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The Week In Cannabis: ETFs Are Down, Virginia Legalizes, Houseplant Hits The US, Big Retail Makes Moves

March 5, 2021 4:33 pm
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The Week In Cannabis: ETFs Are Down, Virginia Legalizes, Houseplant Hits The US, Big Retail Makes Moves

In a week where most stocks took a beating, cannabis equities were no exception. All major ETFs posted considerable losses. Over the last five trading days:

  • The ETFMG Alternative Harvest ETF (NYSE:MJ): lost 6%.
  • The AdvisorShares Pure Cannabis ETF (NYSE:YOLO): tumbled 8.3%.
  • AdvisorShares Pure US Cannabis ETF (NYSE:MSOS): dropped 6.3%.
  • The Cannabis ETF (NYSE:THCX): slipped 7.9%.
  • The Amplify Seymour Cannabis ETF (NYSE:CNBS): fell 8.9%.
  • The SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.9%, after recovering from Thursday's losses on Friday afternoon.

One move that pretty much flew under the radar: Alimentation Couche-Tard Inc., owner of Circle K, boosted its stake in Canadian cannabis company Fire & Flower Holdings Corp.  (OTCQX:FFLWF), converting roughly $52 million it held in debt to equity. Following the transaction, the retail giant will own 19.9% of Fire & Flower.

I think the move by Alimentation Couche Tard doesn't get nearly the amount of attention it should,” Green Market Report Editor-in-Chief Debra Borchardt told Benzinga. “Seeing a bigger move in the convenience store space towards cannabis should be unsettling to most cannabis companies,” she warned, wondering if smaller producers will eventually be relegated to craft cannabis, as “the volume players become the Budweisers and Miller beer versions of cannabis.”

Benzinga Cannabis content is now available in Spanish on El Planteo.

Houseplant, Seth Rogen and Evan Goldberg’s cannabis and lifestyle brand, is launching in the U.S. on March 11. The brand was founded in Canada back in April 2019 in partnership with cannabis giant Canopy Growth Corp. (NYSE:CGC). Since then, it has become one of the most coveted celebrity-backed brands in the cannabis industry.

In an email to Benzinga, Houseplant explained that Canopy will continue to be its licensee in Canada, but is not involved in the U.S. launch. In turn, Canopy launched its own CBD-infused sparkling water, dubbed Quatreau, in the U.S. as well.

Policy Moves

  • Virginia lawmakers approved a bill to legalize the commercial marijuana program. The legislation allows people over the age of 21 to use cannabis, starting Jan. 1, 2024, as well as the possession of up to an ounce of cannabis.
  • Michigan’s Marijuana Regulatory Agency disclosed that the state’s recreational cannabis market is opening to a new competition as of March 1.
  • Iowa lowered penalties for those caught with small amounts of marijuana. Under Senate Study Bill 1226, which passed subcommittee by a unanimous vote, possession of under five grams of marijuana is considered as a simple misdemeanor for a first offense.
  • The Mississippi House decided to go with the medical marijuana program voters approved in November, despite passing an alternative last month.
  • Mexico is on the verge of legalizing marijuana. A floor vote on a bill is scheduled for the government's Chamber of Deputies for March 9.

Financings And M&A

MariMed Inc. (OTCQX:MRMD) closed a $46 million financing facility with Hadron Healthcare Fund. Beacon Securities Ltd. advised the deal. 

Schwazze, previously known as Medicine Man Technologies Inc. (OTCQX:SHWZ), raised $34 million. CRW Capital Cann Holding LLC, an affiliate of Dye Capital, led the latest investment round, alongside other investors. The company also completed the acquisition of five Colorado-based Star Buds dispensaries in a $72.3 million stock and cash deal this week.

Greenlane Holdings Inc. (NASDAQ:GNLN) acquired the Eyce brand and all of Eyce assets. Eyce is a leading manufacturer of specialty silicone smoking products.

The Valens Company Inc. (TSX:VLNS) (OTCQX:VLNCF) acquired Canadian edibles manufacturer LYF Food Technologies Inc. in a cash and stock transaction valued at CA$24.9 million ($19.68 million).

Forian Inc. (NASDAQ:FOR) was officially launched after the completed combination of Helix Technologies, Inc. and Medical Outcomes Research Analytics, LLC. Shares began trading on NASDAQ under the symbol “FORA” on March 3.

“The increased growth of alternative therapeutics uniquely positions Forian to support both the healthcare and cannabis industries," CEO Dan Barton told Benzinga. "The combination of our organization’s significant capabilities and the commitment to invest will drive innovations to support our customers’ clinical, product development and marketing needs.”

Terra Tech Corp. (OTCQX:TRTC) agreed to acquire Umbrla Inc. for an undisclosed price.

Bio-sciences company EXMceuticals Inc. (CSE:EXM) is poised to merge with Global Cannabinoids (GC), a business-to-business (B2B) distributor of hemp oil, extract, isolates, and finished products. The combined entity will operate as Global Cannabinoids.

INDVR Brands agreed to acquire "substantially all" assets from Nevada-based Strainz Inc. and Colorado-based Bronnor Corp., including a processing and manufacturing facility in Denver, and three brands.

Earnings Reports

  • Lowell Farms Inc. (OTCQX:INDXF) — previously known as Indus Holdings — reported quarterly revenue of $9.2 million, down 15% slip from the corresponding three-month period in 2019.
  • Choom Holdings Inc. (OTCQB:CHOOF) posted its second quarter of fiscal 2021 revenue of $6.1 million, up by a whopping 350% from the same period in the prior year.
  • Columbia Care Inc. (NEO: CCHW) (OTCQX:CCHWF) released preliminary financial results for the fourth quarter and full-year 2020. It expects combined quarterly revenue to hover $81.8 million. That's up by 234% year-over-year.
  • High Tide Inc. (OTCQB:HITIF) wrapped up fiscal 2020 with roughly CA$8 million ($6.32 million) in adjusted EBITDA and CA$83.2 million ($65.7 million) in revenue.
  • Australis Capital (OTCQB:AUSAF) reported generating $90,000 in revenue in the third quarter while posting a net loss of $19.4 million.
  • Heritage Cannabis (OTCQX: HERTF) revealed its gross revenue declined by 58% year-over-year to $1.5 million in the fourth quarter of fiscal 2020. Meanwhile, its full-year gross revenue spiked 160% over the same period, reaching roughly $9.26 million.
  • Captor Capital Corp. (CSE:CPTR) generated over $4.2 million in revenue for the quarter ending Dec. 31. That’s a year-over-year increase of 99%.
  • Ganja Goddess reported 100% growth in revenue year-over-year; a 53% uptick in customers coming onto the platform and making purchases; and a 635% increase in revenue for cannabis products marketed to support sleep. CEO Zachary Pitts told Benzinga: “With the pandemic creating a range of challenges for everyone, it’s been interesting to see which types of products our consumers demanded the most and how their purchases are mirroring those challenges.”

Find all the details on these and other earnings reports on Benzinga Cannabis’ Earnings Center.

Data

According to cannabis tech company GemmaCert, some 45% of cannabis products worldwide are mislabelled with higher than actual THC levels. The firm studied more than 1.5 million potency scans across 35 countries on six continents.

According to analytics firm BDSA, total cannabis sales last year hovered $21.3 billion across the globe. 

“The cannabis industry faced numerous challenges in the past few years, none so potentially disruptive as the coronavirus pandemic in 2020,” BDSA Chief Executive Micah Tapman said. “Our previous forecast was conservative based on the expected economic fallout from the pandemic, but the industry not only survived, it thrived and legal cannabis gained considerable ground, exceeding our expectations in several markets.”

Other News

IM Cannabis Corp. (CSE:IMCC) (NASDAQ:IMCC) debuted on the NASDAQ Capital Market on Monday becoming the first Israeli cannabis company to do so.

Rise dispensary owner Green Thumb Industries Inc. (CSE:GTII) (OTCQX:GTBIF) is entering the cannabis beverage market via a deal with Cann. The Chicago-based cannabis CPG company teamed up with the celebrity-backed cannabis beverage brand to produce and distribute its line of sparkling drinks in Illinois. The collaboration includes the expansion to additional markets, including New Jersey.

Nextleaf Solutions Ltd. (OTCQB:OILFF) will supply BevCanna with its Rapid Emulsion Technology by OILS. In addition, the company announced the Mexican Institute of Industrial Property granted it a patent that is key to the low-cost production of cannabis distillates. Following this approval, Nextleaf boasts the second-largest cannabis patent portfolio in Mexico.

ABSTRAX became the first terpene distributor to sell on the Weedmaps WP Exchange. Now, retailers and brands can enjoy same-day access to the company's extensive collection of both cannabis-derived (California only) and botanically-derived terpenes (throughout the U.S.). Max Koby, ABSTRAX founding partner and CEO, told Benzinga that the partnership will "revolutionize the way brands interact with terpenes as they grow their product lines."

Copperstate Farms announced plans to expand its cultivation operations, doubling its production footprint to 80-acres under glass. The company already operates a 40-acre grow, believed to be the largest cannabis greenhouse in the U.S.

The METRC Issue

Since February 17, businesses throughout the state of California have been experiencing significant outages with METRC’s external API. These outages have significantly impacted businesses that operate using software to sync relevant data back to METRC in order to maintain compliance.

Benzinga caught up with Colton Griffin, CEO of Flourish Software, which works with METRC. He explained that his clients and hundreds of other businesses across the state use this software, and this outage has caused major interruptions to how they deliver client service.

“It’s disheartening that these issues continue without being addressed. An external API is essential because METRC compliance is integral to maintaining business operations and state-mandated compliance tracking. This downtime prevents licensees from performing core operations such as invoicing, manufacturing and harvesting.”

Flourish and other industry participants sent an open letter to the CDFA and the BCC, asking the California Department of Food and Agriculture (CDFA), which administers METRC, to intervene and improve the service and reliability of this service.

Executive Moves

Read all about the latest executive moves here and here.

Top Stories Of The Week

Top Spanish stories:

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

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