Some Update from Past Week Cannabis stocks declined sharply, falling for the fourth consecutive week. The Barron's cover story on Canadian LPs influenced the negativity, though the market bounced sharply on Wednesday.
The chill of the Sessions Memo persists, with the Bank of Springfield, the main bank for the Illinois cannabis industry, announcing it will stop serving the industry as of May 21. Connecticut’s House Appropriations Committee approved a bill for cannabis legalization, potentially leading to a vote later this year.
The Barron's cover story discussing the potential for excess supply in Canada and overly high valuations sparked heavy selling of LPs.
A few (unelected) Canadian Senators from the Conservative party continue to campaign against C-45, including traveling to Washington, D.C. to meet with Jeff Sessions.
ACBFF will become a preferred supplier to Pharmasave, a leading Canadian independent pharmacy, through CanniMed once Health Canada rules change
CNNRF reported its Q4, with sales exceeding C$1 million but a loss from operations of C$4.5 million
CVSI continued to pay down its convertible debt, with the balance at now just $225K
GBLX announced progress on its relationship with the University of Seville to develop cannabinoid-based nanoparticles for sustained relief from neuropathic pain
GRWG announced a proprietary nutrients and additives effort with Alliance Biologics
MEDFF announced its third brand for adult-use, AltaVie, targeting the premium health and wellness market
MPXEF reported an increase in Arizona sales in its Q4 ending 3/31 to C$5.2 million
NXTTF announced a large-scale observational study for cannabis use to treat anxiety. It also announced an LOI to acquire a Licensed Dealer application and reported March sales of C$1.24 million with strong patient acquisition on its NamasteMD Platform.
SLTK reported its 10-K, with sales falling 17% in Q4
SRNA filed its 10-K, with sales growth at 47% and net bookings growing 26% from Q3
TWMJF added LiveWell as a partner for Canopy Rivers and for Tweed Main Street.
Outlook
The cannabis sector is seeing improving quality due to new entrants and some of the older names executing. Valuations generally remain cautionary, and fundamentals are questionable for most of the over 600 companies in the sector.
The market has been in bull mode since late October and remains healthy despite the "Sessions Storm" that hit on January 4th. There are some catalysts ahead, including progress in the Canadian legalization and in German MMJ as well as the roll-out of the California implementation and Massachusetts in July. The demise of the Cole Memo has left a big overhang in the U.S. market.
The big themes ahead are likely to be insight into the President's plans regarding the federal view on state-legal cannabis (especially in light of the Jeff Sessions Memo from January 4th), hopeful extension later this year of the Rohrabacher-Blumenauer Amendment in the House and the Leahy Amendment in the Senate (which are now set to sunset on September 30th) to insulate state-legal medical cannabis businesses from DOJ intervention, better clarity from the federal government for banks and cannabis research (both part of the proposed CARERS Act and other proposed legislation), DEA pushback towards the CBD from industrial hemp industry, the inclusion of a broader range of extracts in Health Canada's ACMPR program and its continued growth in patient enrollment, likely legalization in Canada, the rollout of MMJ in Denmark, Germany, Mexico and in Australia as well as continued advances in South America, progress with respect to the new legal cannabis implementations in CA and MA, and the new MMJ implementations in Arkansas, Florida, Maryland, Ohio, Pennsylvania and Texas, the implementation of the new medical program in California and the possible legalization via the legislatures in CT, NH, NJ, NM, and RI and implementation of potential commercial programs in ME and VT.
Here are some of the most interesting stories: