William Sumner, Author at Green Market Report

William SumnerWilliam SumnerJuly 19, 2018
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5min190

It’s time for your Daily Hit of cannabis financial news for July 19, 2018.

On the Site

2018 Cannabis Stock Activity Trending Toward A Canadian Exodus

U.S. companies running north of the border and IPOs are on the rise. Over the next year expect an increase of cannabis companies to start going public in Canada instead of the United States. Although the U.S. market has great potential in the long run, there are a lot of short-term advantages to going public in Canada.

The Green Organic Dutchman Pays Warrant Dividend In New Company

The Green Organic Dutchman Holdings Ltd. (TGODF) is distributing a dividend that will consist of a warrant in a new corporation called TGOD Acquisitions to its shareholders. The company will do just as the name says – acquire and develop worldwide opportunities.

Tilray’s NASDAQ Cannabis IPO Is Lit

On Wednesday, the Canadian-based cannabis cultivator, processor, and distributor, Tilray Inc. (TLRY), completed its initial public offering and shares of the company have already begun trade on the NASDAQ Global Select Market under the symbol “TLRY.”

In Other News

MPX Bioceutical Corporation

MPX Bioceutical Corporation (MPX) is staking its claim in California’s cannabis extract market. Today the company announced that it has entered into an agreement with Case Farms Collective, one of the largest cannabis extraction facilities in California. Under the agreement, Case Farms will provide cannabis processing services to MPX, according to specifications set down by MPX. Case Farms will also distribute MPX-branded cannabis concentrates among its network of licensed dispensaries in the state.

MariMed Inc.

MariMed Inc. (MRMD) announced today that Navy Capital Green Fund, the first Long/Short Public Equity Fund in the United States focused solely on the cannabis industry, has made a $2 million investment in the company. MariMed will use the money raised to growth projects, which includes a build-out of cannabis facilities in Massachusetts scheduled to open by the end of the year. “This placement by one of the top investment houses in cannabis demonstrates Navy Capital’s confidence in our strategic plan and our potential for asset and revenue growth,” said Robert Fireman, MariMed CEO, in a statement. “We’ve had 11 consecutive quarters of year over year revenue growth, and Navy Capital’s infusion will help further facility development and expand corporate infrastructure, in turn bolstering assets, increasing revenue, and delivering financial performance.”

Emerald Health Therapeutics Inc.

Emerald Health Therapeutics, Inc. (EMH) announced that it has signed a definitive agreement with Abattis Bioceuticals Corp. (ATT) to acquire the remaining shares of Northern Vines Canada Inc. for $2 million in cash and $4 million in shares; giving Emerald Health 100% ownership of the company. Northern Vine is a Licensed Dealer (LD) under the provisions of the Canadian Controlled Drugs and Substances Act; which allows the company to import and export cannabis oils. “The acquisition of Northern Vine allows us to leverage its dealer license and research and development facility to advance our research plans to develop cannabis formulations supporting new products for both recreational purposes and to treat a broad spectrum of human conditions and diseases,” said Emerald Health CEO Chris Wagner in a statement. “The dealer license would also enable Emerald to cost effectively source non-dried-flower cannabis products from suppliers in other countries.”

 


William SumnerWilliam SumnerJuly 19, 2018
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3min370

On Wednesday, the Canadian-based cannabis cultivator, processor, and distributor, Tilray Inc. (TLRY), completed its initial public offering and shares of the company have already begun trade on the NASDAQ Global Select Market under the symbol “TLRY.” The shares were priced at $17, which was above the estimated range of $14-16. The stock also traded as high as $23 at one point for a 35% increase.

Tilray is offering 6,524,000 shares of Class 2 common stock in the United States and other select countries, excluding Canada, for a sum value of $110,908,000 USD. Another 2,476,000 shares of Class 2 common stock, which the company refers to as Subordinate Voting Shares, are being traded in Canada and other select countries, excluding the United States, at a price of $22.45 CAD per share; totaling to $55,586,200 CAD in value.

The combined value of both offerings totals to roughly $153 million USD. Tilray set out to raise $135 million.

BMO Capital Markets and Cowen are acting as joint book-runners for the IPO, with Cowen handling the U.S. IPO and BMO handling the IPO in Canada. Likewise, Eight Capital will act as lead manager for the Canadian IPO while Roth Capital Partner and Northland Capital Markets server as the lead manager and co-manager, respectively, for the U.S. IPO.

Additionally, Tilray has granted U.S. underwriters a 30-day over-allotment option to purchase up to 978,600 additional shares of Class 2 common stock and the Canadian underwriters a 30-day over-allotment option to purchase up to 371,400 additional Subordinate Voting Shares at the initial public offering price. The offering is expected to close on July 23, 2018.

Despite the number of shares issues, Privateer Holdings will remain the majority shareholder and primary owner of Tilray with 75 million Class 1 shares. As one of the first licensed medical cannabis producers in Canada, Tilray has already established a presence in 10 countries and will use the funds raised from this IPO to further increase its cultivation and processing capacity; as well as liquidity.

 

 


William SumnerWilliam SumnerJuly 18, 2018
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3min990

Leafwire, a Denver-based cannabis technology platform, announced today the launch of its online marketplace. The goal of its marketplace will be to connect investors and entrepreneurs in the cannabis space and to help enable a better exchange of information and opportunities within the industry.

Although cannabis business owners secured more than $1.5 billion last year in investment, many in the industry still have difficulty to find the right investment partners; which is only worsened by the disconnect between state and federal cannabis laws.

“Legalization of cannabis opens up a huge opportunity, not only for cultivators and distributors but for the ancillary market that supports those companies,” said Leafwire CEO Peter Vogel. “Yet the investment community has been slower to support this industry than other emerging markets because of the lingering Federal regulations and existing stigma. That said, I have spoken to 100’s of investors who are looking for the right opportunities to explore in this market. Leafwire will help to connect those investors with the prospect that best meets their needs.”

The platform’s first offering will allow entrepreneurs to find investors that are interested in investing in the cannabis industry and vice versa.  Both investors and entrepreneurs will be able to create profiles that detail their investment preferences, experience, and current needs.

Entrepreneurs will be able to search for investors based on several filters; including the stage of investment, location, and preferred type of cannabis business. Likewise, investors will be able to search for cannabis businesses based on their size and fundraising stage, company location, and company type.

Company profiles will also allow entrepreneurs to list their company’s products and services, making it easier for investors to find the right partner.

In addition to connecting entrepreneurs and investors, Leafwire will also act as a hub for cannabis news, regulations, allow private messaging, and provide updates from members of the individual’s user network.

To celebrate its launch, Leafwire will hold an inaugural Pitch-a-Thon on July 19, 2018, in Denver, Colorado. The contest will include pitches from six up and coming cannabis companies seeking funding and will feature a cash prize for the winner. Judges for the event will consist of senior executives from Kush Bottles, Phyto Partners, New Frontier Data, Wana Brands, and Denver Relief. The company also plans on holding additional pitch events later this year in Miami and Southern California.


William SumnerWilliam SumnerJuly 16, 2018
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3min810

Aurora Cannabis Inc. (ACBFF) has joined a growing number of cannabis companies working with the Canadian e-commerce platform Shopify. Today, Aurora announced that it had reached an agreement with Shopify to leverage the e-commerce site’s platform to assist in distributing Aurora’s medical and recreational cannabis globally.

Under the agreement, Shopify will work closely with Aurora’s software engineering team to help transition Aurora’s current e-commerce site to a new platform developed by Shopify; a move which both companies believe will help improve customer experience.

“Selecting Shopify allows Aurora to bring a world-class e-commerce solution to our patients and future adult consumer use customers,” said Darryl Vleeming, CIO of Aurora Cannabis Inc. “Shopify’s unique, industry-leading platform provides a safe, secure and flexible e-commerce site that we can build on as we execute our global growth initiatives and enter new markets.”

This recent agreement is not Shopify’s first foray into legal cannabis. At the beginning of the year, Shopify announced that it would partner with the provincial government of Ontario to manage recreational sales of cannabis through both its online platform and point-of-sale technology.

The company also secured an agreement with The Hydropothecary Corporation (THCX) to build its to build its e-commerce platform. Shopify’s CEO Tobi Lutke and COO Harley Finkelstein were also named among a handful of investors in the Toronto-based cannabis media and tech company, Herb back in October 2017.

“While both companies originate in Canada, this is a true global success story, combining our industry-leading technology, helping to power the international expansion of one of the global leaders in the exciting and rapidly growing cannabis industry,” added Shopify VP Loren Padelford. “The Shopify platform will allow Aurora to provide a tailored customer experience that embraces and adapts to the unique demands of both consumers and regulators, adapted to the specific needs of the various jurisdictions in which Aurora operates.”


William SumnerWilliam SumnerJuly 11, 2018
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3min1420

Aurora Cannabis Inc. (ACBFF) announced today a pair of agreements aimed at strengthening the company’s brand recognition and product offerings.

First, Aurora announced that it has signed a binding term sheet with CannaRoyalty Corp. (CNNRF) to purchase CannaRoyalty’s exclusive license to use and commercialize pre-roll technology developed by Wagner Dimas in Canada for a price of $7 million CAD.

“Pre-rolls are a rapidly growing, in-demand segment of the international cannabis market and the Wagner Dimas’s technology has substantial competitive advantages over peers in terms of throughput, quality and diversity,” said Terry Booth, CEO of Aurora. “This Agreement reflects Aurora’s strategy to continue broadening our high-quality product portfolio by expanding into value add products for both the medical and adult consumer markets.”

The deal is not yet final and closing of the deal will be subject to regulatory approval and other undisclosed conditions. However, barring a mutual agreement between the two parties to terminate the deal, the agreement is expected to close within the next 15 days.

Aurora also announced that it has entered into a partnership agreement with Evio Beauty Group, whereby Aurora will make a strategic investment in Evio. Aurora and Evio will work together to develop a line of co-branded cosmetic products containing hemp seed oil as well as CBD infused beauty products. Evio Beauty is a company with a wide portfolio of conscious lifestyle brands and its sister cosmetic brand, Evelyn Iona, has a diverse consumer base and a strong e-commerce platform. Both Aurora and Evio hope that this partnership will help increase both companies brand recognition and cross-selling opportunities.

“The cannabis industry is uniquely positioned to champion more women in leadership roles. With the strong support of a dedicated partner like Aurora, we will continue to scale our female empowerment initiatives while addressing pain points in the cosmetics industry,” commented Brandi Leifso, CEO of Evio Beauty. “By utilizing hemp seed oil and cannabis derivatives, we can enhance ingredient transparency, reducing the use of hurtful animal by-products and ecologically unsustainable inputs.”

 


William SumnerWilliam SumnerJuly 10, 2018
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3min940

 

Green Thumb Industries (GTI), a national company focused on cannabis cultivation, dispensary operations, and packaged cannabis products, has announced that best-selling author Wes Moore would be joining its board of directors.

“I’m thrilled to join GTI’s board and help empower its efforts to revitalize neighborhoods that have been disproportionately affected by the failed war on drugs,” said Moore in a statement. “As a veteran, I applaud GTI’s efforts to expand access to medical marijuana for those who have found relief from PTSD, chronic pain and other conditions via cannabis’ medicinal benefits. I’m also impressed with the company’s entrepreneurial success story and look forward to being a part of the team that leads the company’s strategic growth going forward.”

Moore is a former combat veteran, an outspoken advocate for U.S. military veterans, and a Rhodes Scholar with degrees from Oxford University and John Hopkins University. He is most famously known for his books “The Other Wes Moore” and “The Work,” both of which made it the New York Times and Wall Street Journal bestseller lists, as well as the host of the PBS series  “Coming Back with Wes Moore.” Currently, Moore serves as the CEO of New York City’s largest poverty-fighting organization, Robin Hood. Prior to his current position, Moore also served on Robin Hood’s Veterans Advisory Committee, where he helped connect veteran families living in poverty with government and non-profits resources.

“Wes is an ideal addition to the GTI board as we look to further the company’s positive impact on the communities we serve, many of which have lost lives and economic opportunities due to mass incarceration for non-violent drug-related convictions, in some cases resulting in generational poverty,” commented GTI CEO Pete Kadens.

GTI Starts Trading on OTCQX

Over the last several months, GTI has been rapidly expanding its national footprint; acquiring multiple medical cannabis licenses in Ohio and becoming listed on both the CSE. Earlier this month, the company also announced that it would begin trading on the OTCQX market under the symbol GTBIF, effective on July 9, 2018.


William SumnerWilliam SumnerJune 8, 2018
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3min2470

The prospect of legalized cannabis in North America just got a little bit brighter. On June 7, 2018, the Senate voted to approve Bill C-45, a measure legalizing recreational cannabis in Canada. The measure will now go to the House of Commons for a final vote.

If approved, the potential financial effect could be tremendous. A recent report released by Stifel Financial estimated “a total medical market opportunity of $1.3 billion CAD and a recreational opportunity of $8 billion CAD (retail sales).” Additionally, the report found that the wholesale market opportunity for licensed producers could reach as high as $5 billion CAD.

With the majority of the House controlled by Prime Minister Justin Trudeau’s Liberal Party, which successfully campaigned on cannabis legalization in 2015, the odds of Bill C-45 passing are quite high. However several amendments to the measure made by the Senate, such as allowing provinces to ban personal cultivation, could slow down the legislative process.

Speaking with The Toronto Star, Health Minister Ginette Petitpas Taylor said that once passed, it would take upwards of two to three months to implement the new law.

In the United States, President Donald Trump stated that he would most likely support a bipartisan bill, introduced by Massachusetts Sen. Elizabeth Warren and Colorado Sen. Cory Gardner, that would essentially end the federal war on cannabis.

“I support Sen. Gardner. I know exactly what he’s doing; we’re looking at it. But I probably will end up supporting that, yes,” Trump told reporters, as quoted by NPR.

Under the proposed legislation, the Controlled Substances Act would be amended to allow states to write their own cannabis laws without fear of federal interference. The apparent support offered by President Trump breaks with the position of his Attorney General, Jeff Session, who has been an ardent opponent of legalized cannabis and most recently rescinded the long-standing Cole Memo; which was put in place by then-President Barack Obama.


William SumnerWilliam SumnerJune 8, 2018
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3min3670

Kush Bottles (KSHB), a company specializing in cannabis packaging solutions, announced that it has entered into a definitive agreement with investors for a registered direct offering priced at $36 million. A.G.P./Alliance Global Partners is the sole placement agent for the offering.

Under the agreement, Kush Bottles will sell to investors 7.5 million shares of common stock, at a price of $0.001 per share, and warrants to purchase up to 3.75 million shares of common stock at an combined offering price of $4.80 per share.

The warrants carry an exercise price of $5.28 per share and are immediately exercisable. The warrants will expire five years from the date of issuance. The company will use the proceeds from the offering to working capital, product development, acquisitions, capital expenditures, and other business opportunities. The offering is expected to close on or about June 12, 2018.

The offering comes several days after the company announced the launch of a new division, Koleto Packaging Solutions, which would focus on developing FDA-compliant packaging solutions to the pharmaceutical and veterinary industries. Leading up the new division will be Edd Pratt, Kush Bottles’ Executive Vice President.

A report by Grand View Research found that the global pharmaceutical packaging market is expected to reach $158.8 billion by the year 2025. With less legal risks and an equally large market, it is easy to see why Kush Bottles would want to branch out into the pharmaceutical packaging. In a statement, Kush Bottles’ CEO Nick Kovacevich said that the company was “uniquely suited” to scaling its know-how into other industries.

“In speaking with many of the key stakeholders, such as the manufacturers and distributors, we see an opportunity to address how packaging in pharmaceutical and veterinary industries are handled, stored and used and aim to create a solution that fits the end-users’ specific needs,” commented Kovacevich. “Our priority is finding packaging solutions that ensure the quality and safety of all pharmaceuticals while addressing the problem of stale innovation.”

Stock Performance

Kush stock was lately trading at $4.99, down from its year high of $8.51, but above its 52-week low of $1.81.


William SumnerWilliam SumnerJune 7, 2018

5min1420

This is your Daily Hit of cannabis news for June 7, 2018:

On The Site

Aphria Inc.

Aphria (APHQF) announced that it has entered into an agreement with Clarus Securities to raise $225 million on a “bought deal” basis, as it looks to expand both its production facilities around the world and its state-of-the-art Extraction Centre of Excellence. The announcement, made Wednesday, will see Aphrais sell 18.9 million shares at a price of C$11.85.

Canadian Senate Poised to Vote on Legalizing Recreational Cannabis

The nation of Canada is on the precipice of a historic moment as the country’s legislature stands poised to pass cannabis legalization. On June 7, 2018, the Senate will hold a vote on Bill C-45, a measure legalizing recreational cannabis nationwide. If passed, Canada will become the first G7 nation to legalize cannabis for recreational purposes and could potentially usher in a boom of economic activity.

In Other News

Canopy Growth Corp.

Canopy Growth (CGC) has announced that it has entered into a collaboration agreement with Molecular Science Corp. (MSC), a Canadian laboratory service. Under the agreement Canopy will work with MSC to create new and standardized testing method to better analyze cannabis potency, terpene profiling, pesticides, heavy metals, and mycotoxins as required by Health Canada. MSC will provide the equipment while Canopy will provide access to its Health Canada certified lab, infrastructure, industry knowledge, and a diverse supply of medical cannabis for testing. “Trust is key to success in the cannabis industry and this collaboration to advance scientific research and testing is key to earning and keeping the trust of our patients and future customers,” said Mark Zekulin, President, Canopy Growth. “We’re working to make testing practices faster and more consistent while driving enhanced accountability as well as visibility into the cannabis supply.”

Aurora Cannabis Inc.

Aurora Cannabis (ACB) has announced that it has signed a strategic agreement with Capcium Inc. to produce cannabis-based softgels for medical cannabis patients and has also purchased a 19.99% stake in the company for $10 million through a non-brokered private placement. Capcium is Montreal-based company that specializes in producing softgel capsules. Capcium will use the proceeds from Aurora’s investment to expand its production of cannabis-based softgels; which includes the construction and operation of a large-scale facilty that will be completed by Q4 2019. “This investment in Capcium reflects our strategic objective to further expand our differentiated, higher-margin product offerings,” said Terry Booth, CEO of Aurora. “Capcium’s extensive know-how has enabled it to develop an advanced technology for the high-volume production of cannabis-based softgels. This provides us with a strong competitive advantage, positioning us well to build a leading position in the production and sale of value-added cannabis products globally.”

Body and Mind Inc.

Body and Mind Inc., (BAMM) a Vancouver-based cannabis commpany, has announced that company has procured an ownership interest in an Ohio medical cannabis dispensary, NMG, Ohio LLC. Body and Mind’s subsidiary, Nevada Medical Group LLC., has a 30% ownership interest in NMG; with plans to expand its stake in the future. “We are very pleased with our group being awarded one of the dispensary licenses located in Ohio and confirms the commitment and skill of our team,” stated Robert Hasman, President of NMG. “We have worked hard to submit numerous low cost strategic license applications to grow the company and create shareholder value.”


William SumnerWilliam SumnerJune 7, 2018

4min4840

The nation of Canada is on the precipice of a historic moment as the country’s legislature stands poised to pass cannabis legalization. On June 7, 2018, the Senate will hold a vote on Bill C-45, a measure legalizing recreational cannabis nationwide.

If passed, Canada will become the first G7 nation to legalize cannabis for recreational purposes and could potentially usher in a boom of economic activity. A new report from Stifel said, “We estimate a total medical market opportunity of $1.3 billion CAD and a recreational opportunity of $8 billion CAD (retail sales). We believe the domestic wholesale market opportunity for Licensed Producers (LPs) in Canada will be closer to $5 billion CAD in total value, which is a much smaller opportunity than what we believe the frenzy around Canadian marijuana stocks seems to imply.”

However, while many industry insiders already consider legalization a sure bet, the passage of Bill C-45 is far from a done deal. According to CBC, a flurry of last-minute amendments have been added to the bill which could gum up the legislative process.

For example, one amendment submitted by the Senate’s social affairs committee passed would allow provinces to decide for themselves whether or not to allow home cultivation, an idea that Prime Minister Justin Trudeau has dismissed. Both Quebec and Manitoba have expressed interested in banning home cultivation, so if the amendment was included in the final legislation, at least two provinces would ban the practice.

Furthering clouding the outcome of the upcoming vote is the question of whether the legislature’s Indigenous senators would support the bill. Previously, some Indigenous senators have complained that the legislature did not adequately consult with the First Nations, Metis or Inuit. If the Indigenous senators pull their support from Bill C-45, the legislation could fall short of passing.

Should the measure pass in the Senate, it would then go on to the House of Commons for approval. Dominated by the Liberal Party, there is a strong possibility that they will reject some of the amendments proposed by the Senate, such as the home cultivation provision, which could set the stage for a stand-off between the two houses of government.

Speaking with CBC, MP Marie Ginette Petitpas Taylor expressed confidence in the measure while acknowledging that some more legislative work may need to be done.

“We’re confident with Bill C-45. However, we recognize that the Senate has done some work and I’m looking forward to seeing the recommendations that they bring forward,” said Petitpas Taylor. “[After the vote] we’ll be able to evaluate what the results are and from there … we’ll be able to make a determination as to what our next steps are going to be moving forward.”

Assuming that both legislative bodies approve Bill C-45, recreational sales of cannabis would begin at the earliest by August 2018. Beyond its borders, the Stifel report also said, “Canadian companies will be well positioned for supplying international markets as they potentially develop – U.K., Germany, Australia, etc. are all markets where legalization is starting to occur and the Canadian companies are increasingly well positioned to attack these markets.”



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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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