There were numerous political announcements shaping the industry last week, with a Michigan state board ruling that more than 60 medical cannabis dispensaries that had to close at the end of last year due to new regulations will be allowed to re-open until March 31, providing them time to become compliant; and Florida Governor Ron DeSantis pledging to end the ban on medical marijuana flowers in the state.
“We saw a lot of movement at the state level this week. Ohio began its first medical marijuana sales with five dispensaries... For such a conservative state, this is a big deal,” Debra Borchard, CEO of Green Market Report, told Benzinga. “Then New York, which has one of the most restrictive medical marijuana programs, heard the governor say he wanted to legalize adult use cannabis within 100 days. That doesn't mean dispensaries will be selling product anytime soon, but this is a big switch from someone who once said that marijuana was a gateway drug.”
On the markets front, talk was dominated by Benzinga's 2019 Cannabis Capital Conference, getting investors and companies from around the world together for one of the most interesting industry gatherings of the year. Here are a few stories on the event worth checking out:
Marijuana Indexes & ETFs
Over the last five trading days, the United States Marijuana Index, which tracks most of the largest marijuana stocks in the U.S., inched down by 1.85 percent, while the North American Marijuana Index, which also includes Canadian stocks, declined by around 2.63 percent.
Over the same period, the Horizons Marijuana Life Sciences Index ETF HMLSF HMMJ lost 0.81 percent, while the ETFMG Alternative Harvest ETF MJ appreciated by 0.78 percent. The SPDR S&P 500 ETF Trust SPY closed the period up by 2.89 percent.
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 ACRGF: up 5.55 percent
• Aphria Inc APHA: down 4.30 percent
• Aurora Cannabis Inc ACB: down 2.58 percent
• CannTrust Holdings Inc CNTTF: up 1.71 percent
• Canopy Growth Corp CGC: up 13.93 percent
• Cronos Group Inc. CRON: up 9.16 percent
• Curaleaf Holdings Inc CURLF: down 7.23 percent
• Green Organic Dutchman Holdings Ltd TGODF: down 7.88 percent
• Green Thumb Industries Inc GTBIF: down 6.27 percent
• GW Pharmaceuticals PLC- ADR GWPH: up 10.56 percent
• Hexo Corp HYYDF: up 8.98 percent
• iAnthus Capital Holdings Inc ITHUF: up 4.68 percent
• Marimed Inc MRMD: up 9.39 percent
• MedMen Enterprises Inc. MMNFF: down 7.42 percent
• OrganiGram Holdings Inc OGRMF: down 3.44 percent
• Scotts Miracle-Gro Co SMG: up 2.71 percent
• Tilray Inc TLRY: down 19.4 percent
In Other News
Canada-based Aurora Cannabis announced plans to acquire privately-held, certified organic cannabis producer Whistler Medical Marijuana Corporation in a deal valued at $175 million.
Canopy Growth received a license from the state of New York to process and produce hemp, announcing plans to invest between $100 million and $150 million in developing this grow.
Tilray signed a global revenue sharing agreement with Authentic Brands Group for the development and marketing of cannabis.
Canadian cannabinoid-focused company Avicanna announced it has filed a preliminary prospectus to go public on the Canadian Securities Exchange.
MariMed announced the formation of MariMed Hemp, a wholly-owned subsidiary that will be focused on hemp-derived CBD products. MariMed Hemp will be separate from MariMed’s core cannabis business.
"The hemp CBD industry will be as big as or bigger than the legal cannabis industry,” said Robert Fireman, CEO of MariMed. “We began implementing our hemp strategy a year ago in anticipation of federal legalization. With its similarities to the cannabis industry, it is a natural extension of MariMed’s business.”
“Due to strict regulatory requirements about what can be processed and sold within licensed cannabis facilities, we created MariMed Hemp as a separate subsidiary. Our shareholders will benefit from both. Investors at our recent presentation at the Benzinga Cannabis Investment conference are clearly enthusiastic about the hemp opportunity,” Fireman said.
Cannabis information resource, Leafly, and Flowhub, a provider of compliance services and point of sale solutions for the cannabis industry, launched a partnership to provide real-time dispensary inventory and pricing for every strain and product.
U.S. Attorney General nominee William Barr was on the Hill for the Senate confirmation hearings. Barr said he would respect state cannabis laws and legal businesses in relation to federal marijuana statutes. He added he will not pursue legal action against companies that rely on the Cole memorandum (directs federal prosecutors to not use resources to target businesses or individuals in compliance with state cannabis laws), even though it was rescinded by his predecessor Jeff Sessions last year.
Camp Green Organics, a California-based producer of cannabis and CBD products, announced a partnership with NBA veteran Keyon Dooling. Dooling and Camp Green Organic will create a new company, Krafted Organics, which will be focused on a CBD product line that will include topicals, capsules and balms.
“While healing my mind and body from my inner personal challenges that I had to face, I discovered certain oils and scents such as lavender that worked really well for me in regard to wellness when combined with CBD. CBD actually plays a big part in my everyday wellness regimen - so much so, that I decided to take things further and share my knowledge and wellness success with the world,” Dooling said in a statement.
GB Sciences Inc. GBLX announced the harvest of the first test cannabis crop in its collaboration with Louisiana State University Agricultural Center. The Louisiana Department of Agriculture and Forestry is expected to complete testing extract samples collected in November by mid-February. After the extract passes two tiers of tests, the products will be made available to patients in Louisiana.
California cannabis company NUG added three new people to its team following a successful 2018 that was marked by the company beating the revenue projections and raising its forecasts for 2019.
Colorado reported its December marijuana sales tax collections.
“Full-year implied revenues are flat at $1.5 billion over the year, in line with our expectations (to slightly down), which establishes an industry benchmark of 5 years to maturity (January 2014 – December 2018),” Greenwave Advisors’ Matt Karnes told Benzinga. The trajectory of growth in any one state may not be congruent with other markets as the velocity of falling wholesale prices is not consistent.
“We note that Colorado is likely an outlier because it benefited from “canna” tourism in the market's early years (the only state to allow cannabis consumption for recreational use). As we continue to evaluate the fundamentals of other fully legal states we expect a shorter time horizon to maturity.”
Average patient spend per month declined to $305 in 2018 from $395 the previous year, which is likely due to falling flower prices. For 2018, medical marijuana was down 20 percent to $327 million, largely attributed to a decline in cardholder counts which decreased by 7 percent to approximately 87,000 in 2018.
“Though recreational use increased by 13 percent to $1.2 million last year, we note a deceleration in its growth trajectory (it increased by 20 percent in 2017),” Karnes said. “These results validate our industry thesis published in our inaugural GreenWave Report (2014) that a recreational use market will disrupt medical marijuana sales.”
Given that similar results can be observed in other states with both medical and recreational use, Greenwave anticipates Colorado will also include both markets under the same regulatory authority.
More From Benzinga’s Cannabis Newsdesk
New Frontier Data’s take on the ramifications of the Patients Mutual Assistance Collective Corp. (d.b.a. Harborside Health Center) v. Commissioner, 151 T.C. 11 (2018) case.
Jeff Siegel’s interview with former Mexican President Vicente Fox.
GMP lifting its price target on Canopy after the hemp license was granted.
New Age Beverages Corp NBEV entering into a partnership to develop and distribute Bob Marley-branded cannabis-infused beverages.
Aurora’s stock taking a dive after the company announced plans for a $250 million debt offering.
The strong performance of the ETFMG Alternative Harvest ETF year-to-date.
CIBC initiating coverage on cannabis stocks.
Wayland Group MRRCF selling half of its international assets to ICC International Cannabis Corp KNHBF for approximately $258 million.
February 19: Accelerate Cannabis is an educational and networking event for anyone interested in cannabis, to learn about the New Jersey market and meet their peers from around the country. Hear from data scientists, application consultants, local government experts, ancillary business owners, and cannabis brand leaders as they discuss how New Jersey is prepared for adult-use legislation and the expansion of the medical program.
February 27 – March 1: The 5th Annual Emerald Conference will be held at Loews Coronado Bay Resort in San Diego, California. The conference brings together top scientists, extraction and cultivation professionals, and visionary business leaders in a collaborative environment that fosters groundbreaking advancements.
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