The Week In Cannabis: Justice Clarence Thomas, Mexico's Decriminalization, Apple's Policy Changes, Tilray And More

Below is a recap of the main news related to the cannabis industry and markets for the week of June 28, 2021.

Justice Thomas

Justice Clarence Thomas, the Supreme Court’s longest-serving member, issued a crude statement on federal cannabis prohibition, highlighting irregularities in the federal government’s approach to marijuana policy.

Thomas, who has served in the Supreme Court for almost 30 years and is often viewed as among the most conservative, said “once comprehensive, the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana.”

The Judge went so far as to say that prohibition of intrastate cannabis use or cultivation may no longer be necessary “to support the Federal Government’s piecemeal approach.”

The government, according to Thomas, has sent mixed signals on its position regarding cannabis prohibition.

While on the one hand, federal law still “flatly forbids the intrastate possession, cultivation, or distribution of marijuana,” the federal government has consistently allowed these acts.

All details here.

Mexico

Mexico's Supreme Court voted down the country’s cannabis prohibition laws in an 8-3 vote.

The passage comes after the Senate and Congress missed several High Court-ordered deadlines to pass revised legislation.

Under the Supreme Court decision, citizens are now allowed legal access to cannabis, negating the previous exclusivity to medical patients. Citizens can now be issued permits for adult use and cultivation through the Health Department until legislation is passed.

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

The ruling does not approve of citizens turning to the illicit market in the meantime. Rather, cultivation laws allow a person to grow six plants for personal use, with a cap of eight per household.

Apple’s Policy Changes

As first reported by TechCrunch and WeedWeek, the ongoing conundrum between cannabis and tech took its latest turn last month, when Apple Inc AAPL updated its policies to allow pot-centric apps onto its store.

Under its new policy, Apple created leeway that allows "licensed and otherwise legal cannabis dispensaries" from working with Apple. Companies must also be geofenced to qualify for store listing.

The decision was not a cannabis-specific one made by Apple. Instead, the move came as part of the company's attempt to curtail fraudulent apps that scam consumers across the marketplace.

Alphabet Inc Class A GOOGL, which announced its ban on cannabis apps in 2019, continues to stick with its policy regarding its Google Play store.

The decision comes as tech giants continue to handle cannabis apps and accounts in often unclear ways.

Markets

Over the five trading days of this week:

The ETFMG Alternative Harvest ETF MJ: lost 2.5%.
The AdvisorShares Pure Cannabis ETF YOLO: closed almost flat.
The AdvisorShares Pure US Cannabis ETF MSOS: rose 1.3%.
The Cannabis ETF THCX: was down 1.6%.
The Amplify Seymour Cannabis ETF CNBS: tumbled 0.7%.
The SPDR S&P 500 ETF Trust SPY closed the week up 1.68%.

GrowGeneration Corp GRWG was added to the Russell 2000 Index.

Tilray Inc. (NASDAQ: TLRY) released a proxy statement with an open letter from the company’s CEO Irwin D. Simon, in which he called on shareholders to support a proposal to be discussed up at the upcoming annual shareholder meeting.

Simon asked shareholders to support a proposal that will allow the company to increase the number of authorized shares of common stock, enabling it to make acquisitions for growth. He also asked shareholders to authorize several amendments and changes to the company’s organizational documents that would expand shareholders' rights.

Also this week, the company announced that its SweetWater Brewing Company launched its first Canadian craft cannabis brew in the U.S. in collaboration with Canada's Broken Coast Cannabis Ltd.

Sha’Carri Richardson

American sprinter Sha’Carri Richardson, who won the hearts of millions of sports fans, lost her chance to shine at this year's U.S. Olympics after she tested positive for cannabis.

The U.S. Anti-Doping Agency confirmed Friday that Richardson has accepted a one-month suspension by which the results of her Olympics trials have been "disqualified, and she forfeits any medals, points, and prizes" as allowed under the international anti-doping regulations.

A Weak Q2

The Global Cannabis Stock Index fell for the fourth straight month, dropping 4.1% to 57.10.

During the second quarter, the index was down 8.7%.

After gaining 5.2% in 2020 when it ended at 44.39, the index is up 28.6% in 2021 and has gained 94.2% over the past year.

The index dropped 38.3% from its 2021 closing high of 92.48 on February 10.

In addition, it had 46 qualifying members during the month, following the quarterly rebalancing at the end of March as well as Aphria’s merger with Tilray and Jazz Pharmaceuticals PLC’s JAZZ acquisition of GW Pharma GWPH in May.

Regulatory Updates

This week:

Colorado’s Governor Signed A New Law With Stricter Rules For Doctors Recommending Medical Cannabis
Rhode Island Cannabis Workers Went On Strike After A Union Organizer Was Unjustly Fired
Pennsylvania Senate Rejected A Medical Cannabis Home Growing Amendment
Delaware Cannabis Legalization Must Wait Until Next Year
South Dakota’s Supreme Court Won’t Decide If Recreational Cannabis Use Law Is Unconstitutional Until After July 1
North Carolina: Medical Marijuana Wins Nearly Unanimous Approval In GOP-Controlled General Assembly

All the details in this article.

In addition, new cannabis laws went into effect in several states, from Connecticut and South Dakota to Virginia, New Mexico and North Carolina.

Financings And M&A

Glass House Group completed its business combination with Mercer Park, creating the largest cannabis brand-building platform in California and setting the stage for interstate commerce when the walls come down.

Glass House trades on the NEO Exchange under the symbols (GLAS.A.U) and (GLAS.WT.U).

“We are incredibly excited to announce the completion of our business combination with Mercer Park. By leveraging our leadership in the California market, we are exceptionally well-positioned to capitalize on the growing statewide and national consumer packaged goods opportunity. We will continue to introduce high-quality, sustainably grown, craft cannabis to the market to support the health and enjoyment of our consumers, as well as our environment and our community,” Kyle Kazan, Glass House chairman and CEO, told Benzinga.

Columbia Care Inc. CCHW CCHW CCHWF (FSE:3LP) raised $74.5 million through a private placement offering of 6% secured convertible notes.

The company also completed the purchase of Ohio-based CannaAcend, acquiring four dispensaries located in Logan, Marietta, Dayton and Monroe.

Kadenwood raised $50 million in a Series B funding round led by The Craftory and Arcadian Capital Management as well as currently involved investors.

Vertical Wellness and hemp products and services provider CanaFarma Hemp Products Corp. CNFA CNFHF are merging to create an industry leader, which will be valued at more than $50 million.

Hexo Corp HEXO (NYSE: HEXO) completed its previously announced acquisition of a Colorado-based production facility for an undisclosed price, marking its first in the US.

Nabis completed a $23 million Series B funding round Thursday, includig FJ Labs, Artemis Growth Partners, Silverleaf Venture Partners, Liquid 2 Ventures and Stanley Tang (Co-Founder, DoorDash).

SLANG Worldwide Inc. SLNG SLGWF is on its way to a merger with Vermont's High Fidelity, Inc. SLANG will pay $12 million by issuing some 31,578,947 of its restricted voting shares at 38 cents per share and $3 million in cash at the closing.

In addition, SLANG agreed to pay an additional $250,000 through the issuance of 657,894 of its shares at the set price and $2 million in cash in 18 months following the finalization of the merger.

Trulieve Cannabis Corp. TRUL TCNNF purchased a Worcester-based dispensary from Nature's Remedy of Massachusetts, Inc., for $13.5 million, boosting its footprint to two shops in the Bay State.

TPCO Holding Corp. GRAM (OTCQX: GRAMF), which does business as The Parent Company, will buy the West Hollywood-based dispensary for $11.5 million.

Schwazze SHWZ is purchasing BG3 Investments, LLC, which is doing business as Drift and operates two marijuana retail stores in Boulder, Colorado. Under the $3.5 million deal, the Denver-based company, previously known as Medicine Man Technologies Inc, is also acquiring the assets of Black Box Licensing, LLC, which includes particular intellectual property.

Green Thumb Industries Inc. GTII GTBIF closed the acquisition of Virginia-based Dharma Pharmaceuticals LLC.

Earnings Reports

Flower One Holdings Inc. FONE FLOOF (FSE: F11) posted a 53% year-over-year increase in revenue, reaching $13.9 million in the first quarter of 2021 and a second-quarter 2021 preliminary unaudited revenue guidance of $16-$18 million.

Cannara Biotech Inc. LOVE LOVFF 8CB expects to generate roughly $7.1 million in the third quarter of 2021. That's a $5.1 million revenue growth compared to the prior period.

Heritage Cannabis Holdings Corp. CANN HERTF reported financial results Monday for the second quarter and six-month period ending April 30. Revenue totaled CA$4.6 million ($3.73 million) in the second quarter, representing a sequential and year-over-year increase of 251% and 338%, respectively.

High Tide Inc. (NASDAQ: HITI) HITI reported its financial results for the second quarter of fiscal 2021 with revenue of CA$40.9 million ($33.12 million), up by 99% quarter over quarter. The quarterly results include the merger with META Growth Corp. in an all-stock transaction and the acquisition of Smoke Cartel, Inc. for $8 million.

WeedMD Inc. WMD WDDMF 4WE saw gross revenue climb to CA$12.9 million ($10.46 million) in the first quarter of 2021 - a 7% spike compared to what the Toronto, Canada-based company disclosed in its previous guidance for the period.

SpeakEasy Cannabis Club Ltd. EASY (Frankfurt:39H) generated $1.65 million in revenue from the sale of flower, extracts and services over the nine months ended April 30. That's a growth of 100% over the comparable period last year.

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

Latin America

Khiron Life Sciences Corp. KHRN (OTCQX: KHRNF) received a quota to export over 700 kg of high-THC extract to Mexico.

Leveraging the company's designation in Colombia as a National Strategic Project, Khiron Colombia SAS obtained permission to include Mexico as a destination country within its international export quota.

International Cannabis Corporation (ICC), will stop producing recreational marijuana for the Uruguayan market, having allowed its contract with Uruguay’s Institute for the Regulation and Control of Cannabis (IRCCA) to lapse without signing a new one.

ICC Labs, founded by Uruguayan businessman-turned-politician Sen. Juan Sartori, was bought by Aurora Cannabis ACB for C$290 million ($220 million) in 2018. While ICC produces nearly half of the cannabis sold in pharmacies in Uruguay, many consumers turn to legal grow “clubs” for better quality, since the cannabis offered in pharmacies is often not very potent.

Europe

As Curaleaf International's subsidiary Adven GmbH seeks to advance its medical cannabis products in Germany, it has teamed up with an Italian pharmaceutical company, Zambon Spa, with whom it will provide medical cannabis treatments for patients, with an initial focus on neurological therapies.

Based in London, Curaleaf said Tuesday the first treatment will be launched in Germany in the months to come. The company's CEO, Antonio Costanzo said he is delighted to team up with Zambon. He called the deal "the first European pharmaceutical and medical cannabis partnership."

Other News

Clever Leaves Holdings Inc. (NASDAQ: CLVR) announced the launch of its U.S.-focused research initiative, Project Change Lives, under which the company will contribute up to $25 million in retail value of medical cannabis products to any eligible U.S. organization to help advance scientific research into the potential medical benefits of cannabinoids.

National cannabis law firm Vicente Sederberg LLP is launching an Impact & ESG practice aimed at helping the cannabis industry become a leader in sustainability, corporate social responsibility, and diversity, equity, and inclusion. Adopting ESG practices and measuring their impacts is growing in popularity across all sectors, as investors, consumers, and workers are increasingly focusing on companies’ social and environmental impacts. Countries across Europe already require reporting of non-financial ESG metrics in their disclosures of material risks to investors, and the SEC is poised to adopt similar regulatory requirements for U.S. companies.

“The cannabis industry is still in its early stages, giving companies a unique opportunity to prioritize ESG and implement good practices right from the start. With legalization laws being developed and implemented across the country, the cannabis industry is under a microscope, putting a lot of pressure on businesses to do better on social and environmental issues,” said Marc Ross, counsel and head of impact & ESG at Vicente Sederberg.

Greenway Greenhouse Cannabis Corporation announced significant steps toward listing on the CSE, filing a preliminary prospectus and initial application.

“Greenway represents the next step in a lifetime of agricultural experience and innovation. We've been bringing fresh produce to consumers across North America for years and we're excited to leverage our greenhouse expertise with this legal crop of cannabis,” said Jamie D'Alimonte, CEO and co-chair of Greenway.

Eybna announced partnerships with three brands, Old Pal, Creed n C and Lemon Tree, to introduce new products that maximize the cannabis sensory experience by using Eybna’s proprietary, data-driven terpene formulations.

Executive Moves

Find out all about the latest executive moves at:

Plus Products, THC Farmaceuticals, Kanabo Group, Surna, Albert Labs

Ghost Drops, Virtual Medical International, Hemp Meds, Avicanna, Silver Therapeutics, Ayr Wellness

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