Updated at market close:
Companies jumping into the medical marijuana field to take advantage of new licensing plans by Health Canada – and intense investor interest – have taken a bath Monday after a Canadian federal judge allowed home-based hemp growers to keep their grow ops.. for now.
Thelon Capital (
TSX:V.THC,
Stock Forum) was among the hardest hit by 2:30 pm eastern, dropping 22.5% on 4m volume, though it remains up 1150% since February and clawed back a lot of those losses to end the day down 12.9%.
88 Capital Corp (
TSX:V.EEC,
Stock Forum) also took a slap, down 28.5% on moderate volume early befoeending down 14.2%, while Ansell Capital Corp (
TSX:V.ACP,
Stock Forum) dropped 22%.
Satori Resources (
TSX:V.BUD,
Stock Forum), generally regarded as a bellwether of the speculative junior ganja sector, fell 20% on 2.3m+ volume.
At the heart of the controversy is a Health Canada ruling that formerly licensed ‘personal’ growers, of which there are around 40,000 in Canada, should stop growing marijuana and destroy their existing crops - by tearing them up, putting the leaves in a blender with water, and pouring the concoction into kitty litter before tossing it in the trash.
Health Canada also pledged to report to the police any grower that didn’t demonstrate that they had followed the order to destroy their operation.
Home growers say commercial operators aren’t yet up and running in large enough numbers to fulfill the demand, and that medical users require special strains that help them with debilitating illnesses, which are unlikely to be commercially available. This has been the basis of the court action, and a judge saw enough merit in the claims to stay Health Canada’s deadline to destroy.
That news led Enertopia (
CSE:C.TOP,
Stock Forum) to
release a statement, saying, “The injunction exempts existing patients currently licensed to possess and grow medical marijuana, from compliance with the new Health Canada regulations for commercial growers that will continue to take effect for those commercial growers, on April 1.”
It went on to explain, “The injunction does not affect the new licensing system. The injunction is temporary - for the existing patients, it preserves the status quo only until a legal ruling is produced in their legal case with the government of Canada. News reports suggest that legal case is expected to provide a ruling within one year.”
As for how the situation will affect Enertopia, “Under this ruling, the company expects its partially-owned partners, The World of Marijuana Productions and The Green Canvas, will be allowed to continue to grow for their patients as WMP prepares for the Health Canada site inspection under the new Marijuana for Medical Purposes Regulations and GC upgrades their facilities to meet with the new MMPR system.”
Abbatis Bioceuticals (
CSE:C.ATT,
Stock Forum) sees blue skies in the ruling, as it has existing licenses in play. "It looks like Canada now has two systems operating at a Federal level. This is a best case scenario for Abattis as we had the foresight and good fortune to structure our business in a way that capitalizes on both this new ruling and the MMPR." stated Mike Withrow, CEO of Abattis in a news release. "Abattis was designed to be one of the only companies that can operate across multiple business lines in several international markets and now we can start legally growing in Canada earlier than expected. We have some of the top analysts working with us to ensure safety, consistency and innovation in all of our products."
The star of the day, amid the chaos, was Modern Mobility Aids (
OBB:MDRM,
Stock Forum), which jumped 36.3% on 5m+ volume amid sentiment that 420 money would be safer in the US for a while. Also benefitting from that thinking was Naturally Splendid Enterprises (
TSX:V.NSP,
Stock Forum), which rose 22.9% on solid 1m+ volume on a tight float.
In other MMJ news, Supreme Pharmaceuticals (
TSX:V.SL,
Stock Forum) has been halted in expectation of news. The company had already released information Monday morning that they have
acquired an option to purchase a medical marijuana facility, which presumably will be taken up should the seller acquire a Canadian license under the new system. The halt remained through to the close of trading.
Elsewhere, Terra Firma Resources (
TSX:V.TFR,
Stock Forum) has announced it has
recruited medical marijuana cultivation expert Alex Vu as a consultant. Vu is VP at CanCanna Inc, which is “currently in the final stages of obtaining their Marihuana for Medical Proposed Regulations (MMPR) license.” V.TFR jumped 14.2% on the news before falling back to level after profit-taking. It has more than doubled since last week.
Next Gen Metals (
CSE:C.N,
Stock Forum) released a
corporate update Monday morning in which it hinted that it has “received an overwhelming response for its first conference to be held in Vancouver, BC on May 7, 2014 at the Vancouver Convention and Exhibition Centre.” Stock in the company dropped 19.3% despite the news, but is up 450% since it listed in late February.
In short:
* Growlife and RXNB extend the closing date on their strategic partnership
* Arris announces a
name change and change of business, officially joining the MMJ game. It will be known as Global Hemp Group and have the ticker symbol C.GHG. Charles Larsen, CEO says, "This name change is aligned with our global vision of bringing the many facets of the Global Hemp Industry under our umbrella. As the Global Hemp business expands, investors worldwide are looking at many companies in this sector, and as a fully reporting company that is trading on multiple international exchanges in the Hemp business, we are pleased to provide a high level of transparency in all of our business activities."
*Affinor Resources flew up 240% today on no news, something we normally wouldn’t pay much attention to but…(sniff sniff)
do you smell something?
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