Pot Stocks, ETFs, Top News And Data From The Cannabis Industry This Week

The 2018 Farm Bill will be filed next week and includes a provision to legalize the cultivation of industrial hemp, which, among many other things, can be used to produce CBD. We’ll be keeping a close eye on developments in this realm.

In other political news, Utah’s legislature passed a compromise medical marijuana bill.

This week was dominated by news out of Cronos Group Inc. CRON, as speculation mounted around one of them being a potential partner for tobacco giant and Marlboro maker Altria Group Inc MO.

In addition, Cresco Labs started trading on the CSE under the ticker CL, while TILT Holdings debut under the TILT symbol.

In the words of Debra Borchardt, CEO of Green Market Report, “This week was definitely a tale of two cannabis companies… Cronos Group won that relationship in a multi-billion deal, while Aphria came under a short seller attack.”

Related Link: Marlboro Maker Altria Takes 45% Stake In Cronos Group

“We’ve known for a long time that tobacco would want to get into cannabis, but we figured they would wait until it was federally legal,” Borchardt added. “Apparently they got nervous that by waiting they were going to lose out. So this wasn’t a surprising announcement. For Aphria, time will tell whether the short seller was correct in his analysis or not.”

Last weekend, the cannabis industry lost one of its most beloved people, Brett Roper, CEO of Medicine Man Technologies Inc MDCL. Check out our tribute to this mentor, teacher, pioneer and activist: “How Medicine Man Tech's Brett Roper Changed The Cannabis Industry For The Better—And Why He Will Be Missed.”

Marijuana Indexes & ETFs

Over the week, the United States Marijuana Index, which tracks most of the largest marijuana stocks in the U.S., lost 8.4 percent, while the North American Marijuana Index, which also includes Canadian stocks, slipped 6.7 percent.

Over the last five trading days – including last Friday since markets were closed on Wednesday, the Horizons Marijuana Life Sciences Index ETF HMLSF HMMJ lost 5 percent, while the ETFMG Alternative Harvest ETF MJ shed roughly 1.4 percent of its value. The SPDR S&P 500 ETF Trust SPY closed the week down 4.3 percent.

Stock Moves

Here are some of the top marijuana stocks (market cap above $300 million) in U.S. exchanges and how the performed over the last five trading days:

• Acreage Holdings ACRZF: down 12.1 percent

• Aphria Inc APHA: down 32.8 percent

• Aurora Cannabis Inc ACB: up 1.1 percent

• CannTrust Holdings Inc CNTTF: down 5.6 percent

• Canopy Growth Corp CGC: down 6.7 percent

• Cronos Group Inc. CRON: up 40 percent

• Curaleaf Holdings Inc CURLF: down 11.55 percent

• Green Organic Dutchman Holdings Ltd TGODF: down 5 percent

• Green Thumb Industries Inc GTBIF: up 1.1 percent

• GW Pharmaceuticals PLC- ADR GWPH: up 0.9 percent

• Hexo Corp HYYDF: down 15.1 percent

• iAnthus Capital Holdings Inc ITHUF: down 5.75 percent

• Marimed Inc MRMD: down 5.4 percent

• MedMen Enterprises Inc. MMNFF: down 10.6 percent

• OrganiGram Holdings Inc OGRMF: down 14.9 percent

• Scotts Miracle-Gro Co SMG: down 8.6 percent

• Tilray Inc TLRY: down 2.3 percent

In Other News

Ahead of the International Cannabis Policy Conference at UN Headquarters, the World Health Organization's Expert Committee on Drug Dependence announced it would decline to provide recommendations or reschedule cannabis, requesting more time to complete a thorough critical review.

Lezli Engelking, founder of FOCUS (Foundation Of Cannabis Unified Standards), will be representing U.S. policy and speaking this Sunday on a panel. Benzinga reached out for commentary on the WHO’s decision.

"Disappointingly, the World Health Organization’s Expert Committee on Drug Dependence (ECDD) made history today in a totally different way than expected. In an unprecedented move, the ECDD declined to make the required recommendations on the rescheduling of cannabis during the United Nations Commission on Narcotic Drugs meeting today. WHO stated they require more time in order to perform a thorough critical review of cannabis in all forms,” she said. “Because this has never occurred before, it is unclear exactly what next steps will be.”

The U.S. Tax Court ruled on the applicability of 280E as it relates to cannabis operators. Steve DeAngelo’s Harborside was unsuccessful in its attempt to convince the Court cannabis businesses should be allowed to deduct ordinary and necessary expenses such as rent, phone bills and security.

Hightimes Holding Corp., the owner of High Times, converted $28.6 million of its outstanding debt obligations into equity (Class A common stock). Former shareholders of Trans High Corp., the company High Times acquired in February of last year, agreed to convert approximately $25.6 million of convertible 12 percent Hightimes notes into shares of common stock at $11.00 per share, the same per share price at which the company is offering its shares to the public, through a RegA+ raise. In addition, there were $3 million converted from High Times’ senior secured lender.

“This is an exciting time for High Times. This massive conversion greatly clarifies our balance sheet, and will be a major sign to investors of the good things to come as we continue our march toward the public markets,” Adam Levin, CEO of High Times, told Benzinga. “On a more personal note, it's rewarding to receive this type of approval from your shareholders, and doubles down on our belief that we're headed in the right direction.”

Sproutly Canada  SRUTF announced the hiring of Bryan Semkuley as President. Semkuley previously served as Vice President of Global Innovation/Industrial Sector at Kimberly Clark Corp KMB, after spending more than 25 years at Anheuser Busch Inbev NV BUD. Semkuley's hiring comes days after Sproutly announced the hiring of Melise Panetta as vice president of sales and marketing.

Cannabis biotech firm Manna Molecular hired Dr. Harin Padma-Nathan, often considered the world’s foremost clinician in sexual dysfunction FDA trials, as Chief Medical Officer. He will launch a novel cannabinoid-based sexual health and wellness line focused on performance and pleasure enhancement for men and women. Using micronized, multi-lamellar freeze-dried and self-forming liposomal technology, Manna SX offers a range of products, including lubricants, pills and tablets, and infused “bedroom-safe” consumer packaged goods and consumables.

Padma-Nathan brings more than 25 years of clinical and medical research experience to Manna Molecular, including overseeing clinical trials of the two biggest blockbuster FDA-approved sexual dysfunction drugs ever made: Pfizer Inc. PFE’s Viagra and Eli Lilly And Co LLY’s Cialis.

Padma-Nathan told Benzinga, “While there is a significant amount of data on THC with respect to sexual desire, we are looking at other Cannabinoids that may effect sexual arousal and orgasm, particularly in women. Among other studies, we are planning to study vaginal tissue in organ baths to look at responses to a wide range of Cannabinoids.”

Green Growth Brands GGB announced it had been awarded seven licenses by the Nevada Department of Taxation to operate dispensaries in the state. GGB currently operates one dispensary, The+Source, in Las Vegas and a grow and production facility in Post, NV. The award of the additional licenses supports GGB’s goal to have a significant presence in the state across multiple formats.

Young America Capital, a 55 person licensed investment bank and broker-dealer based in Mamaroneck, New York announced the successful sale of San Felasco Nurseries, Inc. for $65 million to Harvest Health & Recreation Inc HTHHF. San Felasco was the holder of an authorization to operate as a Medical Marijuana Treatment Center in the state of Florida. Each Medical Marijuana Treatment Center is allowed to operate up to 25 dispensaries in the State of Florida, subject to increase in certain circumstances.

“We are thrilled to have brokered the successful sale of San Felasco Nurseries to Harvest for $65 million,” said Peter Formanek, the head of Young America Capital. “Our team at Young America Capital looks forward to brokering additional cannabis licenses on behalf of our clients.”

Havest Health & Recreation, one of the largest multi-state operators in the U.S., fresh off of raising nearly $300 million and going public in Canada on the Canadian Securities Exchange (CSE), released it's third quarter 2018 financial report. 

The report shows Harvest is operating profitably. The adjusted EBITDA for the nine months ended September 30, 2018 was $7.6 million. Currently, Harvest is one of the only public cannabis companies operating profitably as investors are generally calling into question other companies' disparity in revenues and valuations.

MG Retailer came out with a list of “50 Best Companies to Work for in Cannabis.” Among selected businesses were Advanced Nutrients, Green Thumb Industries, Baker Technologies, BDS Analytics, Cresco Labs, Dixie Brands, Eaze, Harborside, Leafly, Medicine Man, New Frontier Data, Prohbtd, and Wana Brands.

“Our people are the absolute core of our business and we, at GTI, are infinitely better because of every single team member and their passion, hard work, and dedication. Our culture and people are top-of-mind as we continue to refine and enhance our programs, perks and benefits to ensure that our employees know that they are appreciated,” GTI’s VP of People, Eunice Kim told Benzinga.

British Columbia-based Salvation Botanicals announced that they have received the amendment to their Industrial hemp license to allow the sale and distribution of flowering heads, leaves, and branches. This means that for the first time, outdoor grown cannabinoids can be sold for ultimate use in the Canadian regulated cannabis market.

"Receiving this license creates an exciting opportunity for the hemp farmers that we have been working with over the past few years,” said Cliff Wiltshire, CEO, founder, and director of Salvation Botanicals Ltd. “The benefit to our partner farmers is clear - we can clean the flowering heads to remove a large portion of plant matter and produce a biomass that is in much demand for the Canadian market. Our post-harvest technology will be deployed in the coming weeks, and we will be working around the clock to help to relieve the current shortages being experienced across the country.”

Colorado-based cannabis venture capital and consulting firm Cliintel Capital Management Group (CCMG) worked with cannabis law firm Husch Blackwell to establish a unique funding model for the legal cannabis industry. CCMG is the first firm to receive a Qualified Institutional Investor (QII) designation, and is building a whole new type of investment opportunity for the cannabis sector. This structure allows investors to own equity in Colorado-licensed cannabis businesses while remaining passive unlicensed investors, limiting their direct exposure.

“Our approach provides much-needed liquidity for cannabis businesses that need capital to grow,” said Richard M. Batenburg Jr., CCMG’s veteran Fund Manager and a 35-year angel investor. “CCMG is well-positioned to identify promising companies that will benefit tremendously from our financial backing as well as the top-level business support services we offer our array of subsidiary companies and outside startups. We are experts in compliance, training, data-tracking, marketing and financing.” 

Find out more about these news and others on Origin House, Ascend Wellness and OG DNA with our friends at Marijuana Money, who make a weekly video summary of the top financial and business news in the cannabis industry.

More From Benzinga’s Cannabis Newsdesk

Over the week, Benzinga also reported on:

What Danny Moses, famous short-seller from “The Big Short,” thinks about cannabis stocks and private equity.

How President Trump’s nomination of William Barr as AG impacted the market.

How cannabis stocks moved up in sympathy to the Cronos-Altria deal.

Aurora’s deal to supply cannabis to Luxembourg.

Supreme Cannabis Company Inc SPRWF’s deal with and rapper Wiz Khalifa's Khalifa Kush Enterprises.

IGC Resources Inc. IGCGF and Westleaf Cannabis’ $14.9 million raise.

How Aphria’s sell-off burned other cannabis stocks, and how the company responded to short-seller allegations.

Canopy Growth’s acquisition of Storz & Bickel.

How cannabis sales figures out of Colorado, California and Massachusetts showed that recreational weed continues to disrupt medical markets.

"How Russia Prepared Renaissance Capital Co-Founder Boris Jordan For The Cannabis Industry”

Bank of America Merrill Lynch’s bullish view on GW Pharmaceuticals, and Cantor Fitzgerald’s price target cut on the company.

Alex Oleinic’s take on how tobacco companies can benefit from legal pot.

New Frontier Data’s thesis on how cannabis could potentially be displacing alcohol.

Interesting Data

Ever wondered what moguls have to say about smoking marijuana? Is there a connection between cannabis and creativity? Does weed work as a cognitive catalyst?

In this infographic, Marijuana Doctors shares a look at what Apple Inc. AAPL’s Steve Jobs, Carl Sagan, Richard Branson, Microsoft Corporation MSFT’s Bill Gates, and other wildly successful people said about pot.

Events Calendar

Dec. 10-12: Five years after the approval of the first comprehensive cannabis regulation law in the world, Monitor Cannabis Uruguay and the School of Social Science of Universidad de la República are convening an academic discussion on the various aspects that arise from the implementation and results of a law of this kind. The analysis of the Uruguayan case and the experience of other countries will allow us to draw lessons and learnings for the ongoing reform processes and their impacts on peoples’ welfare. With this congress, Monitor Cannabis Uruguay intends to improve the flow of evidence-based information on cannabis regulation policy, as well as to disseminate and facilitate scientific research linked to cannabis in Uruguay, the region and the world. The congress will be held at the School of Social Science of Universidad de la República (Montevideo, Uruguay).

Dec. 11: Matthew Karnes, CPA, founder of Greenwave Advisors LLC, will discuss the state of the cannabis industry during the New York State Society of CPAs’ (NYSSCPA) Cannabis Conference, in New York City. Attendees will learn about opportunities in the cannabis industry, such as how blockchain technology and cryptocurrency can help alleviate the regulatory issues that the legal cannabis industry is facing.

Dec. 12: Leafwire is hosting a Merry Cannabis Pitch Contest & Mixer in Denver, Colorado. The event will kickoff with an investor insights discussion on cannabis industry trends, followed by a cannabis pitch competition, and closed out with a happy hour.

Photo by Javier Hasse.