, Emblem, Vivo, and Flowr all sold more than Canopy Growth.
MediPharm Labs Corp. announced that the company has reached a significant milestone by completing the purification and production of 150 kilos of cannabis extract. The company is ahead of its target production goals by employing critical CO2 extraction and secondary purification process.
ICC International Cannabis Corp. announced it has received an inaugural purchase order for 10,000mL of THC oil, 5 kilos of dried flower, and 5,000mL of CBD oil for European distribution.
Small Cap Power has identified three cannabis stocks with low EV/sales ratios offering investors a potential cannabis value play. In an industry plagued with high valuations, Emblem Corp, Sunniva Inc., and Planet 13 Holdings Inc. are trading at a low enterprise value to sales ratios, making the three stocks a good place for investors to begin.
Hedgeye analysts Shayne Laidlaw and Howard Penney announced that today they are launching their cannabis industry Black Book. In addition to five other cannabis firms, Laidlaw and Penney explore the sector’s top short Canopy Growth and the new top long Cronos.
EVIO announced that EVIO Canada’s Keystone Labs in Edmonton is ready to serve the legal Canadian cannabis industry. Aiming to improve testing volumes, enhance operational capacity, and revenue growth, Keystone Labs has been investing in lab expansions and equipment upgrades. In May EVIO Canada acquired a 50% stake in Keystone Labs.
Thailand’s Public Health Ministry will ask the cabinet on Tuesday to approve a bill drafted by the National Legislative Assembly that would legalize medical marijuana. Authorities are demanding that preventative measures are taken in the bill to prevent possible cannabis abuse in the wake of its enactment.
Thousands of patients are in limbo after the Health Ministry has issued a temporary stop work order on Israel’s largest cannabis firm Tikun Olam, due to concerns over the company’s drying methods not being up to code.
According to the Mexican Congress website, Mexico’s future interior minister, Senator Olga Sanchez, will submit a bill week intended to create a medical cannabis industry and legalize recreational use of marijuana. The incoming government hopes to shake things up for the country’s drug war by legalizing the drug and allowing businesses to grow and commercialize cannabis.
The New Jersey state Department of Health is currently reviewing 146 applications for six medical marijuana facility licenses. Separating the state into the north, central, and southern regions, each region will be given two cannabis licenses. With municipalities open to cannabis production, south New Jersey has become prime real estate for cannabis firms looking to settle in the state. Florida based Liberty Health Sciences applied for licenses in all three areas of the state.
San Diego based Mtrac, a new payment system company, offers cannabis businesses a banking solution. The company uses blockchain technology to transfer keys that digitally represent real world currency from customer to merchant. Mtrac offers in-store iPad and pin pad checkouts for customer convenience. Merchants can also write digital checks for things like rent and payroll. The system also tracks audit and revenue reports.
Wednesday cannabis investor Paul Rosen told CNBC that there is momentum to mend state and federal policy on cannabis. According to Rosen there is a desire among citizens and at the state level for sensible reform. Rosen notes that Michigan’s choice to legalize recreational cannabis adds to that momentum which will fuel harmonization between state and federal law.
In Massachusetts Wednesday two labs, CDX Analytics in Salem and MCR Labs in Farmington, were given notice to commence full operations by the Cannabis Control Commission. Now that labs can test cannabis products, the state is only a few days away from its first legal marijuana sales.
Two political science professors of CSU Bakersfield, Dirk Horn and Dr. Mark Martinez discuss why Tuesday’s election was a historical moment for Kern County California. With four marijuana measures on the ballot, voters were also selecting a new County Supervisor as the county was forced to redraw its district.
Louisville Kentucky has proposed a series of code adjustments that could eliminate the cap on the number of marijuana retailers allowed in the city. The code adjustments would also slash the distance cannabis businesses can be from K-12 schools from 1,320 feet to 500 feet. The goal for Louisville is to regulate cannabis businesses similarly to liquor stores.
The Bureau of Cannabis Control has announced the approval and issuance of annual licenses for 12 commercial cannabis businesses in California. The businesses are required to pay their licensing fees before annual licenses will be issued as active. Licenses issued by the BCC are effective for 12 months.
Fresno California appears to have voted in favor of Measure A, a cannabis tax measure that officials estimate will bring in over $10M annually to the city. The city plans to use the funds for police, roads, and other community services.
Redding California voters have passed Measure C which will allow the city to impose taxes on cannabis firms. Redding will be the second city in Shasta County to tax all establishments that sell medical or recreational cannabis.
Michigan voters approved a ballot initiative on Tuesday to legalize, regulate, and tax recreational adult-use cannabis. CNN called the election after 54% of precincts had reported the proposal was leading 58% to 42%.
Missouri voters approved Amendment 2, a medical cannabis initiative that passed by a margin of 66% to 34% on Tuesday. The measure allows qualified patients to seek a medical identification card from their physicians which will allow patients and caregivers to grow up to 6 marijuana plants and purchase up to 4 ounces of cannabis monthly from dispensaries.
The Bureau of Cannabis Control that is seeking proposals to develop a two-year statewide public awareness and education campaign relating to the licensed commercial cannabis businesses in California. The campaign will focus on the benefits of licensing and help businesses establish effective branding, media planning, strategy development, and a communications plan.
The Canadian black market has been exploiting the cannabis shortage and delivery delays by offering a more convenient and cost-effective solution for consumers. Black market ecommerce websites have been cropping up offering deliveries, edibles, topicals, and concentrates. Some stores are offering cannabis as low as $3 per gram.
Wednesday Canada Post publicly admitted to a privacy breach involving over 4,500 online Ontario cannabis consumers. The Ontario Cannabis Store believes the breach occurred when an individual used the Canada Post tracking tool to access customer delivery data.
Trait Biosciences Inc., a biotechnology pioneer in the cannabis industry has attracted some of the world’s most renowned scientists to the company’s team. Dr. Oliver Kayser, a leading biochemical engineer, along with four other scientific specialists, joined Trait’s Chief Scientific Officer Dr. Richard Sayre to create pure, safe, and high-quality cannabis products.
PathogenDx has developed a DNA-based microarray assay which can identify potentially life-threatening microorganisms in less than six hours, faster than plate-based enumeration methods. The technology can allow labs to screen more samples, more effectively to better protect consumers with weakened immune systems.
The Verge’s Angela Chen discusses how prohibition laws prevented cannabis research for decades leading to the health hype companies are trying to cash in on. Though there have been studies conducted that have shown patient improvements, medical cannabis research is still years behind the medical field.