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Pot Stocks, ETFs, Top News And Data From The Cannabis Industry This Week

AXIM, T.BMO, T.CM, DBI, SMG, T.WEED | January 11, 2019

After a slow first week of the year, 2019 is quickly picking up steam. This week, we learned that Rep. Earl Blumenauer (D-OR) filed a bill in Congress that seeks to remove cannabis from the federal Controlled Substances Act. The bill is dubbed H.R. 420.

In other political news, Marijuana Moment reported that six red states have already seen marijuana legalization bills filed, Rep. Alexandria Ocasio-Cortez (D-NY) hired Dan Riffle, former director of federal policy for the Marijuana Policy Project, as her senior counsel and policy advisor. Sen. Kamala Harris (D-CA) called for the end of the War on Drugs and the legalization of marijuana.

Marijuana Moment publisher Tom Angell told Benzinga: “The year has barely just begun and we’re already seeing lawmakers from both parties, at the federal and state levels, filing a large number of thoughtful marijuana reform proposals. 2019 is shaping up to be the busiest year yet for cannabis legislation.”

In the capital markets, the dominant news came in the form of earnings reports from Aphria Inc (NYSE: APHA) and KushCo Holdings Inc (OTC: KSHB); a lawsuit against MedMen Enterprises Inc. (OTC: MMNFF); and a CBD products distribution deal between Green Growth Brands Inc (OTC: GGBXF) and shoe retailer DSW Inc. (NYSE: DSW).

Despite the earnings reports and legal news, the biggest news of the week from Green Market Report CEO Debra Borchardt's perspective is DSW's CBD venture.

“A mainstream shoe warehouse selling CBD products? I'm not surprised because on one hand many of the executives from Green Growth Brands (the provider of the CBD products) used to work at DSW; but it seems like a real stretch. On the other hand, we just have to adjust ourselves to thinking of cannabis as a mainstream product and no longer an outsider product.”

Green Growth Brands CEO Peter Horvath also spoke with Benzinga on Friday.

“We are excited to be the first company to fulfill an order with a breadth of personal care and beauty SKUs [stock keeping units] to a national retailer,” he said. “Our initial test had 23 SKUs; the results were amazing. We are now bringing 29 SKUs, including new products, in this launch to 96 stores. We are constantly developing new products and are looking forward to making them accessible to consumers throughout the U.S. through DSW, our kiosks and online.”

Make sure to check out Benzinga’s list of “20 Women Set To Dominate The International Cannabis Space In 2019.” Find out why Dr. Raquel Peyraube, Giadha Aguirre de Carcer, Jessica Billingsley, Tahira Rehmatullah, Sara Gullickson, Beth Stavola, Emily Paxhia, Mara Gordon, Cynthia Salarizadeh, Debra Borchardt, Jessica VerSteeg, Dr. Chanda Macias, Jodie Emery, Dr. Cristina Sanchez, Shaleen Title, Karson Humiston, Amy Margolis, Wendy Robbins, Karen Paull, Danielle Russell, and Samantha Watt deserve this honor.

Marijuana Indexes & ETFs

Over the last five trading days, the United States Marijuana Index, which tracks most of the largest marijuana stocks in the U.S., gained 5.8 percent, while the North American Marijuana Index, which also includes Canadian stocks, rose approximately 10.5 percent.

Over the same period, the Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) (TSE:HMMJ) gained 18 percent, while the ETFMG Alternative Harvest ETF (NYSE: MJ) rose roughly 12.8 percent. The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period up 2.5 percent.

Stock Moves

The top marijuana stocks (market cap above $300 million) in U.S. exchanges and how the performed over the last five trading days:

Acreage Holdings (OTC: ACRZF): down 2.4 percent
Aphria Inc (NYSE: APHA): up 13.2 percent
Aurora Cannabis Inc (NYSE: ACB): up 22.6 percent
CannTrust Holdings Inc (OTC: CNTTF): up 13.8 percent
Canopy Growth Corp (NYSE: CGC): up 35.5 percent
Cronos Group Inc. (NASDAQ: CRON): up 15.6 percent
Curaleaf Holdings Inc (OTC: CURLF): up 7.5 percent
Green Organic Dutchman Holdings Ltd (OTC: TGODF): up 15.9 percent
Green Thumb Industries Inc (OTC: GTBIF): up 16.9 percent
GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH): up 14.5 percent
Hexo Corp (OTC: HYYDF): up 10.2 percent
iAnthus Capital Holdings Inc (OTC: ITHUF): up 0.8 percent
Marimed Inc (OTC: MRMD): down 3.7 percent
MedMen Enterprises Inc. (OTC: MMNFF): down 5.2 percent
OrganiGram Holdings Inc (OTC: OGRMF): up 11.2 percent
Scotts Miracle-Gro Co (NYSE: SMG): up 5.2 percent
Tilray Inc (NASDAQ: TLRY): up 37.3 percent

In Other News

Canopy Rivers Inc (OTC: CNPOF), the venture arm of Canopy Growth, announced the closure of a $60.5-million bank debt facility for its 49-percent joint venture PharmHouse Inc. The syndicated credit facility was led by Bank of Montreal (NYSE: BMO) with Canadian Imperial Bank of Commerce (NYSE: CM) and Concentra Bank as lenders.

The credit facility will be used to finalize the acquisition of a 1.3-million-square-foot ultramodern greenhouse facility and convert its operations for cannabis growth. The facility represents the first stage of a planned global strategic relationship between Canopy Rivers and its partner PharmHouse, the leading principals and operators of a North American greenhouse produce conglomerate, to pursue regulated cannabis opportunities together on a global scale.

“This announcement is significant for the cannabis industry in several ways. First, it is the largest debt financing provided to a private company to date in the industry. Second, it is supported by a syndicate of three Schedule 1 banks, which is a further indication of the growing legitimacy of this industry as cannabis moves into the mainstream. And finally, it strongly positions the PharmHouse platform to fulfill a growing demand for cannabis today, and into the future as economic activity and regulatory reform continues in North America and new jurisdictions globally,” said Canopy Rivers Chairman and CEO Bruce Linton.

Leafbuyer Technologies Inc. (OTC: LBUY) announced its rollout of a cannabis industry blockchain solution: the Leafbuyer Wallet. This is the company’s first of several steps to introduce dispensaries, product companies and cannabis consumers to a comprehensive blockchain platform. The launch opens new revenue streams for Leafbuyer and aids in the company’s goal to maintain transparency with its customers and consumers.

“Our Dec. 20 rollout is just the beginning of Leafbuyer's plans for blockchain. It lays the groundwork for us to expand our product offerings and opens up dozens of new revenue possibilities,” Leafbuyer CEO Kurt Rossner told Benzinga. “Our teams are working hard to make sure all dispensaries in legal markets understand their options and have access to this revolutionary blockchain solution.”

Green Thumb Industries signed a definitive agreement to acquire Advanced Grow Labs LLC and enter the Connecticut market. AGL is one of only four companies in Connecticut licensed to grow and process cannabis, and operates a 41,000-square-foot manufacturing facility in West Haven. In addition, AGL has a 46-percent ownership of a recently awarded dispensary that will be located in Westport, which makes it the only vertically licensed company in the state.

GTI also won a processing license in Ohio this week, allowing the company to produce and distribute its brands in the state, including its five stores that are now in the build-out phase.

GTI founder and CEO Ben Kovler told Benzinga: “As we evaluate M&A opportunities in the cannabis space, creating shareholder value over the long-term is GTI’s top priority. The Advanced Grow Labs acquisition has attractive multiples, is accretive and provides us entry into the high-growth, limited license state of Connecticut, solidifying our position in the tri-state area," he said.

"The people behind these partnerships are also of paramount importance to us — the AGL management team is a great cultural fit and their mission to enhance wellness with access to quality cannabis products mirrors that of GTI.”

The Shoppers Drug Mart division of Loblaw Companies Ltd (OTC: LBLCF) — Canada's biggest pharmacy, with 1,300 stores — announced the opening of its online medical cannabis store. Some industry observers see the move as a significant endorsement and move to the mainstream for medical cannabis as it joins Shoppers' OTC and prescription drug offerings.

Also announced: a partnership between Canadian LP The Flowr Corporation (OTC: FLWPF) and Shoppers. Flowr will offer its medical cannabis line exclusively through Shoppers and is turning over its medical sales channel to Shoppers.

Flowr co-CEO Tom Flow told Benzinga: “This gives us the opportunity to rapidly scale our medical business, which we had been doing direct through our website, given Shopper's large existing customer base and marketing capabilities. And it gives Shoppers' customers a premium, non-irradiated option for their medical needs.”

Weekend Unlimited Inc. (OTC: WKULF) closed its acquisition of the remaining 20 percent of California’s Canna Candys and Canna Medibles. According to Weekend Unlimited CEO Paul Chu, Canna Candys is a developed brand with approximately 35 percent of hard candy market share in Southern California. The company is in the final steps of kicking off operations from a newly licensed facility in Adelanto, California, providing capacity for growth in product development and manufacturing.

“The operations team is experienced, having built distribution in Southern California to 380 retail stores, and are expecting additional sales growth this year,” Chu said.

Data and analytics firm Headset closed its Series A financing round, having raised $12.1 million from a group led by Poseidon Asset Management and AFI Capital Partners. The company added Emily Paxhia and Nico Richardson to its board of directors.

“With our Series A, Headset will be able to further capitalize on the rapidly growing demand for data and analytics on the cannabis industry,” CEO and co-founder Cy Scott told Benzinga. "The capital will help us fuel our growth not only in the U.S., but internationally as well."

Cannabinoid R&D company AXIM Biotechnologies Inc (OTC: AXIM) announced the appointment of John W. Huemoeller II as its new CEO. “I am honored to take on this role within such an industry-leading organization and plan to propel the company forward in its mission of bringing novel cannabinoid-based therapeutics to worldwide health care markets,” he said.

Cannabis industry cashless payment system solution CannaTrac announced the release of its CannaCard App. “We are excited to announce the official release of the CannaCard App,” said CEO Thomas Gavin IV. “We aim to serve the cannabis industry as the go-to cashless payment solution, as we promote safety by removing cash from the equation and provide consumers with an easy way to support their favorite retailers.”

Braingrid Limited, which provides sensor platforms for precision agriculture, announced that its latest technology platform, the Sentroller S, has been selected by WeedMD, one of the top 10 largest cannabis cultivators in Canada, to be deployed in the company's Ontario cultivation facilities.

“As competition continues to grow in the cannabis market, technology solutions like the Sentroller S have become a critical tool for cultivators to reduce costs, improve their yields, and manage their crops more effectively,” said Braingrid founder and CEO Michael Kadonoff. “The Sentroller S stands apart from other solutions in that it is self-powered by almost any lighting source, allowing cultivators to place it almost anywhere under any conditions. We're thrilled that a cultivator as innovative as WeedMD has selected us for their state-of-the-art facility.”

California-based distribution firm MJIC announced an agreement with investment bank Haywood Securities to help identify a Canadian shell company that will allow the former to trade on the Canadian Securities Exchange via a reserve takeover.

“As MJIC continues to build out a fully compliant cannabis infrastructure across California, Haywood will be an instrumental partner in accessing the public capital markets and procuring the strategic resources that we will need to replicate our disruptive distribution and retail model throughout the rest of North America,” said MJIC CEO Sturges Karban. Haywood will also assist MJIC in raising capital and identifying investment opportunities.

Nutritional High International Inc (OTC: SPLIF), has begun the process of re-launching the Marley Naturals Brand in both the Washington and Oregon markets. In addition to Marley Natural, the license agreement grants Nutritional High the rights to produce, market and sell additional inhalable cannabis product lines including Dutchy, Headlight, Irisa, Grail and Martian Gardens.

“We’re excited about driving the relationship forward and making a substantial impact in both markets with the Marley Naturals brand. Nutritional High is poised and ready to maximize this opportunity and continue to develop shareholder value," Nutritional High CEO Jim Frazier told Benzinga.

"This along with a number of other premium brands that we are in the process of acquiring is in line with our corporate vision of developing and delivering products that customers desire and want to better their quality of life.”

Functional Remedies, the producers of hand-pressed, full-spectrum hemp oil products, announced details of their endorsement deal with pro golfer Scott McCarron to become a brand ambassador. McCarron is the first-ever pro golfer to partner with a hemp oil company. McCarron is a three-time PGA Tour and eight-time PGA Tour Champions winner. McCarron and over 25 other PGA players use the product, according to Functional Remedies.

“Scott McCarron has been a long-time user of our hemp oil, and we are excited that he has joined the Functional Remedies team as an official ambassador to represent us in the PGA Tour Champions. This is a big step forward for further mainstream acceptance of hemp oil as a beneficial product," said Fuctional Remedies CMO Tony Tomassini.

Chemesis International Inc. (OTC: CADMF) announced the completion of its acquisition of Colombia's La Finca Interacviva-Arachna Med SAS, an integrated cannabis company with CAD $2.3 million ($1.7 million) in working capital on hand.

“With the completion of this acquisition, Chemesis will significantly increase its footprint in Latin America,” CEO Edgar Montero said in a press release.

“The company believes its exposure in Latin America will not only provide access to more opportunities in the region, but internationally as well. La Finca is ramping up as planned and has submitted all necessary documents to the Ministry of Justice to expand its cultivation area to 1,060 acres.”

Find out more about this news and more with our friends at Marijuana Money, who make a weekly video summary of the top financial and business news in the cannabis industry.

Interesting Data & Information

Communications agency Grasslands is working pro bono with Denver officials to spread the word about Turn Over a New Leaf, a new program that allows residents who have been convicted of low-level marijuana offenses to request to have their criminal records expunged. Thousands of Denver residents were convicted of minor marijuana offenses before 2013, the year Colorado’s historic legalization went into effect.

“When societal norms and laws change, we can’t just leave the past behind,” said Grasslands founder and CEO Ricardo Baca. “For the thousands of Denverites who have a pre-2013 cannabis conviction for doing something that is legally permitted today, they should be able to clear their record and receive help with what can be a complex process. We want to help ensure anybody who’s eligible knows about Denver’s Turn Over a New Leaf program.”

Denver joins San Francisco, Seattle and some other cities in the growing movement to vacate pre-legalization marijuana convictions. The city of Denver partnered with the Denver District Attorney’s office to create the program.

“At Grasslands, we feel strongly that all of us who work in the cannabis industry must take active measures to restore equity and justice for communities deeply affected by the War on Drugs, and we appreciate what Denver officials are doing to help make things right,” Baca said.

According to the BDS Analytics Cannabis Retail Price Index, cannabis sales in the five largest U.S. legal markets through the end of November revealed that prices rose slightly over 2018. Legal cannabis sales at dispensaries across Arizona, California, Colorado, Oregon, and Washington reached a combined $538.7 million in November, according to BDS Analytics. Through November, the combined year-to-date sales across the states totaled $5.7 billion.

Despite continued falling prices for flower across most states, all other major product categories experienced increased prices compared to October, the report noted. Edibles, pre-rolled joints and topicals saw average retail prices rise by at least 8 percent compared to prices at the beginning of the year.

More From Benzinga’s Cannabis Newsdesk

Over the week, Benzinga also reported on:

Tilray's High Park receiving a cannabis processing license and Privateer Holdings’ announcement about remaining invested in the company.

New Frontier Data’s look back at 2018 for the cannabis industry.

Northland’s increased price target for New Age Beverages Corporation (NASDAQ: NBEV).

Aphria’s below-consensus revenue guidance.

Exclusive experts’ reactions to the legalization of hemp in the U.S.

And more!

Events Calendar

Jan. 12: Svn Space is launching its newest pop-up at Prism Boutique in Long Beach, California. The weekend-long, shop-and-learn pop-up will educate consumers on all things cannabis, with an emphasis on hemp.

“Our mission with the ‘Svn Space CBD + Hemp Pop-Up’ concept is to show the breadth of the hemp plant from fashion to wellness. We've carefully curated close to 40 premium brands, screening on behalf of the consumer with regards to transparency and efficacy," Svn Space co-founder Grace Saari told Benzinga.

Jan. 15-16: Benzinga will host its second Cannabis Capital Conference, this time on Miami Beach, Florida. This networking event for institutional capital and the leading cannabis companies will feature company presentations, panels and keynotes by Giadha Aguirre de Carcer, Danny Moses, Tim Seymour, Jon Najarian, Alan Brochstein and many others. Find tickets here.

Feb. 19: Accelerate Cannabis is an educational and networking event for anyone interested in cannabis to learn about the New Jersey market and meet peers from around the country. It also presents an opportunity for representatives of the nation’s top cannabis firms and brands interested in breaking into New Jersey. Hear from data scientists, application consultants, local government experts, ancillary business owners and cannabis brand leaders as they discuss how New Jersey is prepared for adult-use legislation and the expansion of the medical program.

Feb. 27-March 1: The 5th Annual Emerald Conference will be held at Loews Coronado Bay Resort in San Diego. The conference brings together top scientists, extraction and cultivation professionals and visionary business leaders in a collaborative environment that fosters groundbreaking advancements.

May 28-June 1: The Cons is a gathering of three trade and fan shows — the Cam Con, the Cannabis Con and the Inked Con — all under one roof at the SLS South Beach Hotel in Miami Beach. The Cons 2019 will offer a variety of seminars with top industry panelist, networking parties and performance displays to benefit the industry’s content providers, models and affiliates. While these industries have differences, in many ways they overlap. All three shows are model-driven because they are the true industry ambassadors, which is the core value of The Cons.

Picture by Javier Hasse.

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