The Week In Cannabis: SAFE Banking Act, Stocks In Red, IPOs, High Tech Agro Projects And Celebs In Marijuana
It was a big week for cannabis banking, as the SAFE Banking Act, which would provide protection to financial institutions that work with legal, compliant cannabis businesses, was scheduled for its first markup in the House Financial Services Committee Tuesday, March 26. This marks the first time a bill related to cannabis banking is receiving a markup in a congressional committee. You can catch the markup live at 2 p.m. ET at https://financialservices.house.gov/live/.
The bill was introduced by Representatives Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH) and has 138 co-sponsors in the House.
“Allowing banks to work with the cannabis industry is vital for public safety, transparency and increasing access to capital for small businesses and marginalized communities,” said Morgan Fox, spokesman for the National Cannabis Industry Association, which is lobbying heavily for the bill. "We are confident the SAFE Banking Act will pass through this markup and continue to gain momentum in Congress.”
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In capital markets, marijuana stocks had a tough Friday, as did the broader market.
“While cannabis stocks joined the broader market sell-off on Friday, the group has generally moved higher for the year,” Green Market Report CEO Debra Borchardt told Benzinga. “Tilray continues to have a $6-billion market cap even though the quarter’s revenues were just $15 million. Having said that, it did beat the average estimate for revenues from analysts. Still, it continues to be a pretty frothy valuation and the stock began trending downwards as the market began to fully digest the earnings announcement.”
Marijuana Stocks & ETFs
Over the last five trading days, the Horizons Marijuana Life Sciences Index ETF (OTC:HMLSF) (TSE:HMMJ) lost 1.8 percent, while the ETFMG Alternative Harvest ETF (NYSE:MJ) tumbled roughly 1.4 percent. The SPDR S&P 500 ETF Trust (NYSE:SPY) closed the period down 0.73 percent.
Top marijuana stocks with market caps above $400 million that trade on U.S. exchanges performed as follows over the last five trading days:
• Acreage Holdings (OTC:ACRZF): up 15.8 percent
• Aphria Inc (NYSE:APHA): down 0.7 percent
• Aurora Cannabis Inc (NYSE:ACB): down 6.4 percent
• CannTrust Holdings Inc (NYSE:CTST): up 8.4 percent
• Canopy Growth Corp (NYSE:CGC): down 3.3 percent
• Cronos Group Inc. (NASDAQ:CRON): down 8.4 percent
• Curaleaf Holdings Inc (OTC:CURLF): up 50.7 percent
• Green Growth Brands Inc (OTC:GGBXF): down 1.7 percent
• Green Organic Dutchman Holdings Ltd (OTC:TGODF): up 4.7 percent
• Green Thumb Industries Inc (OTC:GTBIF): up 15.2 percent
• GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH): down 0.3 percent
• Hexo Corp (NYSE:HEXO): up 4.3 percent
• Harvest Health & Recreation Inc (OTC:HRVSF): up 18.8 percent
• iAnthus Capital Holdings Inc (OTC:ITHUF): up 9 percent
• Marimed Inc (OTC:MRMD): down 6.6 percent
• MedMen Enterprises Inc. (OTC:MMNFF): up 11.2 percent
• OrganiGram Holdings Inc (OTC:OGRMF): up 1.6 percent
• Scotts Miracle-Gro Co (NYSE:SMG): down 5.7 percent
• Tilray Inc (NASDAQ:TLRY): down 7.4 percent
In Other News
Item 9 Labs Corp. (OTC:INLB) announced it’s close to completing its 10,000-square-foot expansion project, which will more than double output capacity at its cultivation and processing facility in Arizona.
“Our cultivation manufacturing space will now total 20,000 square feet, giving us the opportunity to grow our staff and product suites,” said Item 9 Labs CEO Sara Gullickson. “This expansion is the second phase of a three-tiered plan that began in 2018.”
FLOWER CO., a California-based cannabis company, is now backed by Y Combinator, joining the ranks of successful startups like Airbnb, Dropbox Inc (NASDAQ:DBX) and DoorDash. FLOWER CO. launched at Y Combinator’s prestigious Winter 2019 Demo Day, introducing its Costco-based membership model for cannabis, which gives members access to savings of up to 50 percent versus traditional dispensaries. FLOWER CO. looks to bridge the gap after legalization and compete with the pricing of illegal marijuana, providing safe and fair access to all consumers.
Viceland’s show “BONG APPÉTIT: COOK OFF" will debut a new season on Tuesday, April 2. The show, a cooking competition featuring cannabis-infused plates, is hosted by B Real of Cypress Hill; Vanessa Lavorato, cannabis confectioner and founder of Marigold Sweets; and celebrated chef and restaurateur Miguel Trinidad.
“Each episode follows three contestants as they face off in a series of cannabis cooking challenges, leaving one crowned the winner,” according to the producers.
Mike Tyson has teamed-up with Planet 13 on an exclusive sales agreement for Tyson Ranch products in Nevada. Mike Tyson will be at Planet 13 April 13 to celebrate and meet fans at Planet 13 Las Vegas, the world’s largest cannabis dispensary superstore.
“The Planet 13 Cannabis Entertainment Complex offers customers an ultra-premium cannabis experience that dovetails perfectly with Tyson Ranch’s belief that not all cannabis is created equally,” Tyson said in a statement.
Cansortium Holdings Inc, a U.S.-based multistate operator and international player, started trading on the CSE under the ticker TIUM.U.
Sheldon Owen, founder of the first marketing intelligence platform for cannabis, Muncheez, was recognized with The Golden Jay Award.
FLOURISH, a global cannabis recruiting company, presents this monthly recognition to highlight workers who are pushing boundaries and building a better culture for cannabis industry professionals.
After 20 years of creating successful emerging technology companies such as the marketing analytics platform Unified, Owen said he noticed a lack of similar monetization for cannabis advertising.
“Cannabis was a one-sided marketplace. Cannabis advertisers would place ads and curate deals, knowing very little about how these strategies were resonating with consumers, leaving marketers in the dark," he said.
“Marketers in the space already face plenty of difficulties with advertising. The driving force behind Muncheez is to provide the same level of data-driven insight non-cannabis marketers have at their disposal.”
Origin House (OTC:ORHOF) subsidiary Trichome Financial Corp. entered into a CA$2 million ($1.5 million) two-year financing arrangement with licensed Ontario cannabis retailer C.G.S. Foods Inc. (dba Ganjika House). Ganjika House said it will open its Toronto retail location April 1.
“With the core of Trichome’s infrastructure in place and the ability to leverage Origin House’s significant U.S. market knowledge, we believe Trichome is uniquely positioned to capitalize on credit market opportunities in Canada and the U.S.,” said Trichome Financial CEO Michael Ruscetta.
Origin House also announced this week that its California subsidiaries Kaya and FloraCal have been awarded annual cannabis licenses.
The Hunny Pot Cannabis Co. said it will also open a store in Toronto April 1.
“We are beyond excited, not just for April 1, but because this is such a critical moment for Canadian policy. This is a historic moment in time, and we think that The Hunny Pot Cannabis Co. has the unique opportunity to set the precedent for future retailers by doing this the right way —producing responsibly, selling responsibly, consuming responsibly and regulating responsibly," a company representative told Benzinga.
CBDTOX, a CBD-infused hangover remedy, launched in the U.S. A mixture of hemp-derived CBD (cannabidiol), natural supplements, vitamins and electrolytes, CBDTOX targets the physical, mental and emotional lows associated with the dreaded hangover from alcohol.
“Drinking is a large part of our culture in America, so many are often conflicted with the desire to excel professionally while also maintaining a social life,” said Kait LeDonne, head of operations. “CBDTOX Hangover Remedy aids in the dilemma of balancing major life moments in a way that promotes both health and enjoyment.”
True Leaf Medicine International Ltd. (OTC:TRLFF) a global cannabis and hemp wellness brand for pets, announced its hemp-based supplements for pets are now sold in 3,500 stores worldwide with the addition of Pet Planet as a North American retail partner.
“As cannabis and hemp products continue to gain mainstream market momentum, our fully legal, hemp-based formulas have caught the attention of pet retailers in North America and Europe,” said Darcy Bomford, founder and CEO of True Leaf. “Today’s announcement is a testament to the quality and care we put into our products for pets. When you shop at Pet Planet, you know the products you are buying are nutritious and meet premium quality standards.”
Las Vegas-based GB Sciences, Inc (OTC:GBLX) launched GBS Global Biopharma Inc., a Canada-based cannabinoid medicine company, to expedite its research into 60 health conditions. GBS Global’s propriety R&D creates natural and synthetic cannabinoid-based “complex mixture” medicines. The company’s Parkinson’s, neuropathic pain and cardiac hypertrophy Rx programs are in the late preclinical stage of development. Over-the-counter programs for irritable bowel syndrome, sleep disorders and psoriasis are at the formulation stage.
“Basing our R&D In Canada lets us evaluate medications much faster than in the U.S. and freely collaborate with research partners globally to address conditions that impact many millions of people. This is an important day for our company, investors and patients," John Poss, GBS Global Biopharma board chair and GB Sciences CEO, told Benzinga.
CBD Unlimited (OTC:EDXC) launched The Premium Blue Line X, an addition to its “controlled-dosing, targeted delivery and dual therapy” product suite.
“As we introduce our new Premium Blue Line X to the market, we are enthusiastic to reach an even greater customer base. We listen to what the consumer wants and are continuously innovating to meet customer standards. CBD Unlimited takes pride in its superior product line and we believe our Premium Blue Line X will be the perfect addition to our product family," CBD Unlimited CEO Todd Davis told Benzinga.
Evalon, a subsidiary of U.S. Bancorp (NYSE:USB), decided to close all of its CBD merchant accounts.
Brian Baum, CEO of Cannovia, a company focused on federally legal CBD, said “the sudden decision of U.S. Bank to withdraw from the CBD industry is just one more speed bump on the road to a fully functioning CBD industry.”
The real loser is the consumer. CBD companies will find workarounds, but consumers face inconvenience and potentially higher transaction costs as they seek to purchase CBD-infused products.
"The emerging CBD industry requires leadership across all sectors … in the banking industry, where U.S. Bank seemed to be taking a leadership role, there is now a void in leadership," Baum said.
Canndescent announced it will utilize solar energy for its indoor cultivation facility in Desert Hot Springs, California. This commercial-scale, onsite clean-energy system is the first in the world completed by a cannabis company to create sustainable energy for its grow operations.
The California Energy Commission recently updated building regulations, requiring new residential homes to incorporate rooftop solar systems by 2020 and new nonresidential buildings to have them by 2023.
Canndescent’s solar capabilities give the company a head start in the transition to high-efficient energy technologies and also provide a model to other grow operators in the state. Not only is this a major milestone for the cannabis industry as a whole, but it’s one of many steps Canndescent is making on its roadmap towards sustainability.
“Canndescent is one of the most forward-thinking cannabis companies in the world. We are using our cultivation facility to create new capacity for solar power in order to deliver a product that is more sustainable for our community and state,” said Canndescent CEO Adrian Sedlin. “We’re proud to be ahead of progressive state laws mandating renewable energy in California by 2023.”
Palomar Solar was ultimately chosen to design and construct the 282.6-kilowatt commercial-sized solar project, completing construction in just eight weeks.
"It has been estimated that 1 percent of America's electricity generation is used by cannabis growers, a very significant figure given growth projections for the cannabis industry,” said Adam Rizzo, co-founder of Palomar Solar. “We are pleased to help Canndescent’s indoor grow operations achieve sustainability with our clean-energy solutions."
Emjay launched a “white glove” cannabis delivery service catering to the Los Angeles market. The health- and wellness-focused cannabis platform has partnered with Beboe, an upscale line of cannabis vaporizer pens and edible pastilles, and has debuted in the city as the exclusive delivery service to “The High End,” a first-of-its-kind cannabis lifestyle and wellness concept shop inside Barneys New York in Beverly Hills.
“As a company in an emerging market, we are given the opportunity to shatter expectations and industry norms. Partnering with an upscale cannabis brand like Beboe and providing fulfillment for a luxury retailer like Barneys New York is a clear sign that Emjay and our community are moving in the right direction, bridging the gap between cannabis culture and the mainstream,” said Miranda Lee, VP of operations and brand at Emjay.
CBDistillery, a retailer of hemp-derived CBD products, launched a transdermal topical CBD patch that was almost two years in the making.
"We are beyond excited with the launch of our new transdermal patches that allow absorption through the skin and directly into the bloodstream,” said Chase Terwilliger, CEO of CBDistillery, a Balanced Health Botanicals brand. "Our product development team spent two years perfecting this technology prior to release, and we are consistently engaged in R&D with the goal of providing consumers access to new technologies and delivery methods."
Seedo Corp. (OTC:SEDO), announced that it has partnered with an Israeli community farm to establish the first fully automated, commercial-scale, pesticide-free and containerized cannabis farm. This comes on the heels of Israel’s recent approval of medical cannabis exports, positioning Seedo to become a key player in worldwide markets requiring reliable and uniform production goals that meet pharmaceutical-grade standards. Within 36 months of operation, the project is estimated to produce a minimum of 14 tons of dry cannabis bud, generating estimated revenue of $24 million dollars.
“The world can look to Seedo's partnership with Israeli institutions as a business model for cannabis production and exportation,” said Seedo CEO Zohar Levy. “We're looking forward to expanding the Seedo brand into new markets with our fully automated and containerized commercial solution that generates high-quality and pesticide-free cannabis without sacrificing yield.”
Vireo Health, a physician-founded, physician-led cannabis company, went public this week, listing on the Canadian Securities Exchange under the symbol VREO. Founded in 2014 by an emergency room doctor, Vireo Health was awarded Minnesota’s first medical cannabis license. Today, Vireo is a multistate operator producing and selling a wide variety of all-natural, cannabis-based products in Minnesota, New York, Pennsylvania, Maryland, Rhode Island and Ohio.
“The development of the cannabis industry is only in the early innings, and we’re taking a long-term approach to this business. We expanded to our first five states through highly cost-effective, merit-based license awards, and our success has been a testament to our true expertise in medicine and science," Kyle Kingsley, CEO and founder of Vireo, told Benzinga.
"As Vireo looks to the future, we plan to invest in areas with significant opportunities for long-term growth, including proprietary products driven by scientific superiority, scaled efficient manufacturing processes and equipment and meaningful intellectual property ancillary to the cannabis industry.”
Canopy Growth and OG DNA Genetics announced an extension and expansion of their previously announced partnership through 2024.
“With this newly signed agreement, Canopy Growth and DNA have extended their partnership beyond Canada and Jamaica and have committed to bringing DNA’s world-renowned genetics to a soon-to-be disclosed European market,” according to a press release.
Read about this and other news with our friends at Marijuana Money.
More From Benzinga Cannabis
The following are more interesting cannabis-related stories from this week.
Michigan-based Green Peak Innovations announced the closing this week of an oversubscribed mezzanine debt round worth over $30 million.
Tilray reported its fiscal fourth-quarter and full-year financial results.
Cresco Labs Inc. (OTC:CRLBF) announced plans to enter the Florida market by signing a letter agreement to acquire the ownership interest or assets of VidaCann Ltd for roughly $120 million in cash and stock.
MedMen signed an agreement for a convertible credit facility of up to $250 million from Gotham Green Partners.
Greenlane Holdings filed its initial S-1 Form with the Securities and Exchange Commission to have its stock listed on the Nasdaq.
Canopy Growth acquired AgriNextUSA.
CB2 Insights announced it will acquire MedEval Clinic.
Multistate operator Grassroots Cannabis announced the completion of its first capital round of $90 million.
Check out these and many other cannabis stories in our cannabis portal.
Interesting Data & Information
Prohibition Partners launched “The African Cannabis Report,” dedicated to the African legal cannabis market. The report includes detailed market forecasts, regulatory time line analysis, consumption data and health care analysis for nine key markets and predicts the market could be worth over $7.1 billion in the next five years.
Although widely grown across the continent — producing over 38,000 tonnes of cannabis annually — cannabis is illegal in most African countries. High unemployment rates and a global decline in demand for tobacco crops has hit these economies hard, and many farmers rely on the black market trade to provide for their communities.
With affordable land, low-cost labor and an experienced agricultural workforce, Africa offers enormous opportunity to local startups and foreign companies looking to service the rising international demand for cannabis.
"The region’s health care system is inadequate and inaccessible for many citizens. This means that the 'channels to market' for medicinal cannabis will rely on NGOs and health charities who may be less open to prescribing cannabis," Daragh Anglim, managing director of Prohibition Partners, told Benzinga.
"Implementing new production centers may prove costly and time-consuming and will rely on international investment. As such, governments will need to safeguard local interests by implementing clear legislation."
Weed lovers got in on St. Patrick's Day celebrations this year for an extra-green party. Cannabis sales increased by 17 percent and transactions increased 15 percent on St. Patrick's Day Sunday this year compared to an average Sunday, according to Denver cannabis software group Flowhub.
However: 2019 St. Patty's day sales were down 10 percent from 2018 (a Saturday, which may explain the decrease in sales). The Saturday before St. Patrick's Day showed a 10-percent increase in sales and a 12-percent increase in transactions compared to an average Saturday.
Weekend totals increased as well, with a 19-percent uptick in sales and a 25-percent uptick in transactions for St. Patty's Day weekend 2019 vs. St. Patty's Day weekend 2018.
Overall, though, average sale amounts were down from last year — but that's likely due to lower prices in Colorado and Oregon.
March 29-30: The NoCo Hemp Expo will gather hemp industry people at the Crowne Plaza DIA Convention Center in Denver.
Morris Beegle, founder of NoCo Hemp Expo, told Benzinga: “The sheer industry response and anticipation for this year's NoCo Hemp Expo has been off the charts. We have expanded our Business Conference and Farm Symposium programming by 50 percent, added a new Investor's Forum and sold out of exhibition space within 25 days of opening registration."
April 8–10: Cannabis Science Conference will host its first east coast event at the Baltimore Convention Center in Baltimore, Maryland. The Cannabis Science Conference, organized by CSC Events, LLC, will feature television icons and cannabis advocates Montel Williams and Ricki Lake, along with over 75 expert presenters.
April 10: Denver is holding its monthly CIA meetup. But it’s not what you think. This is a Cannabis Industry Associates Meet Up.
“I was new to the cannabis industry and wondered what others did in the space, so I started a monthly networking group on Meetup called CIA about a year-and-a-half ago. Today we have grown to over 1,000 members with approximately 45-75 people in attendance each month," Karen Thomas, the event organizer and executive project manager at Medicine Man Denver, told Benzinga.
"The group represents a wide spectrum in the cannabis space from attorneys to chefs, bankers, dispensary owners, sales reps, investors and insurance reps. No agenda, no featured speakers, just a place to gather, meet and connect others to those that may need their services or are looking to get into the space."
April 17-18: The Benzinga Cannabis Capital Conference, the premier gathering of cannabis entrepreneurs and investors in North America, returns to Toronto, Canada. Keynote speakers include Giadha Aguirre de Carcer, Cam Battley, Alan Brochstein, Jon Najarian, Danny Moses, Jeanne M. Sullivan, Tim Seymour, and many more! Find all the info you need at bzcannabis.com.
April 25-26: The CannaMéxico World Summit returns to Centro Fox, in Leon, Mexico. Hosted by former Mexican President Vicente Fox, the conference elevates a safe and legal global cannabis market. By 2028, the Latin American cannabis industry could reach a valuation of $12.7 billion.
More than 2,000 attendees are expected to converge at CannaMéxico 2019, as well as high-profile speakers including: television host Montel Williams, scientist Inbar Maymon-Pomeranchik and NORML Canada vice president Deepak Anand. Topics include legislation and regulation, eco-growth, medicine and science, security and industrial opportunities.
May 7: DCM hosts its inaugural Cannabis Technology Summit, CannTech 2019, designed to accelerate the cannabis technology industry by bringing together entrepreneurs, industry executives and investors from all across North America. The agenda includes discussions on the most salient topics in the industry — such as regulation, distribution and financing — and culminates in a startup pitch competition with a $30,000 prize (“The Golden Seed”) to showcase some of the most exciting companies in the space.
Featured speakers include Eaze CEO Jim Patterson, Pax CEO Bharat Vasan and Dosist CEO Gunner Winston, with more to be announced. CannTech is scheduled for May 7 in San Francisco.
“We've been optimistic about the cannabis industry for a while now, starting with our seed round investment in Eaze in 2014, which made DCM the first firm on Sand Hill Road to get in the space. We created CannTech to be a launchpad for emerging cannabis professionals to get funded, educated and connected, and we're excited to hear the ‘big ideas’ brought to the table,” said Kyle Lui, partner at DCM.
May 28-June 1: The Cons is a gathering of three trade and fan shows — the Cam Con, the Cannabis Con and the Inked Con — all under one roof at the SLS South Beach Hotel in Miami Beach, Florida.
The Cons 2019 will offer a variety of seminars with top industry panelist, networking parties and performance displays to benefit the industry’s content providers, models and affiliates. While these industries have differences, in many ways they overlap. All three shows are model-driven because they are the true industry ambassadors, which is the core value of The Cons.
May 30-31: The Concentration Expo is coming to San Diego. Concentration is a cannabis extraction conference and event assembling the entire specialty cannabis extraction and analytical science spectrum in one connected space that’s focused on providing real solutions with proven success. Attendees will connect firsthand with industry leaders offering tangible ideas and practical applications for all areas of cannabis extraction and analytical science. The conference is a two-day immersive event offering exclusive content and keynote seminars alongside vetted exhibits and interactive experiences.
June 7-9: The Women Grow 2019 Leadership Summit is coming to the East Coast. Chanda Macias, the CEO of the woman-focused organization, will welcome multitudes to her hometown of Washington, D.C., from June 7-8 for the largest cannabis event of its kind.
“We look forward to amplifying our message of cannabis legalization, inclusion and equality here in our nation’s capital,” Macias said. “Being steps away from the U.S. Capitol, where we have witnessed an influx of women assuming leadership positions, is sure to inspire our community as a whole to connect, educate and empower female leaders in this space.”
Traveling: the CBD Expo Tour is kicking off. The events feature more than 70 exhibitors, along with a substantial lineup of speaker presentations and panel discussions from experts in the research, production, globalization and sale of CBD products.
“After a successful 2018 tour, our busy 2019 schedule opens with CBD Expo MIDWEST. We're taking it into a hardworking area of America where the population is seeking natural pain relief. We will be continuing to educate on the benefits of CBD wellness and why the pharmaceutical companies, as well as the FDA's suppression efforts, are self-serving,” said Celeste Miranda, founder of the CBD Expo Tour and CEO of MACE Media.
Picture by Javier Hasse.
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