The North American Marijuana Index recovered Wednesday as cannabis stocks soared after Federal Reserve Chairman Jerome Powell called interest rates just below neutral for the economy. Powell told a group at the Economic Club in New York that its important to distinguish between volatility and events that threaten financial stability. Take a look at who flew and who fell on Wednesday.
Currently holding 49 cannabis stocks including producers and ancillary businesses, Horizons Marijuana Life Sciences Index ETF (NASDAQOTH: HMLSF) has lost more than a third of its value in less than six weeks. Horizons seems to have added many of their listings after those companies’ run-ups had plateaued. Further the industry won’t be returning profits nearly as soon as some expected, which bodes poorly for Horizons Marijuana Life Sciences.
Origin House Corp. (CSE: OH) (OTCQX: ORHOF) announced sequential revenue of $6.6M at a growth of 89% in the company’s financial results for the three- and nine-month periods that ended on September 30, 2018.
CEO Tim McGraw of Canna-Hub, a privately-owned real estate and property development company focused on the cannabis industry, told Proactive Investors the company is making headway on their two cannabis parks under development. According to McGraw Canna-Hub will be expanding to Canada, Nevada, Colorado, and Washington.
Forward enterprise value to revenue is a useful metric to evaluate a stock’s value for early stage companies that have yet to achieve a positive cash flow. In the Canadian cannabis sector the average forward EV/Revenue multiple is 44.6x. These five companies, Harvest One Cannabis Inc. (TSXV: HVT), HEXO Corp (TSX: HEXO), WeedMD Inc (TSXV: WMD), Sunniva Inc. (CSE: SNN), and Supreme Cannabis Company (TSXV: FIRE) (OTC: SPRWF) are all trading below 10.0x forward revenues, well below their peers.
The Supreme Cannabis Company (TSXV: FIRE) (OTC: SPRWF) recently reported its third quarter 2018 updating reflecting sales growth of 229% year-over-year from $1.56M to $5.14M. In an expansion effort, Supreme Cannabis has also reached an agreement to acquire communications firm Bayfield strategy Inc.
Tuesday Columbian integrated medical cannabis firm Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQB: KHRNF) announced that it has received approval to commercialize and market four products in the company’s Kuida CBD cosmeceutical product line in Peru.
Leading developer of smart cannabis devices, Resolve Digital Health, has entered into a strategic partnership with Jamaican Medical Cannabis Corporation Ltd., a Canadian-Jamaican cannabis exporter. The agreement states JMCC will supply cannabis, processing, packaging, and distribution of Resolve’s smart inhaler pods in its markets outside of North America.
New Zealand’s Medicinal Cannabis Bill has passed its second reading, granting government amnesty to illicit cannabis growers by offering them the opportunity to enter the medicinal cannabis industry. This legislative change will help provide stable incomes for families on the East Coast.
With the sponsorship from 82 Democrats and 13 Republicans, Rep. Ed Perlmutter is drafting new legislation that would align federal and state marijuana laws for banking and credit institutions. The bill is expected to gain traction with the “blue wave” that took back the house, ousted Pete Sessions and replaced Jeb Hensarling (R-TX) with Rep. Maxine Waters (D-CA) as chairman of the House Financial Services Committee. To sweeten the pot, Attorney General Jeff Sessions also resigned.
In the first five days of legal pot sales in Massachusetts, the only two dispensaries in the state generated over $2.2M in sales, according to the Cannabis Control Commission. In that time New England Treatment Access in Northampton and Cultivate of Leicester sold 56,380 separate cannabis products.
Wednesday Kyber Data Science LLC, a wholly-owned subsidiary of Cowen Inc. (NASDAQ: COWN), announced an agreement with Seattle based Headset. Headset is a retail analytics firm focused on cannabis-related businesses. According to the agreement Kyber will sell and distribute Headset’s cannabis POS data to the financial services industry.
The long wait is nearing its end. Michigan will begin selling recreational cannabis on December 6, 2018. But even though the law hasn’t gone into effect, prosecutors have begun dismissing low-level cannabis criminal charges.
Under an agreement reached on Tuesday, Michigan medical cannabis dispensaries will be permitted to remain open until at least December 31st. The state has been trying to shut down dispensaries since September however a combination of court rulings and a desire to make sure enough dispensaries were available to serve Michigan’s 300K medical patients kept them open.
Next month, in the heart of the Jewelry District of Los Angeles, cannabis tenants are lined up to fill the Green Street Building in what will be the largest real estate space dedicated to the cannabis industry in the US. One hope is by bringing a critical mass of businesses to the area, the sudden influx of people and capital could stimulate a resurgence in the area.
After the acquisition of Chaintrack Technologies, Trackloop Analytics Corp. (CNSX: TOOL) announced the company intends on entering California’s $5.1B legal cannabis market. Trackloop intends to partner with Metrc by offering a monitoring system that provides real time data on production, transport, and retail.
Tuesday Sunniva Inc. (OTCMKTS: SNNVF) announced the acquisition of 100% of LYTR Logistics LLC, a California based cannabis distribution company headquartered in San Diego. LYTR will play a crucial role in Sunniva’s position in California as a vertically integrated company.
Chemistree Technologies Inc. (CSE: CHM) (USOTCQB: CHMJF) announced that the company has entered into a strategic partnership with an Arcata based cannabis processing company. Under the agreement Chemistree will loan the processor $450K and will negotiate an additional line of credit for working capital purposes.
Vincent Ning the CEO of Nabis, a cannabis distributor that delivers to approximately 90% of California’s retail dispensaries, discusses his company’s background. Ning also discusses the company’s next round of fundraising, their tech-based business model, and expectations for growth.
Tuesday MJIC Inc., a provider of licensed wholesale cannabis distribution, retail, compliance, and supply chain solutions, announced it has been granted municipal licenses from the City of Oakland and temporary licenses by the State of California Bureau of Cannabis Control. The company has commenced operations at its distribution and delivery facility in Oakland.
Winnipeg’s Mayor Brian Bowman announced that the burden is on the taxpayers for the costs associated with Canada’s cannabis legalization. Currently Manitoba Premier Brian Pallister refuses to release the funds from the cannabis excise tax, arguing that the funds would be better spent on provincial debt.
Cannabis industry professionals, keen to play by the rules, are making the transition from grey and black markets into the legal cannabis sector. As the Canadian government cracks down on the black market, more cannabis industry leaders from the prohibition era are deciding to play by the rules in order to stay relevant in the cannabis industry.
Despite Canada’s legalization to grow cannabis, Kaleigh Miller, a spokesperson for the Alberta Gamining, Liquor, and Cannabis Commission announced there is no place in the country for consumers to legally buy seeds. Frustrated cannabis consumers have resorted to trading and gifting seeds and plants on a website called Home Grown Connect.
The chairman of the Canadian Association of Mold Makers, Johnathon Azzopardi, wants to institute a zero-tolerance policy for cannabis use in Canada’s manufacturing trade. For now, the Canadian Centre for Occupational Health and Safety has released a set of guidelines for dealing with cannabis in the workplace.
Redfund Backed Biolog Partners with Cannabis Strategic Ventures to Develop Water Soluble Cannabis Technologies
Biolog Inc., backed by Redfund Capital Corp. (CSE: LOAN) (OTC: PNNRF), and Cannabis Strategic Ventures Inc. (OTC: NUGS) announced a partnership to develop water soluble cannabis technologies for the food and beverage and consumer industries.