The Week In Cannabis: Big Tobacco, MSO Goes To Europe, Mexico, DC, And More
This was a week of big news for the cannabis industry.
Curaleaf Holdings Inc. (OTCQX:CURLF) agreed to acquire one of Europe’s largest cannabis companies, EMMAC Life Sciences, for approximately $286 million in cash and stock. The transaction, which is expected to close during the second quarter of 2021, makes Curaleaf one of the first U.S. multi-state operators to expand in Europe.
Silver Spike Acquisition Corp II (NASDAQ:SPKBU) made its debut on the Nasdaq Capital Market, disclosing the pricing of its initial public offering of some 25 million of its units at $10 per unit.
In addition, tobacco giant British American Tobacco PLC (NYSE:BTI) opted to invest CA$221 million ($175.7 million) in OrganiGram Holdings Inc (NASDAQ:OGI). It now owns a 19.9% equity interest in an OrganiGram subsidiary. The goal is to establish a "Center of Excellence" dedicated to the development of cannabis products, with a focus on CBD.
“The most meaningful news this week was the $175 million investment into Organigram by British American Tobacco. The investment will ultimately give the tobacco company an almost 20% equity position,” Green Market Report editor-in-chief Debra Borchardt told Benzinga. “The cannabis industry has long feared that big tobacco would take over once cannabis was federally illegal and this seems to be the first evidence of that fear.”
ETFs rebounded after taking a hit last week. Over the last five trading days of this week:
- The ETFMG Alternative Harvest ETF (NYSE:MJ): gained 13.15%.
- The AdvisorShares Pure Cannabis ETF (NYSE:YOLO): advanced 11.65%.
- The AdvisorShares Pure US Cannabis ETF (NYSE:MSOS): rose 4.8%.
- The Cannabis ETF (NYSE:THCX): was up 16.2%.
- The Amplify Seymour Cannabis ETF (NYSE:CNBS): gained 13.9%.
- The SPDR S&P 500 ETF Trust (NYSE:SPY) was up 2.77%.
Policy Moves And International News
The U.S. Department of Agriculture’s (USDA) secretary, Tom Vilsack, approved a federal rule outlining the hemp industry regulations, poised to take effect on March 22.
Florida legislators are reviewing the adoption of a new bill that could drastically limit access to medical marijuana for qualified pediatric patients.
Washington D.C. lawmakers are preparing for the possibility of a legal adult-use market in the city. The Government Accountability Office published a letter Monday stating that city officials are allowed to take preliminary action on cannabis, so long as they don’t “enact” a bill to legalize the Schedule I substance.
South of the border, Mexico's lower chamber passed a revised version of the cannabis legalization bill. It's now up to the Senate, which passed a previous version of the bill in 2020, to vote on the amendments. If approved, it would then head to bill supporter and President Andrés Manuel López Obrador for final approval.
Benzinga Cannabis content is now available in Spanish on El Planteo.
Financings And M&A
- Verano Holdings Corp. (CSE:VRNO) raised CA$100.04 million ($79.65 million) via a bought deal private offering.
- Aleafia Health Inc. (OTCQX:ALEAF) clinched $22.7 million via a previously announced bought deal offering.
- WeedMD Inc. (OTCQX:WDDMF) secured $17.25 million in financing through a bought deal short-form prospectus offering of its units.
- Australis Capital Inc. (OTCQB:AUSAF) agreed to buy cannabis company Green Therapeutics LLC in a deal worth between CA$8 million ($6.4 million) and CA$10 million.
- Akerna Corp (NASDAQ:KERN) agreed to acquire fellow cannabis business software firm Viridian Sciences in an all-stock transaction. The terms of the deal were not disclosed.
- Innovative Industrial Properties Inc. (NYSE: IIPR) purchased a Texas-based property for roughly $3.4 million.
- Cresco Labs (OTCQX:CRLBF) is on its way to take over Bluma Wellness Inc. (OTCQX:BMWLF) in an all-share transaction worth $213 million expected to close during the second quarter of 2021.
- Harborside Inc. (OTCQX:HBORF) backed up a California-based cannabis company LPF JV, LLC with $5 million, completing a strategic investment in Loudpack via a 15% secured convertible note that's due December 2022.
- Hightimes Holding Corp will buy a cannabis dispensary Desert’s Finest in a $6.2 million deal.
- AeroPay raised more than $5 million in a venture round led by Chicago Ventures.
- One80 Intermediaries, a brokerage insurance solutions provider, acquired cannabis insurance provider Cannasure Insurance Services.
- Santa Fe Farms acquired High Grade Hemp Seed for an undisclosed price. “Santa Fe Farms’ expertise in industrial hemp was a major factor for High Grade,” Mike Lauder, High Grade CEO, told Benzinga. “We're excited to expand in this sector while also staying focused on our core competency in cannabinoids. This is a win-win for both companies."
- Aurora Cannabis (NASDAQ:ACB) put one of its cannabis cultivation greenhouses up for sale. While the Canadian cannabis giant hasn’t set the asking price yet, management said it is “open to a broad range of potential transaction structures and forms of consideration in order to maximize value.”
Acreage Holdings Inc. (OTCQX: ACRDF) generated $31.5 million in revenue in the last three months of 2020, up 50% year-over-year. For the full-year revenue amounted to $114.5 million, representing year-over-year growth of 55%.
Curaleaf Holdings Inc. (OTCQX:CURLF) reported achieving record managed revenue of $233.3 million in the fourth quarter, up by 86% year-over-year and 21% sequentially. The company also confirmed hitting another record with total revenue amounting to $230.3 million for the same period, representing a year-over-year increase of 205% and quarterly growth of 26%.
Ayr Wellness Inc (OTCXQ: AYRWF) released its fourth-quarter and full year 2020 earnings, including a 48% surge in Q4 revenue to $47.8 Million. Full year revenue was up 25%.
In an exclusive interview with Benzinga, COO Jennifer Drake said that while 2020 was a challenging year for the cannabis industry, it presented "a tremendous growth opportunity" for Ayr.
"We started last year with operations in just two states and now have a footprint across seven states, with more growth on the horizon," she said. "We ended 2020 with over $236 million in cash on our balance sheet and an adjusted EBITDA up over 100% from 2019. This success further affirms that our disciplined and strategic approach to building our footprint and sharp focus on cultivation – as all our success starts with the quality of our flower – is paying off. We are now one of the top MSOs in the United States.”
Find all the details on these and other earnings reports on Benzinga Cannabis’ Earnings Center.
Acquired Sales Corp. (OTCQX: AQSP) changed its name to LFTD Inc. This decision is subject to changing the company’s articles of incorporation in Nevada, all necessary securities filings, and governmental approvals. The planned name change is intended to better reflect the company’s ownership of Lifted Made. The company also plans to request a new trading symbol.
Papa & Barkley announced a partnership with wellCORNER to offer the form’ers CBD Releaf product line through wellCORNER’s ecommerce platform.
Green Check Verified introduced account monitoring tools to its compliance management platform. This will enable financial institutions to achieve comprehensive program and relationship oversight, measure customer activity versus peer and historic performance and gain insights that allow for the safe expansion of products and services in the legal cannabis industry.
“As the legal cannabis industry continues to expand, we are working every day to ensure banks and credit unions have the tools and resources they need to serve this industry in a mutually beneficial manner," CEO Kevin Hart told Benzinga. "Our latest account monitoring feature allows our partner FIs unparalleled insights into their CRB customers, and in doing so, allows them to offer the types of products and services these businesses need to thrive."
Eybna, a terpene manufacturer based in California and Israel, is expanding its U.S. footprint with the opening of a new R&D center in Denver, Colorado. This joint venture with Aseppak and dedicated os to the innovation of cannabis-infused consumer packaged goods.
Elevate Holistics expanded into New Jersey and Ohio. More states are expected to come online soon.
South Dakota saw the debut of the Cannabis Industry Association of South Dakota.
“Voters made it clear that they wanted legalization as a way to help patients and bring in additional tax revenue. South Dakota is a very business friendly state, so it made sense to create a trade association that could serve as a voice for cannabis businesses. We want to be sure to build a strong, safe, and well-regulated industry in South Dakota, so we look forward to working with the state to ensure they keep business owners in mind as they begin to write rules to govern this brand new industry,” executive director Ned Horsted told Benzinga.
GrowGeneration Corp. (NASDAQ:GRWG) entered two leases in Los Angeles County, California, which will be adapted for the company’s two new Super Hydroponic Garden Centers. The details of the leases weren’t disclosed.
Tilray, Inc. (NASDAQ:TLRY) received approvals from New Zealand's Ministry of Health and the Medicinal Cannabis Agency for the launch of its medical cannabis products.
Green Thumb Industries (OTCQX:GTBIF) debuted in California, bringing its retail footprint to eleven states.
Inkbrite made its debut, seeking to help indie brands navigate the complex regulatory requirements for packaging and labeling.
“At Inkbrite, we’re proud to be solving the packaging compliance headache for craft producers who are the bedrock of our industry,” noted Inkbrite CEO and Founder Laurie Peterson. “Because our easy-to-use app is simple and makes designing and sourcing compliant packaging affordable, it expands accessibility and helps craft producers get to the shelf in this wildly competitive market.”
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Lead image by Ilona Szentivanyi. Copyright: Benzinga.
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