Staff, Author at Green Market Report - Page 2 of 43

StaffStaffJune 5, 2019
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9min2200

One of the most interesting and exciting elements to the, now emerging, legalized cannabis trade is how cannabis’ image, its past connotations and all of the potential uses that it has open to it, affects its sales and sales potential. Given that we’re talking about image, we’re really talking about marketing, and how you could creatively market something which was previously not only illegal most places, but actively frowned upon and associated with all sorts of negative concepts and behaviors. It’s a great challenge for any marketing team, so let’s go ahead and look at how to generate effective digital marketing schemes for this product.

  1. The Internet

Digital marketing normally involves it, but I can’t stress enough how important the internet is going to be in terms of the marketing and successful sales campaign for a cannabis company. The reality is that, for the expanding part of the market, meaning the people who are drawn to it now that they can attain it legally, there is still a stigma. The stigma exists with cannabis, regardless of the legislation. Its recreational uses are still tinged with its previous illegality. So, the internet becomes the most appealing way to purchase it. Just in the same way that the sex toy industry thrives online, cannabis purchases thrive most in the discreet anonymity of the online shopping cart.

  1. Using Influencers

Influencers do what it says on the tin: they influence. For people who are curious but not confident enough to push themselves into making a purchase, seeing their favorite YouTuber or Instagram Fitness Coach recommend a product containing cannabis can have an enormously relieving and comforting effect on them. The important thing is picking the right sort of influencer, ideally someone whose image doesn’t align at all with previous stereotypes about cannabis usage. The more relatable they are, the better.

  1. Free Samples

One potentially very useful tool that a cannabis company might have is the idea of free samples. “If the payoff is a new email for the mailing list, increased interest and likelihood of future purchase and maybe even some free marketing amongst the friends of the person in question, then sending a small sample for free to people can be very much worth the small cost it is to your company”, says Rachel Macpherson, digital marketer at EliteAssignmentHelp and StateOfWriting. For some people, taking the leap of actually spending money is a difficult hurdle, so seeing if they like a cannabis product can be the thing to nudge them into purchasing. Of course, check each state and make sure that giving samples is legal. 

  1. Content Marketing

Hearing what people have to say, your company included naturally, about cannabis products can be a great way to persuade people to purchase and to boost your sales. The difficulty is then the content creation itself, which can be tough for anyone. Here are some tools to help with your written content:

Studydemic and AcademAdvisor – Content writing guides, for general tips on creation.

Academized and PaperFellows – Some online editing tools, to make sure you get it right every time.

MyWritingWay and SimpleGrad – Two grammar checkers, for ensuring this tricky element is in order.

AustralianHelp – An online proofreading tool, to help you catch those little mistakes, mentioned here.

WritingPopulist and ViaWriting – Useful for generating titles, subtitles, and keywords.

BigAssignments and OxEssays – A pair of content formatting tools, an increasingly important area to get right in the digital realm.

  1. Packaged Deals

Paraphernalia, previously a dirty word used by police officers to refer to the trappings that go along with cannabis consumption is now one of the most difficult elements of marketing cannabis products. A lot of cannabis products require you to use a variety of other items to complete the consumption of it. In this instance, it’s also an opportunity for an online company to offer deals where all of the related objects come with the major product, something which is most achievable in an online store.

  1. Mobile Interface

Creating an app is a normal step for a lot of different online stores, but for cannabis companies, it’s a particularly good move. It serves not only as a convenient way for users to shop, given the enormous numbers of mobile users, but also as a hub with all the information that users, people who might be unfamiliar and intrepid at the thought of cannabis consumption, can use to reassure themselves and to find out information and connect with the rest of the userbase for advice and help.

Conclusion

As an emerging market which is guaranteed to increase the more that legalization spreads, cannabis marketing is going to become an extremely important and valuable tool. It presents a unique opportunity for some really innovative digital marketing, as well as a unique set of historical challenges to conquer.

Nora Mork is a marketing and business journalist at Boom Essays and PhD writing service. She helps businesses create effective marketing strategies, and writes blogs at Essay Roo.

 


StaffStaffMay 31, 2019
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6min1330

By Lewis Taub, CPA, Director of Tax, Berkowitz Pollack Brant

Despite the legalization of cannabis on a state-by-state basis, federal tax laws continue to limit the availability of certain tax benefits for businesses engaged in cannabis production and sales. Yet, with advance planning and analysis, cannabis companies and their investors have an opportunity to maximize their tax savings while maintaining compliance with federal laws.

Federal Tax Law

Under federal tax laws, most U.S. businesses may deduct from their taxable income the ordinary and necessary expenses they incur to operate their companies, including costs for rent, repairs, interest, depreciation, and employee compensation, and benefits. However, the federal government does not extend this tax-saving benefit to businesses that sell cannabis, which the Controlled Substances Act (CSA) classifies as a schedule I drug that is not approved for medical use in the U.S. This restriction prohibiting cannabis companies from deducting business expenses even extends to those entities located in states that have legalized the sale of cannabis for medical purposes.

There is, however, one significant exception to the disallowance of expense deductions for cannabis businesses.

An Exception for Producers and Resellers

The Internal Revenue Service (IRS) permits “businesses trafficking in controlled substances” to deduct the direct costs of the goods they sell against their income. Cost of goods sold refers to inventory a business purchases to resell to customers and is considered to be an adjustment to income and not an actual deduction.

Cost of goods sold is calculated as 1) the cost of product (inventory) on hand at the beginning of the year, plus 2) the cost of product that was produced or purchased since the beginning of the year, plus 3) direct and indirect production costs, minus 4) the cost of inventory on hand at the end of the year.  

This IRS provision allowing a deduction for costs of goods sold represents a significant tax-savings opportunity for businesses in the cannabis industry, specifically “resellers” that merely buy products to sell to customers and “producers” that control the production of the product to be resold. Yet, the opportunities to deduct expenses as part of costs of goods sold are much more expansive for producers than for resellers.

For example, resellers can include in costs of goods sold the amount they pay for the purchase of the cannabis plus any transportation expenses or other necessary expenditures incurred in acquiring possession of the product. In contrast, the tax laws allow producers to include in costs of goods sold their direct material costs for growing the product, including outlays for plants and seeds; direct labor costs for planting, harvesting and sorting product; and indirect production costs, including rent, repair expenses, employee wages, utilities, and maintenance. Therefore, many of the operating costs that cannabis businesses may not deduct because the federal government considers to be trafficking in controlled substances can now become deductible as costs of goods sold for producers. The deductible amount depends upon the company’s inventory costing system. Typically, indirect costs are allocated based on methodologies that include a standard amount based on a fixed formula. For example, a certain dollar value of indirect costs could be allocated based on a fixed percentage of direct costs.

It is important to recognize that over the past few years, the tax court has sided with the IRS in taking the position that a cannabis business was a reseller and not a producer, thereby reducing the cost of goods sold available for the business to offset its gross sales. This issue may continue to influence the cannabis industry as vertical integration among companies will produce true tax advantages. That is, entities combining through acquisitions will be better able to control the entire process, from production through distribution, and qualify as producers that can deduct the additional cost of goods sold,   

Cannabis businesses face a complicated tax-compliance landscape. Yet, opportunities are available for maximizing business expense deductions and improving tax efficiency when cannabis companies plan early under the guidance of experienced tax professionals.

About the Author: Lewis Taub, CPA, is a director in the New York office of Berkowitz Pollack Brant Advisors and Accountants, where he works with entrepreneurial business, multinational and multi-state corporations on tax planning and compliance strategies. He can be reached at ltaub@bpbcpa.com.


StaffStaffMay 28, 2019
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7min1680

It’s time for your Daily Hit of cannabis financial news for May 28, 2019.

On The Site

Charlotte’s Web

Charlotte’s Web Holdings, Inc. (CSE:CWEB) (OTCQX:CWBHF) reported financial results for the first quarter ended March 31, 2019 with revenue growing 66% to $21.7 million. The net income dropped to $2.3 million from last year’s $3.1 million. The company delivered earnings per share that fell to $0.03 and diluted EPS of $0.02 versus last year’s $0.04.

Operating expenses doubled from last year’s $6.4 million to this year’s $13.2 million. Just a couple of weeks ago the company named Deanie Elsner as the new Chief Executive Officer.

AYR Strategies

Cannabis Strategies Acquisition Corp. which will now be known as AYR Strategies Inc. began trading today on the NEO Exchange in Canada under the symbols NEO: AYR.AAYR.RT and AYR.WT. AYR is the first recreational cannabis-focused company with an enterprise value over a billion dollars to list on NEO.

As part of its qualifying transaction to be listed on the NEO Exchange, CSA acquired five distinct cannabis businesses operating in Nevada and Massachusetts consisting of three cannabis cultivation and production facilities and eight dispensaries.

Acquired Sales

Acquired Sales Corp. (OTC Pink: AQSP) signed a letter of intent to acquire 100%  Illinois-based Warrender Enterprise Inc. also known as Lifted Liquids for approximately $7.5 million in cash, plus 4,545,455 shares of Acquired Sales Corp.’s common stock. Those shares were lately trading at $2.45.

The deal is subject to several conditions including the completion of an acceptable due diligence investigation and audit of Lifted Liquids, completion of a capital raise of at least $9 million by Acquired Sales Corp., execution of definitive acquisition documents, receipt of a tax opinion on the transaction, obtaining all necessary approvals, and the completion of all necessary securities filings.

Bulgaria

Bulgaria has become the first European Union state to officially allow a CBD distribution company to sell openly on the market. Kannaway, a subsidiary of Medical Marijuana Inc, said it has been issued with a Free Sale Certificate to produce hemp-derived CBD products from Bulgaria’s Ministry of Agriculture, Food and Forestry, and the Bulgarian Food Safety Agency.

The products “comply fully with relevant requirements of the Law on Foodstuffs of Republic of Bulgaria and of Regulation (EC) No 852/2004 of European Parliament and the Council on the hygiene of foodstuffs,” according to documentation, and the compliance also extends to exports.

In Other News

HEXO

HEXO Corp  (TSX: HEXO)(NYSE-A: HEXO) and Newstrike Brands Ltd. announced that they completed the previously announced arrangement in which HEXO acquired all of the issued and outstanding common shares of Newstrike by way of a plan of arrangement under the Business Corporations Act (Ontario). Following the Arrangement, HEXO has ownership or control over 558,971,064 common shares in the capital of Newstrike representing 100% of the total issued and outstanding share capital of Newstrike.

MediPharm

MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF) entered into an agreement with Scotiabank, in which the underwriters have agreed to purchase on a bought deal basis 10,815,000 common shares of the company at a price of $5.55 per Share for gross proceeds of $60 million. The company has granted the Underwriters an option to purchase up to an additional 1,622,250 Shares on the same terms and conditions, exercisable at any time, in whole or in part, for a period of 30 days following the closing of the Offering for over-allotment and market stabilization purposes.

MichiCann

MichiCann Medical Inc., operating as Red White & Bloom, has signed an LOI to acquire the world’s largest indoor premium hemp facility, located in Granville, Illinois. In operation since 1978, the greenhouse has been granted its Hemp Grower License and Hemp Processor Registration from the Illinois Department of Agriculture.

FLRish

FLRish Inc. d/b/a/ Harborside, announced that it has closed an approximately C$19.65 million private placement of subscription receipts. AltaCorp Capital Inc. and Foundation Markets Inc. served as co-lead agents on behalf of a syndicate of agents which included Cormark Securities Inc., Beacon Securities Limited and Haywood Securities Inc. (collectively with AltaCorp and FMI, the “Agents”). The net proceeds from the financing, following release from escrow, are expected to be used to provide the Company with general working capital and to support the Company’s initiatives throughout California.


StaffStaffMay 28, 2019
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4min1670

Charlotte’s Web Holdings, Inc. (CSE:CWEB) (OTCQX:CWBHF) reported financial results for the first quarter ended March 31, 2019 with revenue growing 66% to $21.7 million. The net income dropped to $2.3 million from last year’s $3.1 million. The company delivered earnings per share that fell to $0.03 and diluted EPS of $0.02 versus last year’s $0.04. 

Operating expenses doubled from last year’s $6.4 million to this year’s $13.2 million.

Just a couple of weeks ago the company named Deanie Elsner as the new Chief Executive Officer. Elsner is from Kellogg’s where she was President of the $3B dollar U.S. Snacks division – the largest business unit in the Kellogg Global portfolio and prior to that served more than 20 years in various leadership roles at the Kraft Foods Company including Chief Marketing Officer.

“Charlotte’s Web has established itself as the market leader in sales, and more importantly as a trusted brand with an impeccable reputation,” said Ms. Elsner. “As someone with an extensive career in the CPG industry-leading global brands, I see a tremendous opportunity to further influence, shape and grow the CBD category while turning Charlotte’s Web into a household product name that consumers can rely on around the world. My priority is to raise the Company’s level of operational effectiveness and accelerate growth opportunities acting with urgency and decisiveness.”

Looking Ahead

Following the end of the quarter, shipments began to a fourth national retailer and the company has over 6,000 retail locations now receiving shipments of its leading hemp CBD products. The company said that more than 2,300 new retail doors were added since the start of the year – more than all of 2018 – significantly expanding the company’s physical brick and mortar retail reach.

As of May 28, 2019, Charlotte’s Web reported that it is shipping product to four national retailer locations covering 18 states combined. The company said it expects additional states and stores to be added by these retailers throughout 2019. A major grocery retailer is also carrying all categories of Charlotte’s Web product portfolio including oils, capsules and topicals, while the remaining national retailers have begun their Charlotte’s Web product introduction with topical products only.

“We are forecasting revenue to grow at a faster pace than operating expenses, particularly in the back half of the year,” stated Rich Mohr, Chief Financial Officer of Charlotte’s Web. “This supports our adjusted EBITDA guidance in the 30%-35% range on an annualized basis, in line with our historical norms. Our sales volumes continue to increase on a quarterly basis and we’re expecting continued top-line growth during the second quarter and during the last half of the year. We reiterate our revenue guidance for 2019 of between $120 million and $170 million.”

 

 


StaffStaffMay 28, 2019
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6min1560
By David Lechner and Charles S. Alovisetti
Selling a business can be a complicated and life-changing event. The stakes can be even higher when doing deals in the nascent legal cannabis industry.

Last week, we offered our first five tips for cannabis operators who are thinking of selling their businesses. Here are five additional tips, including some that touch on important regulatory issues. Please keep in mind these are just ten of the many considerations you will need to take into account. Selling a cannabis business can be rewarding, but it is a challenging process, so make sure you are prepared.

1. Know your (buyers’) limits. The kind of cannabis business you own, and the state and locality in which you are located, will influence the universe of potential buyers of your business. In Colorado, for example, a public company cannot currently own a licensed business. There is a new law that could change this rule working its way through the legislature that would go into effect on November 1, 2019. This kind of regulatory change can have dramatic effects on valuations and exit opportunities – markets that do not permit direct investments from MSOs (such as Colorado and Washington State) have seen dramatically different M&A landscapes from those where publicly traded companies can own licenses. The recently announced transactions between Cresco Labs and Origin House (USD $820 million) and between Harvest and Verano (USD $850 million), show the drastic differences in scale between MSO driven M&A (largely driven by their ability to use their public stock as currency) and the intrastate deals.

For ancillary businesses, the analysis is much easier. The only real restriction for buyers is their comfort level with violating federal law. To be sure, this does narrow the number of potential buyers, but there are more companies willing to acquire an ancillary business than companies that are open to buying a licensed entity.

2. Are we there yet? If you hold cannabis licenses, any sale of your business will likely require regulatory approval, meaning that you will not be able to simply sign and close a deal at the same time. There will need to be period between signing and closing where you obtain any required approvals. The specifics of this analysis will depend on the states and localities in question. In addition, for a multi-state operation, regulatory approval can be a very complicated matter and should be analyzed prior to starting any sale process. However, if timing is critical for a deal, there are ways to structure a transaction to speed things up. For example, it’s often possible to purchase a non-licensed IP holding company of a cannabis business without regulatory approval. And IP licensing deals, depending on the details and state in question, can often be put in place without pre-approval. Again, understanding the regulatory environment is critical for pulling together cannabis deals.

3. Are you exposed? Selling a cannabis business does not mean that you are free and clear of all obligations. If your business is subject to pass-through taxation (as is common for many cannabis businesses set up as LLCs) tax obligations, notably 280E, fall directly on the owners. That means you cannot just sell your business and walk away assuming you are free and clear of all obligations (except for representations made to your acquirers). The IRS could audit the business and come back to you with a significant tax bill down the line – plan accordingly.

4. Show me the money…or not. When shopping a cannabis company, it is important to understand that acquisition financing is almost non-existent in the cannabis industry. That means it is far more common to see alternative ways of financing deals – seller notes and all-stock acquisitions. So be prepared to get offers that only provide for a small amount of cash at closing.

5. Look out over the horizon. 
Cannabis business owners need to pay attention to the legislative process as new bills pass every session that impact cannabis M&A. In addition to the example of Colorado mentioned above, Maryland is another state where a business trying to ink a cannabis deal needs to be aware of recent changes. A new bill, SB 426, which takes effect on July 1, limits the number of cannabis licenses a person can own or control (as opposed to the existing law which only expressly prohibited the number of licenses the state could issue to a person). This law means several the highly acquisitive MSOs will not be able to purchase additional businesses or, in the typical workaround, set up management agreements with those businesses.


StaffStaffMay 24, 2019
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10min2790

Although an unconvincing earnings season has clouded the picture, marijuana stocks still enjoy strong fundamental catalysts

By Josh Enomoto, InvestorPlace Contributor May 16, 2019, 1:00 pm EDT

Since their inception, marijuana stocks attracted significant attention. Due to both investment sentiment – and let’s face it, raw emotions – the cannabis sector absolutely skyrocketed. But now, the segment is attracting attention for failing to live up to analysts’ expectations. Is the honeymoon phase over for weed?

Hardly! While cannabis firms have produced some disappointing results during earnings season, that’s no reason to abandon them. For one thing, the resurgent U.S.-China trade war is incredibly favorable for marijuana stocks to buy. Prolonged tensions will almost surely cause us economic damage. An easy fix here is to legalize weed and fully open the door to a multi-billion dollar industry.

Another reason to stay the course with marijuana stocks to buy is the medicinal-cannabis market. Currently, 33 states have legalized medical marijuana, which is indirectly an indictment against the pharmaceutical industry. As I’ve argued many times before, pharmaceuticals must take at least some responsibility for the opioid crisis. This story alone has converted many people who have realized the benefits of all-natural treatments.

Moreover, medical marijuana is becoming a popular and potentially profitable exported good. We all know that progressive Europe is receptive to cannabis-based therapies. But more shocking is that conservative Asian countries notorious for their draconian anti-drug policies have demonstrated tolerance. Thailand became the first Southeast Asian country to legalize medical marijuana, while South Korea is the first East Asian country to jump onboard.

No matter how you look at it, this development strongly benefits the “botanical” industry. Here are the best three marijuana stocks to buy right now:

Aurora Cannabis (ACB)

Aurora Cannabis (NYSE:ACB) recently issued its earnings results for the first quarter of 2019. Let’s just say the print wasn’t exactly great for ACB stock. Although Aurora Cannabis’ net-revenue haul of 65.2 million CAD exceeded the year-ago quarter’s tally by a country mile, it missed analysts’ consensus target of 67.6 million CAD.

Also, a miss was earnings per share. Wall Street expected a loss of 4 cents per share, but Aurora instead delivered a loss of 16 cents. With such a wide gap, conventional wisdom dictates that you should avoid ACB stock.

Actually, though, even if Aurora Cannabis hit its metrics with flying colors, I wouldn’t pay much attention. Why? Because this is a marathon investment toward an unprecedented sector. As such, you’ll find nearer-term noise. Ignore it.

The key here is that the management is positioning itself for dominance in the lucrative medical-marijuana market. Its acquisition of Whistler Medical Marijuana indicates that the focus is on quality, not quantity. When weak marijuana stocks get flushed out, ACB will remain standing.

Canopy Growth (CGC)

Undeniably, a motivating factor to buy shares of Canopy Growth (NYSE:CGC) is the company’s international presence. Primarily, it puts up a strong showing in the European mainland. Currently, Canopy is pushing both westward and eastward in the region. However, the ultimate prize for CGC stock and others is the U.S. market.

Of course, this is seemingly a pipe dream due to our country’s (misguided) Schedule I classification of marijuana. Still, CGC stock jumped mid-April when Canopy announced a contingent offer to buy out Acreage Holdings (OTCMKTS:ACRGF). Canopy will pay $300 million upfront if the U.S. legalizes marijuana.

Many botanical advocates argue that Schedule I is a relic of the ignorant and racist past. However, it’s still federal law, which means cannabis firms in green-friendly states are still technically at risk.

But thanks to the U.S.-China trade war, I genuinely believe that full legalization is nearing reality. A prolonged conflict with the world’s second-biggest economy will invariably hurt our own fiscal health. That’s why the U.S. has to explore marijuana if they insist on playing hardball with China. If so, look for CGC stock to soar.

Hexo (HEXO)

If you’re like most folks who learned about marijuana stocks to buy late in the game, you’re probably hesitant on exposing yourself to the top-tier names. After all, we see them splattered on investment headlines all over the internet. If that’s you, you might want to check out Hexo (NYSE:HEXO).

For starters, Hexo is an understated name. It generates interest, of course, but not nearly as much as the top dogs. I believe that benefits HEXO stock and is partially the reason why shares have steadily made robust gains. Year-to-date, the cannabis firm’s equity is up over 113%.

That said, HEXO stock has much more upside remaining over the long term. Renowned alcoholic beverage-maker Molson Coors Brewing (NYSE:TAP) has a partnership with Hexo to develop cannabidiol (CBD) infused, non-alcoholic drinks.

CBD recently gained mainstream recognition because it offers the cannabis plant’s health benefits but without levering a negative psychoactive effect. In other words, the compound is a perfect gateway for consumers to try other cannabis-based products.

This is a partnership that provides multiple natural synergies. Even though it’s not quite a household name, you should put Hexo on your list of marijuana stocks to buy.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.

 


StaffStaffMay 23, 2019
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8min1430

CGC stock remains in a range as Canopy Growth solidifies its market leadership

By Will Healy, InvestorPlace Contributor

Canopy Growth (NYSE:CGC) moved higher after announcing a deal with its investment arm, Canopy Rivers (OTCMKTS:CNPOF). This offers some relief to CGC stock, which had returned to levels not seen since before they announced their buyout intentions on Acreage Holdings (OTCMKTS:ACRGF).

Unfortunately, Canopy Growth stock seems to need more. CGC has again sold off after briefly crossing the $50 per share mark in late April. While the deals with Canopy Rivers and Acreage boost the long-term prospects of Canopy Growth Corporation, they also show the difficulty of breaking CGC stock out of its current trading range.

Canopy Growth Continues to Improve Market Positioning

Canopy Rivers announced that the portfolio company it owns, PharmHouse Inc., will commit more of its production to Canopy Growth. CGC will now buy an additional 20% of PharmHouse’s output for the next three years. PharmHouse had previously committed 10% of its flowering space to Canopy Growth.

Still, despite what the PharmHouse deal means to Canopy Growth, much of the focus has settled on mergers and acquisitions (M&A). The latest M&A deal for Canopy involves a buyout of New York-based Acreage Holdings. However, in reality, one could better describe this “agreement” as an option. The deal will not close until recreational weed becomes legal across the U.S.

I agree with my InvestorPlace colleague Tom Taulli that the alliance with Constellation Brands (NYSE:STZ) alliance holds Canopy Growth in good stead. I also believe the company has positioned itself for a leadership position in the U.S. in both hemp and cannabidiol (CBD). This benefits the firm without regard to what happens with the Acreage deal. I also see Canopy Growth remaining the market leader in North America when U.S.-based companies can operate with full legal status.

Investors Should Separate Canopy Growth, CGC stock

Still, what helps Canopy Growth may or may not boost Canopy Growth stock. The current hype regarding marijuana stocks renders the price-to-sales (P/S) ratio of around 135X meaningless. However, it also leaves investors without a valuation-based metric with which to evaluate CGC stock.

Hence, this leaves investors with the charts as a guide. For all of the hype, Canopy Growth stock has twice pulled back after spiking above $55 per share in intraday trading. In recent weeks, even the Acreage deal could not keep CGC stock above $50 per share. Moreover, since Jan. 15, it has rarely moved below $40 per share or above $50 per share.

CGC Stock Has Become Range-Bound

Despite its elevated multiple, I do not think it will break through the lower end of the range unless a recession occurs, or the U.S. suddenly makes cannabis legal.

For now, traders have focused on when and how CGC stock will break through on the high end of the range. The elevated P/S ratio will struggle to go even higher without further stimulus. However, seeing the rally fizzle after the stock moved past $50 per share could make one wonder whether stimulus truly helps. Moreover, seeing marijuana stocks (including CGC) tank after weed became officially legal in Canada remains fresh on investor’s minds. It also shows the strange and powerful phenomenon of illegality driving cannabis equities.

Like most, I believe CGC stock will trade at higher levels years from now. However, until we see the stock stay above $55 per share, I do not think that the higher stock price will come in the near term.

Final Thoughts on CGC Stock

CGC stock trades near the high end of its range, and I expect CGC will stay in the range. The PharmHouse deal serves as yet another confirmation that the growth story remains intact for Canopy Growth. However, it will likely not have a material effect on Canopy Growth stock.

Moreover, before the company announced this deal, CGC had fallen back to levels it saw before they announced the Acreage Holdings deal. Simply put, CGC stock has become range-bound.

The prospects of the cannabis industry should keep Canopy Growth stock at an elevated multiple in the near term. However, even a major coup such as the Acreage deal has failed to put CGC stock back on a growth trajectory.

The Acreage and the PharmHouse deals show that Canopy Growth has both the strategic vision and the product needed to lead the marijuana industry. Unfortunately, translating this insight into near-term growth for Canopy Growth stock will prove more elusive.

As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting.

 


StaffStaffMay 22, 2019
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7min2330

This is a guest post by Katrina Hatchett.

The role of marijuana in society, and more lately in business, has never been simple, but in recent times this natural product has stepped more and more into the mainstream. Now, in the United States, more than half of the 50 states recognize marijuana for medical purposes, and there is a growing acceptance of its recreational use too (marijuana is now legal in 10 States, as well as DC). In Canada, marijuana has actually been legalized for recreational use as well as for medical purposes. In the rest of the world, there are countries which have legalized marijuana, decriminalized it, or have relaxed rules with regards to personal use and cultivation. Medical usage is now accepted in about a quarter of the world’s countries, with many more having legalization on the agenda.

What does that mean? As well as advances in the treatment of pain relief and other medical symptoms, and the cultural aspects which surround recreational use, there is now a growing investment industry around marijuana. In fact, investing in marijuana stocks represents a great opportunity for even the greenest (pun intended) investor. Here are all the things that potential investors need to know.

Not all stocks are the same, so choose one that suits your strategy

Every potential investor must, first of all, think about exactly what they want for their investment: this is true no matter you are looking to invest in. Are you looking for a quick pay-day, or are you more concerned with stable growth over a longer period? Investing in marijuana stocks offers all sorts of potential returns, so conduct immaculate research first.

The cannabis industry has grown to such an extent that it now includes a wide-ranging and eclectic assortment of businesses: from hospitals and pharmaceutical companies to concrete manufacturers, believe it or not. Many of these businesses are looking for investment capital, but as you can see they may all share a reliance on one particular product, but that is where the similarities end, so this is far from a catch-all topic.

Use an investment broker and a legal expert

The decision to go with a professional broker may depend entirely on the strategy you wish to employ, plus the size of the investment you want to make. If you are considering putting a major chunk of your capital into marijuana stocks, it is definitely worth getting professional advice, which may also include legal advice on the various regulations which exist. Remember that the US Federal Government still identifies marijuana as an illegal substance, so you need to understand very well what you can and cannot do.

Pay close attention to the market

This is a piece of advice that rings true once more for whatever you may be investing in, but with it being such a delicate subject, you really must keep your ear to the ground with regards legal updates and changes in regulations. Of course, it’s good news for investments if more countries decide to legalize cannabis for both medical and recreational purposes, so you will need to ascertain what the likelihood of that happening is in different territories.

Then there are huge market players who are looking at new ways to use cannabis. For example, drinks giant Coca Cola is examining ways to produce marijuana-infused drinks, so stock prices are sure to been affected by such a move.

“A great piece of advice is to look at the marijuana companies that major companies are investing in because that is usually a sign of a solid investment,” points our Eve Stoddart, a marketer at Write My X and NextCoursework.

Never forget the golden rule

No matter what you are investing in, the golden rule is always to diversify your portfolio. The oft-quoted golden rule is 10%: never have more than 10% of your capital invested in one stock. The same rule applies here.

“The danger with investing in marijuana stocks, a little like cryptocurrencies, is that investors will somehow treat it as ‘different’ due to all the noise that surrounds it. That is a mistake. Look at any investment with the same, objective eye as you would when entering any market,” urges Terry McNeil, a project manager at BritStudent and Australia2write.

Katrina Hatchett is a lifestyle blogger at Academic Brits with a particular interest in the art of communication: a field in which she has cooperated on many projects. She is a regular contributor at Origin Writings, as well as a blogger at PhDKingdom.

 


StaffStaffMay 21, 2019
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7min3120

The owners of APHA stock will know sometime in the next 12-24 months if Irwin Simon’s rise to power at APHA is a good or bad thing

By Will Ashworth, InvestorPlace Contributor May 16, 2019, 9:15 am EDT

No one who follows Aphria Inc. (NYSE:APHA ) stock should have been surprised that the company’s president, Jakob Ripshtein,  resigned on May 14.

Ever since interim CEO Irwin Simon was appointed Independent Chair of Aphria’s board in December,  it was only a matter of time before Simon, the entrepreneurial founder and former CEO of Hain Celestial (NASDAQ:HAIN), would play a more prominent role at the Canadian cannabis company.

Out With the Old

Simon stepped down in June 2018 from his role as CEO of Hain after years of sub-standard shareholder returns and a hard-court press from activist investor Engaged Capital.

Simon owned 1.7% of Hain’s stock, but Engaged has an 11.3% stake, so Engaged’s founder, Glenn Welling, was appointed to Hain’s board in September 2017. Simon remained the chairman of Hain, the same role he now holds at Aphria.

At 60 and in reasonably good health, Simon probably isn’t ready to devote his life to the golf course and retirement.

The resignation of Ripshtein, after Vic Neufeld stepped down as APHA’s CEO in January, is another part of the changing of the guard at Aphria.  

I expect the board to soon remove the interim tag from Simon’s current title. The Irwin Simon era at APHA has begun.

The New COO

Ripshtein joined Aphria in May 2018 as its chief commercial officer and was promoted to president six months later, before Simon arrived on the scene. While Simon’s words of thanks to Ripshteins in the company’s press release were complimentary, it’s clear by Aphria’s choice for COO that Simon wasn’t comfortable working with Ripshtein, a former CFO of Diageo’s (NYSE:DEO) North American operations and former president of the liquor company’s Canadian operations.  

“On behalf of the Board of Directors and Aphria team, we thank Jakob for his contributions to the Company over the past year and wish him well in his future endeavors. He has been instrumental in assembling the incredible team we are fortunate to have today that will carry his responsibilities forward,” Irwin stated in Aphria’s May 14 press release.

The new COO is Jim Meiers, who happens to have come to Aphria after 14 years at Hain Celestial, where he worked alongside Simon. At Hain, Meiers led several senior executive positions, including president of Celestial Seasonings. Before Hain, he worked at both H.J. Heinz and Kraft Foods.

Meiers’ hiring suggests two things.

First, it’s likely Simon wanted someone he could trust to execute Aphria’s game plan and someone who’s familiar with his style of management. Every change at the top involves a little turnover. I’m sure it wasn’t personal.

Secondly, Meiers’ background suggests that Simon is looking to implement a supply chain which is more appropriate for a food company rather than a medical company. Both, however, require significant oversight, making the appointment a sensible one and positive for Aphria stock.

The Bottom Line on Aphria Stock

The moves announced May 14 are simply part of the ongoing transformation of Aphria from Vic Neufeld’s baby to Irwin Simon’s.

One of two things is going to happen in the coming months.

Either Simon will be appointed the permanent CEO (likely) or Meiers will become the chief executive (less likely but still possible). 

Given the spotty performance of Hain stock over the past 15 years, I don’t know if Simon’s rise to power at APHA is, overall, a good thing or a bad thing for the owners of Aphria stock.

At the time of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.


StaffStaffMay 20, 2019
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4min1070

It’s time for your Daly Hit of cannabis financial news for May 20, 2019.

On The Site

Organigram

Canadian-based Organigram Holdings Inc. (TSX VENTURE: OGI) (OTCQX: OGRMF)  will begin trading on the NASDAQ Global Select Market on May 21, 2019. The company will continue to list its common shares on the TSX Venture Exchange under the symbol “OGI.”

“As a management team we are seeing increased interest from investors in the U.S. and internationally and believe that having a listing on the NASDAQ will facilitate trading,” said Paolo De Luca, Chief Financial Officer of Organigram. “In addition, based on precedents in the cannabis space, we expect trading volumes to increase which should result in increased liquidity for all investors.”

Five Tips For Selling

Legal cannabis sector fundamentals have strengthened in recent months thanks to new markets coming online and rising sales in existing markets. As a result, there has been a wealth of M&A activity lately, as existing operators increase their pace of acquisitions and new investors flock to the industry, buoyed by these investment opportunities. This has led to smaller operators selling their businesses to the larger players who are looking to consolidate or enter the market or both. This can be a smart move if properly executed, but there are also plenty of ways in which it can go awry.

Here are five crucial tips for operators thinking about selling their businesses in the coming years. This is the first part of a two-part series. In part two, we will provide five additional tips focused on the regulatory issues cannabis companies need to understand.

In Other News

Body & Mind

Body and Mind Inc. (CSE: BAMM) (OTC Pink: BMMJ) has closed its previously announced private placement offering with M Partners Inc., as lead agent, together with a syndicate of agents including PI Financial Corp. for 11,780,904 units at a price of CAD$1.25 per Unit for gross proceeds of CAD$14,726,130.

Northern Swan

Global cannabis firm, Northern Swan appointed Former Majority Leader Tom Daschle and Representative Joe Crowley to its Advisory Board. Daschle was one of the longest serving Senate Democratic leaders in history and one of only two to serve twice as both Majority and Minority Leader.

Crowley in the U.S House of Representatives – New York’s 14th Congressional District, which includes Crowley’s hometown of Woodside, Queens, but he lost that seat to Alexandria Ocasio-Cortez.

Northern Swan has raised approximately $100 million of financing to date for their cannabis initiatives which include expanding existing Latin American operations, invest in new low-cost, large-scale cannabis cultivation and processing centers and build out distribution channels and brands in Europe, Latin America and North America. Northern Swan has invested in several companies spanning the global cannabis value chain including Clever Leaves, a leading vertically integrated licensed producer of medical cannabis in Colombia, Cansativa GmbH, a German cannabis distribution company.



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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