It’s time for your Daily Hit of cannabis financial news for May 14, 2018.
On The Site
Canadian-based medical marijuana company Canopy Growth (TWMJF) announced that it has applied to the New York Stock Exchange (ICE) to list its shares. The company said that it expects to begin trading at the exchange by the end of May using the ticker symbol CGC. The company currently trades in Canada on the Toronto Stock Exchange using the symbol WEED and also on the OTC Markets with the symbol TWMJF. The New York Stock Exchange has been reluctant to engage with cannabis companies citing the legality of marijuana in the United States, although a handful of entities like Innovative Industrial Properties (IIPR) and India Globalization Corp. (IGC) have squeaked in. It seems Canadian-based companies pass the smell test since marijuana is legal in that country.
In other news, Canopy said that it planned to acquire 33% of BC Tweed Joint Venture Inc., which are the shares that it didn’t already own. That deal is expected to close in July and as a result, Canopy said it will issue $374 million worth of its common stock.
After denying rumors last week about a potential acquisition, Aurora Cannabis (ACBFF) announced that it was entering an agreement to acquire MedReleaf (MEDFF) in a deal valued at C$3.2 billion. The acquisition brings together two leading producers in Canada’s medical marijuana community enabling them to deliver a capacity of over 570,000 kg of cannabis a year. MedReleaf is known for its ability to reduce the cash cost per gram while still delivering a premium product, Aurora is equally known for its automated greenhouses and low production costs.
According to a company statement, MedReleaf shareholders will get 3.575 common shares of Aurora for each share they own of MedReleaf. The statement read, “Upon completion of the transaction, existing Aurora and MedReleaf shareholders would own approximately 61% and 39% of the pro forma company, respectively, on a fully diluted basis. The Exchange Ratio implies a price of C$29.44 per MedReleaf common share and a premium of approximately 34%, based on the 20-day volume weighted average prices of Aurora and MedReleaf common shares on the Toronto Stock Exchange as of May 11, 2018 .”
In Other News
iAnthus Capital Holdings
After the market closed on Monday, iAnthus Capital Holdings (ITHUF) announced that it received a $50 million investment from Gotham Green Partners, which management believes to be the largest investment to date by a single investor in a publicly traded U.S. cannabis operating company. The company plans to allocate the proceeds of this financing by repaying $20 million of a one-year note and accrued interest to VCP Bridge LLC, continued cultivation and dispensary build-outs in New York and Florida markets and potential expansion activities consistent with iAnthus’ strategic objectives.
Gloucester Street Capital
Gloucester Street Capital, an owner of one of only 10 medical cannabis cultivation and dispensary licenses in New York State, has closed a $6.5 million growth capital round. Viridian Capital Advisors, through its broker-dealer Pickwick Capital Partners, LLC, served as the placement agent for the Company.
General Cannabis (CANN) announced first quarter financial results with revenues of $942,482, a 31% increase over 2017 first quarter revenues of $719,105. The stock fell over 2% as the net losses rose 70% year over year to $4.4 million versus last year’s net loss of $2.6 million.
“We continue our focus on organic growth and driving each business segment to profitability,” said Joe Hodas, Chief Operating Officer of General Cannabis. “We have an aggressive, but achievable, plan to grow revenue in each of our existing business segments, while also evaluating opportunities for operational efficiencies. Hodas continued, “While California’s regulated market’s rollout has been slower than anticipated, we made great progress in the quarter developing several key relationships that we believe will generate revenue for both our Security and Operations segments in the second quarter and throughout 2018.”
Emblem Corp. (EMMBF) and Canntab Therapeutics Limited (CSE: PILL) announced the receipt of Health Canada approval for research and development activities on oral sustained release formulations of cannabinoids, which are the proprietary products conceived by Canntab representing significant progress in Emblem and Canntab’s partnership to develop long-acting cannabis formulations.
Cannabis Wheaton Income Corp.
Cannabis Wheaton Income Corp. (CBWTF) announced that it entered into a definitive licensing agreement with Dixie Brands, Inc. pursuant to which Cannabis Wheaton will have the exclusive license to Dixie’s intellectual property, product branding and formulation methodologies related to over 100 cannabinoid-infused products in Canada and Mexico.