Cantor Fitzgerald Archives - Green Market Report

StaffNovember 28, 2022
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5min10260

The Daily Hit is a recap of cannabis business news for Nov. 28, 2022.

ON THE SITE

Veterans’ Plight Spotlights Need for Cannabis Legalization as Congress Moves Research Bill

As a historic House-passed cannabis research bill makes its way to President Joe Biden’s desk after surviving a Senate vote, questions remain regarding its impact on the future of federal legalization. One group whose concerns get washed in the stalemates and political acrobatics: former service members facing the specter of stigma and barriers to accessing safe medicine. Read more here.

NY Cannabis Regulators Disclose How They Chose Licensees

Retail cannabis applicants who lived in low-income areas, in public housing or were homeless when they were convicted of marijuana-related offenses had an advantage in the application process for legal cannabis dispensaries, according to details newly revealed in court papers. Read more here.

Bill Would Make Cannabis Companies Eligible for SBA Loans

A Democratic senator has formally introduced a bill that, if successful, would make U.S. cannabis companies fully eligible for federal loans through the Small Business Administration. Read more here.

Done Deals: Trees, Bright Minds

Despite the challenges of raising capital these days in the cannabis and psychedelics industry, two companies managed to close deals before the end of the year.

Read more here.

Cantor Issues Upbeat Cannabis Report

Cantor Fitzgerald analyst Pablo Zuanic wrote an upbeat research report on the major cannabis companies despite the somewhat depressing tone in the industry. Despite the sunny optimism, he opted to leave ratings, estimates, and price targets unchanged. Read more here.

More Earnings Reports

IN OTHER NEWS

Cannibble Foodtech Ltd.

Cannibble Foodtech Ltd., (CSE: PLCN), a food tech company that develops and manufactures hemp-enhanced food and beverage products, has entered into a share purchase agreement to acquire Eshbal Functional Foods Cooperative Ltd., a private Israeli gluten-free food tech manufacturer. Read more here.

Hempacco

Hempacco Co. Inc. (Nasdaq: HPCO), a hemp smokables company, entered into a joint venture agreement with Sonora Paper Co. Inc. to manufacture, market, and distribute hemp blunt wraps, hemp tubes, and hemp smoking cones based on SPCI’s intellectual property. Read more here.

Hempacco also entered into a joint venture agreement with High Sierra Technologies Inc. (OTC: HSTI) for the production, marketing, and sales of hemp smokables. Pursuant to this agreement, HSTI and Hempacco formed a new Nevada corporation known as Organipure Inc, in which HSTI and Hempacco each own 50% equity interest. Read more here.


Debra BorchardtNovember 28, 2022
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6min13880

Cantor Fitzgerald analyst Pablo Zuanic wrote an upbeat research report on the major cannabis companies despite the somewhat depressing tone in the industry. Zuanic said he hosted 17 company meetings at MJBiz last week and the overall mood was positive. Despite the sunny optimism, the analyst opted to leave ratings, estimates, and price targets unchanged.

Trulieve

Zuanic wrote that for Trulieve (OTC: TCNNF), “Most of the heavy lifting from the Harvest integration has been completed (AZ store rebrand underway), and management thinks it is ahead of peers on tech (SAP; 24 months into the ERP process).” Legalization of adult use in the state would boost the stock and polling is pointing to 70% support and signature collection is running on track. The next main hurdle is the state supreme court review process in early 2024. Trulieve also outlined what it thinks are the positives in the next year. They include:

  • The Florida patient count growth improving (+2,500/week now)
  • The start of adult-use sales in CT and MD
  • It believes the recent election increases the probability of PA going to adult-use
  • WV and GA (although only oils are allowed for now) should begin to ramp. 

Cresco Labs

Zuanic sees the divestiture plan moving ahead and seems to be secure. The Cresco brands enjoy better market share than the Col-Care brands so the company expects to roll out the Cresco brand portfolio across the Columbia Care footprint. “According to management, there is room to improve margins in the combined company, especially in states in either start-up mode or going through a phase of investment,” wrote the analyst.

TerrAscend

  • TRSSF believes in 6-12 months it may be in a position to list in the TSX
  • In MI, given distress in the market, it sees opportunities to expand by acquiring more stores
  • Two NJ stores are “90% of the way to the $40Mn/store annual sales target run rate.

WM Technology

  • The company is removing delinquent accounts
  • Reining in expenses
  • It expects to be cash flow positive by 1H23

Canopy Growth

Zuanic wrote, “With the new structure (US assets more than half of sales), CGC expects to be EBITDA and cash flow positive by late 2023 (capex will be minimal, with investments in BioSteel and negative operating cash flow in the Canadian rec unit, the main drag on cash flow). 

Sundial

The report stated that Sundial was working on various fronts to unlock value (SNDL trades at almost a 50% discount to management’s estimated book value per share of US$4.77). SNDL has C$250Mn of unrestricted cash (no debt), 820K sq ft of indoor cultivation in Canada, and 350 retail doors (liquor and cannabis). 

Aurora Cannabis

Aurora Cannabis is well-positioned in the German market. The report stated, “ACB expects to be EBITDA positive by end of this calendar year; it is in a net cash position (it continues to chip away at the convertible debt) and says it will use its equity facility for strategic purposes only (or reduce the convertible debt) and to fund operations.”

In Closing

The analyst said that most of the MSO management teams he met with felt the probability of SAFE passage in the lame-duck session has increased post the election. Zuanic added, “Most US companies recognized that M&A has taken a wait-and-see attitude ahead of the potential passage of SAFE, but most agreed that consolidation would accelerate without SAFE as several smaller operators will not be able to refinance their debts.”


StaffOctober 17, 2022
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4min7940

The Daily Hit is a recap of cannabis business news for Oct. 17, 2022.

ON THE SITE

Cantor Ranks Potential M&A Cannabis Targets

The cannabis M&A market may be on pause for now as companies cross their fingers for some sort of banking relief. “Uncertainty around SAFE Plus will probably delay M&A activity until after the lame duck session,” noted Cantor Fitzgerald analyst Pablo Zuanic. With the blowup of the Verano and Goodness Growth deal last week, Zuanic offered a look at what he thinks are potential targets for acquisition going into the fourth quarter. Read more here.

Neptune Wellness Gets Out of Cannabis Biz

Neptune Wellness Solutions (Nasdaq: NEPT) is selling its cannabis business to PurCann Pharma for C$5.15 million to be paid in cash. PurCann Pharma is a subsidiary of Groupe SiliCycle, a Quebec-based company with more than 27 years of experience with extracting and purifying active ingredients from natural biomass. Read more here.

Turning Point CEO Out After 10 Months, Guidance Lowered

Turning Point Brands (NYSE: TPB) appointed long-tenured company executive Graham Purdy as CEO and board director on Monday, replacing Yavor Efremov after he resigned as CEO and director. Efremov officially took on the mantle if CEO in January 2022. The company also lowered its guidance for 2022 sales, in conjunction with posting third-quarter financial results. Read more here.

Cautionary Tale of Local Control, Red Tape, and Too Few Cannabis Retailers

As it enters the final stages of development, New York state regulators may want to take heed of how California’s heavy-handed regulatory and tax approach to legal cannabis has led to an out-of-control underground market – at least if the East Coast wants to avoid a similar fate. Read more here.

IN OTHER NEWS

Flower One

Flower One Holdings (CSE: FONE) (FSE: F11), the Canadian parent company of a cannabis cultivator and producer in Nevada, authorized the Canadian company and its Canadian subsidiaries to seek protection from the Supreme Court of British Columbia pursuant to the Companies’ Creditors Arrangement Act. Flower One is seeking to appoint PricewaterhouseCoopers. as the court appointed monitor as it undergoes restructuring. Read more here.

Pacific Banking Corp

A cannabis-friendly banking firm is urging a California court to issue a stay on claims that it failed to pay taxes on behalf of one of its clients, resulting in millions in penalties, saying that because the CEO has been indicted and is now in federal custody, he cannot appear to testify at an upcoming hearing. Read more here.


StaffOctober 4, 2022
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6min9130

The Daily Hit is a recap of cannabis business news for October 4, 2022.

ON THE SITE

Cantor Gives Irwin Naturals a $7 Target Price

Cantor Fitzgerald analyst Pablo Zuanic initiated coverage on supplement company Irwin Naturals Inc. (OTC: IWINF) with an overweight rating and a $7 price target. The stock currently trades at roughly $1.58 per share. The shares are listed on the Canadian Securities Exchange (CSE), and with limited free float, but a NASDAQ listing is possible in the future. Read more here.

GOP Tries To Tie Cannabis To Suicide, Violent Crime

Archconservative Republicans and their network of influence have recently taken a staunch stand against the legalization of marijuana. The largest Congressional GOP faction affirmed its national position on cannabis, saying that it should remain federally prohibited and suggested adolescent consumption could be tied to suicide and violent crime with more studies. Read more here. Read more here.

Psychedelics Law Being Prepped For Florida

While Florida digs out of the extensive damage caused by Hurricane Ian, the business of lawmaking and regulation for the medical psychedelics industry continues, with the hope of quickening access to psychedelics for the large veteran population in the state and for others needing access to legalized mental health treatment in the state. Read more here.

Medical Marijuana Inks Asset Purchase Deal To Expand Hemp Footprint

Medical Marijuana, Inc. (OTC: MJNA) — formerly known as GRN Holdings — has entered into an agreement to purchase assets from a hemp and natural wellness company for an undisclosed amount. Bill Andreoli, the president of seller MFINITY Global will become the president of Medical Marijuana, Inc. subsidiary, Kannaway, LLC. Read more here.

Not Everyone Is A Fan Of Fast-Tracked Psychedelics

While the psychedelic renaissance continues to gather steam, there is a growing uneasiness about the pace of the industry development. The excitement has been fueled specifically by three events: the report of MDMA going into Phase 3 clinical trial, the final phase of research on the road to FDA approval; the development of legalized psilocybin programs in Oregon (Measure 109) and elsewhere in the country; and the movements to decriminalize certain psychedelics that now includes 20 states (or a local government within the state) either already decriminalizing or looking into doing it soon. Read more here.

IN OTHER NEWS

Bright Green Corporation, Alterola Biotech Inc.

Bright Green Corporation (NASDAQ: BGXX), a company selected by the U.S. government to grow, manufacture, and sell cannabis and cannabis-related products for research, pharmaceutical applications and affiliated export, today announced that it has completed its previously announced strategic partnership and acquisition of 25% of the issued and outstanding common stock of Alterola Biotech Inc. (OTC PINK:ABTI), a U.K.-based pharmaceutical company focused on developing cannabinoid and cannabinoid-like medicines and products, for total consideration of $4 million. Read more here.

Biopharmaceutical Research Company

Biopharmaceutical Research Company, an active Drug Enforcement Administration (DEA) pharmaceutical cannabis license holder, announced the completion of a $20M Series A fundraise. This will enable the company to aggressively scale its operations and increase its product offering, conduct sponsored research, and execute on its go-to-market strategy. The round is being led by Intrinsic Capital Partners, with participation from Argonautic Ventures, Achari Ventures, AFI Capital Partners, Delta Emerald Ventures, Self Health America (SHAC) and a number of preeminent family offices. Read more here.

Decibel Cannabis Company Inc., Breath of Life International Ltd.

Decibel Cannabis Company Inc. (TSX-V: DB) (OTCQB: DBCCF), a cannabis producer, announced it has secured an on-going supply agreement with Breath of Life International Ltd. to launch Decibel’s Qwest brand and cannabis products in Israel. The supply agreement is for $4.8 million of premium cannabis product, with the first shipment expected in the fourth quarter. Read more here.

Sweet Leaf Madison Capital

Sweet Leaf Madison Capital, a nationwide provider of tailored debt financing solutions for the middle-market cannabis industry, today announced the closing of a loan for $207,000 to Koach Enterprises, a cannabis startup in California creating a high-end brand through vertical integration. The funds will be used to purchase energy-efficient, top-of-the-line LED grow lights from Spectrum King LED. Read more here.


Adam JacksonSeptember 19, 2022
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Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) said that it acquired a 55% stake in Four20 Pharma, a top five German producer and distributor of medical cannabis in the European Union.

The deal is worth €19.7 million or approximately $19.7 million, according to SEDAR filings.

“We are pleased to complete the transaction with Four20 Pharma and I am personally thrilled to welcome Torsten and Thomas to the Curaleaf family,” said Curaleaf executive chairman Boris Jordan. “Our early focus on Europe has given Curaleaf a formidable strategic asset and strong foundation in one of the industry’s critical global markets.

Four 20 Pharma is one of the largest operators in Germany, having captured more than 10% market share. The company employs 41 team members and is based in Paderborn, Germany.

The allure of Germany’s nascent industry has captured the interests of the largest cannabis corporations, especially as U.S. legalization stalls while adult-use consumption in Germany is slated to roll out in early 2024.

“Curaleaf is the only U.S. MSO uniquely positioned to capitalize on the opportunity,” Jordan said.

Curaleaf said that the deal provides the company a strategic pathway to acquire complete control of Four 20 Pharma by 2026.

“Four 20 Pharma is an ideal asset to accelerate our growth in Germany as the country readies for its conversion from medical cannabis to adult-use,” said Miles Worne, president of Curaleaf International — which already happens to be the largest vertically integrated cannabis company in Europe.

“Curaleaf International continues to build our platform in eight markets, and this deal further underscores our aspiration to be a major player in the European market and the global industry leader,” Worne said.

Though Germany’s adult-use program is still in its infancy, Cantor Fitzgerald analyst Pablo Zuanic wrote in a report last month that sales could begin in early 2025.

Zuanic posited that the actual commencement of sales may be more dependent on whether imports are allowed — “a big if,” he added — or if only domestic production will end up ultimately supplying the German recreational market. Canada, the only G-7 recreational market, does not allow imports.

“If imports are allowed (more likely from within the EU only, at first, at least), we think sales could begin as soon as early 2024 (assuming potential exporting countries enact rules that allow the export of rec cannabis),” he wrote.

The currently existing medical marijuana market — which began in 2017 — has been slow to materialize, he added, with only €300 million in sales as of the report’s August publishing.

Curleaf estimated that the German market could be worth upwards of €1 billion by the end of the first year of legalization.


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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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