No Fluff .. No Nonense Here! Week past review! Summary
Cannabis stocks snapped a 4-week losing streak with a massive rally.
President Trump is apparently rejecting the policies espoused by AG Jeff Sessions and has indicated support for states rights with respect to regulating cannabis.
This was perhaps the most important news yet that "Buckshot" has seen in five years of following the U.S. cannabis industry. Filled with very important news on the federal front, and it's hard to imagine that it is entirely coincidental.
While it wasn't exactly news, as this had been hinted in March, Senate Majority Leader Mitch McConnell introduced historic bipartisan legislation to legalize industrial hemp with the Hemp Farming Act of 2018.
This followed news that former House Speaker John Boehner, along with former Massachusetts Governor William Weld, has joined the Board of Advisors of multi-state cannabis operator Acreage Holdings (formerly High Street Capital, and heading to the public markets in Canada).
The former cannabis opponent's support caught a lot of attention, and one has to wonder if it influenced the Trump Administration, which appears to be rejecting the input of AG Jeff Sessions and agreeing to support states rights with respect to the regulation of cannabis.
Continuing a string of favorable developments, the FDA is seeking public input regarding rescheduling cannabis to be shared with the World Health Organization. It was also interesting to see HP allow cannabis compliance company Flowhub to use its name in a press release regarding its hardware being part of a solutions offering. Several private ancillary cannabis companies announced successful capital raises. Finally, it appears that Maine is moving forward on a commercial program, as the House and Senate approved legislation. Maine voters approved adult-access in 2016.
In Canada, Health Canada added two new license holders and granted additional licenses to Canopy Growth and Tilray. Quebec finalized its supply agreements with six LPs. Finally, coffee chain Second Cup jumped into the retail cannabis fray, partnering with National Access Cannabis in Manitoba and potentially other Western provinces.
Here are some of this week's highlights for Focus List names:
ACBFF laid out the time-line for finalizing the remaining CanniMed shares (4.1%) and also announced that it had shipped its first cannabis to Italy. If finalized its Quebec supply agreement at 5 million grams per year.
APHQF finalized its Quebec supply agreement at 12 million grams per year
CNNRF closed its recent financing at C$4.00 and also cancelled its warrant incentive program
GBLX announced that shareholders approved a boost in the authorized shares from 250 million to 400 million and indicated that it is doing a "Phase 0" trial on its cannabis mixtures to treat Parkinson's
IIPR purchased and leased back Vireo Health's Pennsylvania facility, the third deal with that operator
KSHB entered an adjacent market with a pending acquisition of Summit Innovations, a supplier of gases to extraction labs, and reported a quarter with higher-than-expected sales that exceeded $10 million but lower margins and an operating loss and a $4.5 million use of cash to fund operations.
LHSIF will be opening its second dispensary in Florida, has signed three additional leases and will be launching delivery in Southern Florida
MEDFF finalized its Quebec supply agreement at 8 million grams per year and closed on the purchase of its Ontario greenhouse land and facility.
MPXEF opened its fourth Arizona dispensary and reported progress in its project to dramatically expand its concentrates output capacity
NXTTF amended its LOI with what will now be known as Infinite Labz, which will be applying for an ACMPR license to produce and sell oils. It also replaced its Chairman due to health reasons
TRTC filed suit in a California federal court against several parties mostly named VandeVrede, alleging fraud, breach of contract, breach of fiduciary duty, theft of intellectual property and three other complaints.
TWMJF announced a research collaboration in the UK between Canopy Health Innovations and Beckley Foundation. It also received the cultivation license for its second site in BC. It confirmed its Quebec supply agreement at 12 million grams per year
The Cannabis Stock Index rallied sharply after testing last week's 2018 lows on Tuesday and snapped a four-week losing streak, climbing 12.3% to 112.61. The index is up 4.4% in April.
The index, down 20.8% so far in 2018, was up 91.8% in 2017 after gaining 88.8% in 2016. The index currently includes 68 stocks and ended 2017 at 142.10.
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 had left a big overhang in the U.S. market, but this is now behind and advocate a more aggressive approach for investors with respect to legitimate U.S. companies.
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 apparent deal with Senator Cory Gardner), 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 leg al 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 this week: