Stock Market
Cannabis Shorts Gain $157M After Tilson Conference
Bloomberg // 12.5.18
Despite the expense, shorts gained after the Whitney Tilson Conference in New York on Monday. According to Ihor Dusaniwsky, the director of financial analytics firm S3 Partners, as demand to short cannabis stocks grows, the cost to borrow and the frequency of recalled shares is rising. Cannabis stocks handed shorts a $157M mark-to-market gain on Tuesday, driven by losses in Canopy Growth Corp. (NYSE: CGC), Aurora Cannabis (NYSE: ACB), Tilray (NASDAQ: TLRY), and Aphria (NYSE: APHA).
Aphria Vows Rebuttal While Short Seller Grego Speaks Out Against the Company
CBC // BNN Bloomberg // 12.5.18
Aphria (NYSE: APHA) shares were falling in premarket trade Wednesday before a short rally. This episode of volatility comes from a report issued by Quintessential Capital Management’s Gabriel Grego warning shareholders about fraudulent and worthless assets the company acquired. SOL Global Investments Corp., the company who sold Aphria their questionable cannabis holdings, issued a statement defending Aphria’s acquisitions. Aphria has vowed to give a line-by-line rebuttal to Grego’s report.
Curaleaf Initiates Stock Buyback
Midas Letter // 12.5.18
Curaleaf Holdings Inc. (CNSX: CURA) (OTCMKTS: CURLF) issued a press release announcing its intention to commence a normal course issuer bid to purchase up to $50M of common stock. Over the past seven trading sessions Curaleaf has lost 36.72% of its value. All shares purchased by the company will be cancelled upon purchase, reducing the number of outstanding shares. Analysts question if other licensed producers will follow the company’s lead and initiate buybacks.
TILT to Begin Listing on CSE Today
Business Wire // 12.4.18
The first vertically integrated infrastructure and technology cannabis firm, TILT Holdings Inc. is planning nationwide growth across the US. The company announced that it will commence trading on the Canadian Securities Exchange today under the ticker symbol TILT.
Canadian Consolidation Targets
Small Cap Power // 12.5.18
With the share-price slump the surrounding the cannabis industry, rumors of consolidation are emerging. Stock-price weakness has turned Organigram Holdings Inc (TSXV: OGI), Aleafia Health Inc. (TSXV: ALEF), and Beleave Inc. (CSE: BE) into three potential takeover targets.
Cannabis Stocks Down Wednesday
Pot Stock News // 12.5.18
Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) fell 8% to $31.45 leading the stock sell-off Wednesday. Aphria (NYSE: APHA) (TSX: APHA) was down 15% and Aurora Cannabis (NYSE: ACB) (TSX: ACB) fell 9%.
MJardin Group Announces $6M Investment in DNA Genetics
New Cannabis Ventures // 12.4.18
Cannabis management firm MJardin Group Inc. (CSE: MJAR) announced the closing of a $6M minority investment in OG DNA Genetics Inc. as part of a $35M financing completed by DNA Genetics last week.
Global News
Former Mexican President Says Cannabis Industry Isn’t A Gold Rush
Business Insider // 12.5.18
Former Mexican President Vincente Fox warns cannabis industry investors against excessive optimism, telling investors that the market isn’t a gold rush. Fox went on to say that the nascent industry requires patience and must be forged over time. Fox now sits on the board of Canadian medical marijuana company Khiron Life Sciences (OTCMKTS: KHRNF).
Jay & Silent Bob Enter Cannabis Market
Nasdaq // 12.5.18
CFN Media Group announced the multiyear cannabis product development, licensing, and marketing agreement between Chemesis International Inc. (CSE: CSI) (OTC: CADMF) and the team of Kevin Smith and Jason Mewes, better known as Jay and Silent Bob. The initial brand is called Jay and Silent Bob’s Private Stash. Chemesis is a vertically integrated cannabis company with established brands in California and Puerto Rico, with plans to expand throughout the US and Latin America.
Australian Cannabis Producer Plans Frankfurt Listing
Nasdaq // 12.5.18
Australian cannabis producer Little Green Pharma intends to list on the Frankfurt stock market to raise money for its European expansion campaign. Goldman Sachs and Deutsche Bank are guiding the initial public offering as global coordinators. Rumors speculate the offering may take place in the second quarter of 2019. This move makes Little Green Pharma the first cannabis producer to list in Germany.
California’s Bigger, Flashier Cannabis Market set to Outpace Canadian Market
PR Newswire // 12.5.18
Chemistree Technology Inc. (CSE: CHM) Partnered with Sugarleaf with the intent to enter the recreational cannabis market in California, and is stating their need for a strong and successful branding recognition. The branding and advertising laws in California allow for colorful branding, hip packaging and a ginormous variety of available products, while in Canada the regulations are much stricter. With almost as many residents in the state of California as there are the in entire country of Canada, the projected success and longevity in the recreational cannabis market is in California.
Cannbit to Sell Medical Cannabis to Tikun Olam
Globes Israel // 12.5.18
Tikun Olam, the leading private cannabis company in the Israeli market, is facing a shortage of product following restrictions placed on one of their cultivation facilities. Cannbit (TASE: CPHO) announced that they will increase production in a new facility, license pending, for Tikun Olam. These changes are following a nationwide cannabis reform in April of this year.
US News
Medical Marijana Authority Collects $7.8M in Application Fees
Oklahoma News 4 // 12.4.18
In under three months, the Oklahoma Medical Marijuana Authority has collected nearly $8M in business and patient application fees. Initial startup costs for the support and implementation of the medical marijuana program are estimated at $7.8M to be reduced to $2M-$3M annually for operational costs.
Cannabis Tax Bonanza
Forbes // 12.5.18
States that have legalized and begun taxing cannabis are optimistic about the potential for marijuana taxes to pay for their schools, roads, and local governments. State after state, cannabis tax revenues exceed expectations. For example, the University of Illinois found that taxing and regulating cannabis would create 24,000 jobs and over $500M in revenue for the state. The reason for most of this revenue comes from tax code 280E preventing cannabis businesses from taking tax deductions. As a result of section 280E some cannabis firms are paying a 90% tax rate.
Legalization of Hemp Could be First Step to Marijuana Reform
US News // 12.4.18
The 2018 Farm Bill includes language that will allow farmers to grow industrial hemp. Hopeful marijuana advocates believe the acceptance of industrial hemp may reduce the stigma around marijuana. With Democratic control over the House, and the departure of Rep. Pete Sessions (R-Texas), cannabis legalization proponents are optimistic that Congress will move on reform.
Lawsuit to be Filed Against Medical Cannabis Compromise Bill
KUTV // 12.4.18
Attorney Rocky Anderson announced he is working on a lawsuit against Utah’s medical cannabis compromise bill that Governor Gary Herbert signed into law Tuesday night. Anderson aims to reverse the compromise bill and reinstate Prop. 2.
Denver Vacating Low-Level Marijuana Convictions
ABC // 12.4.18
Tuesday Denver Mayor Michael B. Hancock announced a citywide effort to promote inclusion for people and communities disproportionately impacted by the war on drugs. Hancock’s policy will vacate low-level marijuana convictions that occurred before legalization. More than 10,000 people were convicted of misdemeanor marijuana infractions between 2010 to 2013 that are now eligible for expungement.
Cannabis Law Group Files Lawsuit to Overturn Pot Convictions
WXYZ Detroit // 12.5.18
Wednesday the Cannabis Law Group filed a federal lawsuit against the Wayne County Sheriff’s Department to overturn marijuana convictions. The lawsuit was filed on behalf of Detroit resident Chrystal Sisson who was ticketed and arrested for a $10 worth of weed. The Wayne County Sheriff’s Office then seized Sisson’s vehicle under forfeiture. Sisson was forced to pay $1,200 to get her car back. Cannabis Legal Group argues that Sisson’s rights were violated.
State-by-State Cannabis Sales Show that Recreational Weeds Disruption of Medical Pot Continues
Benzinga // 12.5.18
A brief analysis of the statistic trends in Colorado, California and Massachusetts, comparing medical pot sales to recreational cannabis over the past year.
Cannabis Company Faces Big Tax Bill After Losing Court Battle
Real Money // 12.5.18
After a two-and-a-half-year court battle, Harborside, a California based dispensary company, was told that there would be no end to the tax code regulating the cannabis industry’s profits. Section 280E, which prevents marijuana companies from deducting business expenses from their total income, is one of the biggest obstacles facing cannabis entrepreneurs. Harborside plans to appeal this decision and take further action to come to an agreement with the courts.
Employers Forecast Challenges in Age of Recreational Cannabis
Press of Atlantic City // 12.5.18
The New Jersey Cannabis Regulatory and Expungement Aid Modernization Act is being discussed by voters in the state. The bill would allow companies and government to view marijuana and marijuana intoxication like that of alcohol. The bill could be considered as early as next week.
Massachusetts Breaks Cannabis Sales Record
Wikileaf // 12.4.18
With over 2.2M of sales in the first week, Massachusetts has set the record for most sales following recreational cannabis legalization. In 2019 as more shops open their doors, the sales in the state are expected to skyrocket.
Cannabis in the Next Congress: Will Republicans Try to Steal the Spotlight?
Forbes // 12.4.18
Some speculate the increased outcome of younger voters is one of the driving factors ruling in favor of pro-cannabis legislations. Democrats fear that a failure to end the national prohibition before the end of Trump’s presidency will lead to the success of the Republican party. It is speculated that Trump will switch sides and back legalization when the time comes in 2020, in order to boost his popularity amongst young voters.
Barickman: Marijuana Will be Legal in Illinois in 2020, but Questions Remain
Pantagraph // 12.5.18
Illinois Republican Senator is working to create strong legislature surrounding the legalization of cannabis in the state. His support is based on the potential tax revenue following legalization, and the dollars saved by not attempting to prohibit marijuana use. He works to create a strong, detailed law that will abolish the black market in Illinois.
California News
Webinar: Ethically Navigating Local & State Licensing
Canna Law Blog // 12.4.18
Canna Law Blog is hosting a webinar on December 7 at 12pm PST entitled Ethically Navigating Local and State Licensing for Cannabis Businesses. The webinar will discuss the potential pitfalls of legally representing cannabis businesses and provides tips on how to navigate the ever-changing local and state licensing landscape.
Marijuana Trade Group Demands Action Against Unlicensed Los Angeles Dispensaries
Marijuana Moment // 12.5.18
The United Cannabis Business Association (UCBA) sent a letter to the city attorney asking for more information about their plan to shut down unlicensed dispensaries in the city of Los Angeles. The UCBA represents licensed cannabis companies in the city and are concerned that the lack of enforcement will lead to the downfall of legal cannabis operations.
Suspected Extraction Lab Explosion in Santa Rosa
San Francisco Chronical // 12.4.18
According to Sonoma County authorities, an explosion at a Santa Rosa home was suspected of being an illegal marijuana extraction lab. When authorities arrived at the scene, they found the home’s resident wet, disheveled, and confused from the blast.
Grown Rouge Expanding to California
Guru Focus // 12.5.18
In the first of several stages for a multi-state plan, Grown Rouge International Inc. (CSE: GRIN) has secured a 16K square-foot facility in the heart of California’s Humboldt county. In anticipation of receiving approval for a full distribution license from the state, Grown Rouge has established GRD Cali LLC and has received licensing approval from the City of Eureka. GRD Cali will provide distribution services to support local licensed cannabis farmers and processors.
How MedMen is Making Marijuana Mainstream
Green Entrepreneur // 12.5.18
An interview with the CEO of MedMen, the largest cannabis business in the US, is working to destigmatize and bring marijuana use and culture to the mainstream. He says the key to success is treating cannabis as you would any other product and to analyze the consumer data and change your business strategy accordingly.
Science
The Environmental Impact of Marijuana Legalization
The Guardian // 12.4.18
Scientists fear that the rapid legalization of marijuana will cause a blind eye to be turned to the environmental impacts of large-scale cultivation. Many pesticides are legal for use in production, and there is little to no regulation about disposal of contaminated water, meaning that is infiltrating the clean water supply for North America. Scientists are urging legislature to consider the impact that the marijuana industry has on water quality and the long-term effects of releasing pesticides into the volatile ecosystem.
Co-authored by Madeline Berkman