The Week In Cannabis: Amazon, Canopy's Earnings, Africa's Largest Co., Drake, Ashley Benson And More

Another busy week in cannabis saw the stock market post generalized losses, as Inc. AMZN came out in support of the federal legalization of marijuana, announcing it will drop marijuana testing requirements for some of its workers.

Dave Clark, CEO of Amazon’s worldwide consumer division, said in a blog post that the e-commerce giant will actively support the Marijuana Opportunity Reinvestment and Expungement Act of 2021 (MORE Act), which would decriminalize marijuana at the federal level. The bill was reintroduced in Congress last Friday.

Canopy Growth Corporation WEED (NASDAQ: CGC) reported its fourth quarter and fiscal year 2021 earnings with a net loss for the year amounting to CA$1.7 billion ($1.41 billion), representing a CA$283 million wider loss versus FY 2020. 

The Canadian cannabis giant attributed these results to various expenses, credit losses, lower income tax recoveries, advancements of gross margins and sales reductions.

Cantor Fitzgerald’s analyst Pablo Zuanic kept a ‘Neutral’ rating on Canopy’s stock, lowering their price target to CA$30.50 from C$32.

Canopy’s quarterly business-to-business sales were stable, and therefore better than its competition and previously provided outlook, explained Zuanic in a Tuesday note.

According to the analyst, good business-to-business sales in the quarter should reveal significantly advanced March shipments, with many other cannabis companies reporting double-digit drops in adult-use shipments for the same period. “So, in that context, these are good numbers.”

Later in the week, Canopy dropped its deal with Canadian rapper Drake. Their partnership was structured around an agreement where Drake would hold a 60% stake in a cannabis brand named More Life Growth Company, while Canopy would control the remaining 40%.

Commenting on the news, Green Market Report’s Debra Borchardt told Benzinga, “Canopy Growth continues to log massive net losses which tend to overshadow the company's revenues. Despite reporting over half a billion in revenues this week, the company's continuing efforts to rightsize and clean up old deals have left a mark. Dropping Drake from the lineup this week wasn't too shocking, but it would be great if Canopy could have a week where it wasn't forced to deliver another negative news headline."

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

Meanwhile, on Thursday and Friday, Benzinga hosted a new edition of the Benzinga Cannabis Capital Conference, featuring most of the top names in the industry. Speakers discussed a wide array of topics, from building a $1 billion cannabis supplies company and the road to federal legalization to the CBD beverage market, growing cannabis in hotter climates and multi-billion dollar M&A deals.

And Hempz, a hemp seed oil-based skin and body care brand, named HBO's Pretty Little Liars star Ashley Benson as its new celebrity ambassador.

EFTs were all down. Over the four trading days of this week:

  • The ETFMG Alternative Harvest ETF MJ: lost 3%.
  • The AdvisorShares Pure Cannabis ETF YOLO: tumbled 1.1%.
  • The AdvisorShares Pure US Cannabis ETF MSOS: dropped 2.2%.
  • The Cannabis ETF THCX: was down 2.7%.
  • The Amplify Seymour Cannabis ETF CNBS: lost 1.6%.
  • The SPDR S&P 500 ETF Trust SPY closed the week almost flat at $422.60.

Policy, Science And Data

The Latin American country of Argentina may soon have a regulated cannabis and hemp industry. On Wednesday, Argentina’s Minister of Productive Development, Matías Kulfas, presented a bill titled, "Regulatory framework for the development of the medical cannabis and hemp industry," within the framework of the Economic and Social Council.

Illinois continues its cannabis sales streak, breaking yet another record after exceeding $100 million for the third month in a row, according to the state’s Department of Financial and Professional Regulation.

Illinois cannabis buyers spent more than $116.3 million in May alone, surpassing the previous month's record by roughly $2 million.

The Connecticut cannabis legalization measure supported by Gov. Ned Lamont passed another committee, possibly opening the doors for a floor vote in the coming week.

The Nevada Senate approved the cannabis consumption lounges legalization bill in a 17-3 vote Monday, sending it to the governor’s desk.

Tennessee Gov. Bill Lee signed a narrow medical cannabis expansion bill, SB 118, into law. Under this law, patients that qualify for medical cannabis products could legally use products with no more than 0.9% THC. In-state production does not fall under this law. 

Financings And M&A

South Africa-based cannabis brand Goodleaf Company is merging with Highlands Investments in a deal valued at almost R650 million ($50 million).

The combination of Goodleaf, the leading retail brand in South Africa, and Highlands, formerly Canopy Growth CGC Africa, will result in the creation of the largest vertically integrated cannabis operation in Africa. The combined entity boasts more than $25 million in investments in the continent to date.

A cannabis-focused special purpose acquisition company, Northern Lights Acquisition Corp has plans to list on the Nasdaq Capital Market, hoping to raise $100 million with its initial public offering.

Aurora Cannabis Inc. ACB ACB repaid its $89 million credit facility, without penalty.

The move, which came on the heels of disclosing its plans to raise $300 million by selling its commons shares through the at-the-market offering, results in principal and interest savings of roughly $25 million over the next year.

The Valens Company Inc. VLNS VLNCF secured some $46 million in financing through a bought deal public offering of its units.

Schwazze (OTCQX:  SHWZ), previously known as Medicine Man Technologies Inc., will buy the assets of Southern Colorado Growers in Huerfano County, Colorado for $11.3 million.

Green Thumb Industries Inc. GTII GTBIF, the owner of Rise dispensaries, acquired a Massachusetts-based medical cannabis cultivator and retailer, Liberty Compassion, Inc.

TPCO Holding Corp. GRAM GRAMF, which does business as The Parent Company, has chosen Josephine & Billie's as its first social equity corporate venture fund investment.

Earnings Reports

Hollister Biosciences Inc. HOLL HSTRF HOB revealed its financial results for the first quarter of 2021 as well as the last three months of 2020, having generated $23.1 million in the first quarter of this fiscal year, compared to $0.95 in the corresponding period of 2020 and $11.7 million in the previous period.

WeedMD Inc. WMD WDDMF (FSE:4WE) reported its revenue rose by 41% year-over-year, reaching CA$29.4 million ($24.3 million) in 2020.

The company reported its financial results for the 2020 fiscal year revealing gross loss, before changes in fair value, of roughly CA$22 million, compared to a gross profit of CA$4.05 million in 2019.

Choom Holdings Inc. CHOO CHOOF said its revenue grew by 147.94% year-over-year hitting $5.1 million in the third quarter of fiscal 2021. The company also reported that revenue for the nine months ending March 31 amounted to $17.7 million, representing a 403.67% increase compared to the same period of fiscal 2020.

Red White & Bloom Brands Inc. RWB RWBYF announced partial results for the first three months of 2021, without contributions from RWB Michigan, RWB Florida and RWB Illinois.

The Toronto-based company reported having earned CA$32.2 million ($26.7 million) in adjusted sales over the period, representing a sequential increase of 2.4%. In addition, adjusted EBITDA came in positive at $460,000 for the first three months of this fiscal year.

RIV Capital Inc. RIV (OTCQX: CNPOF) posted its latest financial earnings report on Thursday, touting a pop in total comprehensive income that hit CA$64.8 million ($53.7 million) in the fourth quarter of 2021.

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

Other News

SugarTop Buddery, a musician and family-owned Oregon-based cultivator, processor and wholesale distributor of “top grade tasty” cannabis flower and pre-rolls, is entering into a co-branding partnership with agtech company Terra Vera. As part of their partnership, the companies have developed a new unique logo to ensure the clear and prominent labeling of SugarTop’s products in collaboration with Terra Vera’s non-toxic, pesticide-free crop management solutions.

Oregon cannabis consumers will soon find the array of premium SugarTop Buddery flower strains, as well as pre-rolls, treated by Terra Vera proudly labeled in licensed dispensaries across the state.

Springbig announced a new integration with WM Store, Weedmaps' latest SaaS product from WM Business. Through this integration, customers who shop at dispensaries using both springbig and WM Store will be able to access their loyalty wallets and redeem rewards when they shop on those retailers’ branded websites. This will in turn drive new loyalty program enrollment and increase dispensary brand loyalty among returning customers.

"Consumers, brands and dispensaries alike will benefit from our latest loyalty integration with Weedmaps as cannabis purchases increasingly shift to digital platforms," said Jeffrey Harris, CEO of springbig. "We are constantly seeking out new inroads for cannabis businesses to find and retain new customers, and we believe this agreement will allow retailers to stay competitive in this rapidly evolving market."

Executive Moves

MariMed Inc. MRMD appointed Howard Schacter as its chief communications officer.

Revolution Global welcomed finance industry veteran and cannabis investor Jared Cohen as its new head of corporate development. 

Also find out all about the latest executive moves at:

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

Top Spanish stories:

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

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