stocks Archives - Green Market Report

Debra BorchardtDebra BorchardtJuly 29, 2019
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5min4720

Nextleaf Solutions

Extraction technology company Nextleaf Solutions Ltd. (CSE: OILS) (OTCQB: OILFF)  said that its common shares will begin trading today on the OTCQB Market. Nextleaf will trade on the OTCQB under the symbol “OILFF” and the company’s common shares will continue to trade on the Canadian Securities Exchange under the symbol “OILS”. Nextleaf owns a portfolio of issued and pending patents pertaining to the company’s unique, industrial-scale process of extraction and purification of cannabinoids.

“We are excited to begin trading on the OTCQB which will improve liquidity and allow us to introduce Nextleaf – the first public company to be issued multiple U.S. patents for the industrial-scale extraction and purification of THC and CBD – to a broader audience of U.S. institutional and retail equity investors,” said Paul Pedersen, CEO and Co-founder of Nextleaf Solutions. “Listing in the United States on the OTCQB is an important step for Nextleaf as we build on our vision to revolutionize extraction and purification with superior throughput, yield, and purity to enhance cannabis oil economics across the globe.”

CannBioRx

Special Purpose Acquisition Company (SPAC) KBL Merger Corp. IV (NASDAQ: KBLM) signed a definitive agreement for the merger of a wholly-owned subsidiary of KBLM with CannBioRx Life Sciences Corp., a drug development company focused on treating inflammatory diseases. It began trading last Friday as a NASDAQ-listed cannabis biotech.

CannBioRx said in a statement that it has three synergistic programs that operate at the intersection of the biotech and cannabis industries:

  • A clinical-stage program focused on the discovery and development of novel therapies to treat fibrosis. This fully enrolled Phase 2b program expects results in Dupuytren’s disease during the fourth quarter of 2020.
  • A preclinical cannabinoid program focused on the development and commercialization of unique pharmaceutical-grade cannabinoids for arthritis, pain, diabetes, and obesity.
  • A preclinical program developing innovative, orally available therapies harnessing the brain’s nicotinic receptors to treat inflammatory diseases, such as ulcerative colitis, gout, and multiple sclerosis.

“These three unique programs will enable us to efficiently target several key pathways in inflammation and capitalize on two decades of extensive scientific research on the relationship between cannabinoids and inflammation,” said Prof. Sir Marc Feldmann, Founder, and Co-Chairman of CannBioRx. “We believe that the use of synergistic combination therapies across our programs could be important for providing cost-effective healthcare in the future. We also believe that creating an entity and robust pipeline in each of its programs diversifies our risk. We are a global company comprised of senior scientists affiliated with OxfordStanford and Hebrew Universities. We intend to not only advance drug development and clinical trials for existing programs but also to identify new patent-protected compounds, including novel cannabinoids that expand our therapeutic impact in the industry.”

“Upon the completion of the transaction, we expect to be one of a limited number of NASDAQ-listed companies developing non-plant-touching, pharmaceutical-grade, non-psychoactive cannabinoids. These drugs are intended to provide safer, uniform dosing, according to regulatory agency standards,” added Dr. Marlene Krauss, CEO of KBLM, who will also assume the role of CEO of the combined company. “We believe that CannBioRx’s distinctive position is enhanced by the fact that the cannabinoid program is being developed in tandem with its other novel drug development programs that are also focused on inflammation. The programs range from pre-clinical programs to a program in a Phase 2b clinical trial. This could potentially provide us with a pipeline of drug candidates in sequential stages of development and addresses what we believe to be large untapped markets.”


StaffStaffMay 24, 2019
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10min5660

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.

 


AxisWireAxisWireMay 22, 2019
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5min3230

Cannabis Stocks Opened on a High Note First Quarter With 40% Index Growth

New York City – May 22, 2018 /AxisWire/ The Green Market Report (GMR), the cannabis industry’s most trusted source for credible in-depth financial and economic reporting, today released its 2019 Cannabis Company Index Q1 Summary Report. The report can be downloaded at GreenMarketReport.com/Reports.

The GMR Index follows the trading activity of 30 selected public cannabis companies that denote market dominance. The Company Index started 2019 on a high note as the first quarter jumped 40% and essentially recovering from the dismal fourth quarter of 2018. The broader stock market sold off at the end of the year and it took cannabis stocks along for the ride into the red territory. While the Farm Bill passage in December set the stage for stocks in the first quarter, Congress wasn’t through waving a green flag for the cannabis industry. . At the end of March, The House Financial Services Committee voted 45 to 15 to advance the Secure and Fair Enforcement (SAFE) Banking Act.

Despite all the positive news flowing through the cannabis industry, high profile lawsuits also reminded investors that the cannabis industry isn’t as mature as others. International markets are opening up to import and export. And U.S. exchanges are playing with Canadian companies while avoiding American ones.

“2019 is off to a good start for cannabis companies. Many stock valuations have recovered from the late 2018 selloff as the government seemed to soften its approach towards cannabis ,” stated Debra Borchardt, CEO of Green Market Report.

The best performing stock in the GMR Index was Origin House followed by The Green Organic Dutchman, who was the biggest loser last quarter. The biggest loser in the GMR Index was AeroGrow International.

The Index decided to add SLANG Worldwide Inc. and TILT Holdings Inc. While the Index was sad to let AeroGrow go, although it is the smallest of the publicly traded companies, as well as MedMen amid all of their legal woes.

“SLANG Worldwide has so many positives going for it. This was an easy name to add to the Index,” added Borchardt. “TILT Holdings though surprised the market with a large write down shortly after being added to the Index. We’ll monitor the stock closely.  .”

About Green Market Report:

The Green Market Report (GMR) is headquartered in New York City with an office in Los Angeles. GMR is poised to be the center for trustworthy business, financial and economic news and intelligence. The site offers coverage on financial matters including news briefs on business, cultivation, and extraction, cannabis company stock prices, and wholesale cannabis pricing. For more information, please visit www.greenmarketreport.com or email info@greenmarketreport.com. Follow us on Facebook, Instagram and Twitter @GreenMarketRpt.

Communications Contact:

Cynthia Salarizadeh

Green Market Report

856-425-6160

cynthia@salarmediagroup.com

 


StaffStaffMay 22, 2019
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7min3960

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.

 


StaffStaffMarch 26, 2019
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8min8550

Under-the-radar U.S. MSOs are the best cannabis stocks to invest in

By WAYNE DUGGAN, InvestorPlace Contributor

Cannabis stocks have gotten a lot of attention on Wall Street in the past year after a handful of popular Canadian growers started hitting the U.S. markets. U.S.-listed names like Canopy Growth Corp (NYSE: CGC), Tilray (NASDAQ: TLRY) and Aurora Cannabis (NYSE: ACB) get most of the publicity.

However, OTC-traded stocks Curaleaf Holdings(OTC: CURL), Medmen Enterprises (OTC: MMNFF) and Green Thumb Industries (OTC: GTBIF) could be the best cannabis stocks to invest in.

Path To Legalization

In a new report, Roth Capital Partners analyst Scott Fortune says the cannabis industry has major long-term potential for investors. However, given the massive gains in the most popular stocks in the past year, near-term upside may be limited. Instead, Fortune says the best risk-reward skew in the cannabis space is with U.S. multi-state operators.

“In our view, the most promising public companies — i.e., those whose stocks possess the most attractive risk/reward profiles — are the U.S.-based MSOs — which are assembling dominant positions in the most lucrative U.S. states,” Fortune says.

Today, these operators are technically violating federal law, which classifies marijuana as a Schedule 1 drug. That classification also keeps these cannabis stocks from listing on the NYSE or Nasdaq exchange. However, Fortune says the STATES Act could be a game-changer for MSOs. The STATES Act wouldn’t legalize cannabis on a national level. However, it would exempt companies and individuals from federal enforcement of marijuana laws when inside states with conflicting laws.

This legislation would continue the U.S. along the path toward federal legalization and would embolden MSOs to continue to expand their operations. Fortune says once the legalization damn breaks, the financing flood waters will rush in.

“Federal protection, albeit illegal, has allowed creative risk-taking entrepreneurs (MSOs) to quickly gather valuable assets ahead of an eventual large influx of capital investments,” he says.

Huge Opportunity for Cannabis Stocks

Roth estimates the $11 billion U.S. cannabis market will more than double in size — to $23.4 billion — by 2022. Ultimately, federal legalization will expand that market to at least $59 billion in size, Fortune says.

In the long term, Fortune says the social stigma of cannabis will wear off. Eventually, the drug could have a market penetration similar to alcohol today. Roughly half the adult population in the U.S. drinks alcohol. At that penetration rate, the U.S. cannabis market could eventually approach $200 billion. As of early 2019, the top 10 MSOs had a combined market capitalization of around $20 billion. Fortune says that combined market cap could balloon to around $911 billion by 2023.

Best Cannabis Stocks to Invest In

Fortune says the STATES Act will not only help eliminate cannabis marginalization, but it will also be a huge catalyst for MSOs. Banks located in states where cannabis is legal could be emboldened by the STATES Act and begin to finance cannabis ventures more freely. Investors will certainly see this access to capital as a bullish development. Fortune says MSO valuations could get a big boost as a result.

The largest MSO in the U.S. today is Curaleaf, which operates in 12 different states. Curaleaf has a market cap of around $4.6 billion. CURL operates 35 dispensaries, 10 processing operations, and 12 cultivation sites.

The next largest U.S. cannabis MSO is Green Thumb Industries. Green Thumb operates in 9 states and has 9 manufacturing locations and 61 retail stores. GTBIF’s market cap is around $3.1 billion.

Finally, the third largest MSO stock is MedMen, which also operates in 12 states. MMNFF has roughly a $1.6 billion market cap. The company has licenses for 76 retail operations and 16 cultivation and processing sites.

In addition to the potential for organic growth among MSO cannabis stocks, the industry is consolidating at a rapid pace. Any of these three stocks could be big buyers or even targets for larger companies in the years ahead.

There’s certainly a lot to like about cannabis stocks and the cannabis industry. But investors should be careful about the buying frenzy that has taken place among the most popular names. While U.S.-listed stocks get all the publicity, CURL stock, MMNFF stock and GTBIF stock may be the cannabis stocks with the most upside.

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

 


William SumnerWilliam SumnerFebruary 22, 2019
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3min8580

The cannabis industry continues to catch the attention of institutional investors in the United States. Earlier this week, Seaport Global, released a lengthy report analyzing the global cannabis market and initiating coverage on over a dozen of the industry’s leading cannabis firms.

With offices in both New Orleans and New York, Seaport Global is a full-service investment bank that offers capital markets advisory and research services.

“We are formally launching coverage of the global cannabis space. This exciting market area is evolving quickly, with hundreds of public companies coming to market in recent years. There is clear momentum behind the legalization of cannabis, around the world. We expect many countries, including the US, to go legal within the next handful of years, and we think that this will create a considerable forward opportunity for the burgeoning industry that is regulated, legal cannabis,” reads the report.  “From a little over $12B in global value today, we see the market ultimately evolving to almost $630B in due time.”

Looking forward, the report projects that the cannabis market will diverge into two distinct markets, a retail dispensary model centered around the adult use market and a medicinal model offered through traditional channels.

Seaport is initiating coverage on Canopy Growth Corp. (NYSE: CGC), Tilray (NASDAQ: TLRY), and Aurora Cannabis (TSX: ACB) with a neutral rating. Curaleaf Holdings (CSE: CURA), Green Thumb Industries (OTC: GTBIF), iAnthus Capital (OTC: ITHUF), KushCo Holdings (OTC: KSHB), and MedMen Enterprises (OTCL MMNFF) were given Buy ratings. Seaport’s top picks were Hexo Corp. (NYSE: HEXO), Aphria Inc. (NYSE: APHA), Acreage Holdings (OTC: ACRGF), and Green Organic Dutchman (OTC: TGODF).

In addition to initiating coverage on the leading cannabis companies, the report also provides an in-depth analysis of the global cannabis market; including market size, legal status, a supply chain diagnostic, regulatory information, projected market size for 106 countries, and an examination of the market dynamics between the U.S. and Canadian market.

The report also provides a 50-state profile which includes political and regulatory information, a breakdown between the medical and adult use market, weekly spot margin calculations, an examination of the hemp-CBD market, and a segmented rundown of over 100 public cannabis companies.

The 208-page report is available online to clients of Seaport Global.


StaffStaffFebruary 8, 2019
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7min8120

A number of cannabis companies have gone public over the last several years, with the majority listed on a small exchange in Canada called the Canadian Securities Exchange (“CSE”). Many have done so via reverse takeover — a merger transaction in which a private company acquires a public shell company, merges into it, and then takes it over and changes its name — rather than resorting to an initial public offering, a more common practice in which a private company sells shares to the public and is then listed on a public exchange.

There are a number of reasons why companies choose to go public, including:

Fundraising: It enables companies to raise large(r) amounts of capital from external investors.

Publicity: Going public is a watershed moment, raising a company’s profile among investors, customers, competitors, and the general public.

Credibility: Becoming and being a public company is somewhat of a status symbol. It shows that you’ve “made it” and can handle the rigorous disclosures and transparency required by investors and regulators.

Liquidity: It allows longtime employees and investors to “take some chips off the table” by monetizing some or all of their holdings.

Currency: Public stock can more easily be utilized for acquisitions.

These last two aspects, liquidity, and currency were analyzed for the 30 largest CSE-listed companies with U.S. operations (and compared against a group of 30 U.S.-listed micro-cap biotech, brewing, vitamins/supplements, and natural food companies) to assess the benefits of these listings.

As you can see in the chart below, there is a meaningful lack of liquidity for the CSE-listed companies. The comparable stocks have nearly three times the average daily trading volume of the CSE-listed cannabis companies. Also, there is a long “tail” with the CSE-listed stocks. The overwhelming majority have extremely thin volume — some had days where literally zero shares were traded — with just a handful garnering meaningful volume.

When a company is doing a follow-on equity offering, the sizing is important. If a company sells too much stock relative to daily trading volume, it risks flooding the market and driving down the stock price. A sanity check also occurs, looking at how many days of trading it would take for all the newly sold shares to trade. Five to 10 percent is the norm, though higher levels are also possible. Given the thin trading, the ability to do a block trade (selling a large lot of shares to a third party) is also limited. In an M&A situation, this matters a great deal – the seller becomes largely “stuck” in the company and can’t easily monetize their holdings. In fact, when one looks at several of the recent all-stock acquisitions, it appears as if it will take years for the sellers to convert their shares into cash.

Any company contemplating listing on the CSE or another foreign exchange should consider pursuing status as a “foreign private issuer” and how that may impact liquidity. There are some substantial potential benefits to being a foreign private issuer, including faster market access and less onerous reporting requirements. But maintaining foreign private issuer status can create additional liquidity concerns for some shareholders.

A foreign private issuer must either have the majority of its voting stock held by non-U.S. residents or operate outside the U.S. The only option for U.S.-based cannabis companies is to ensure the majority of voting stock is held by non-U.S. residents. Determination of what the majority of voting stock means can be based on either voting power or a quantitative number of shares.

Companies often create a class of super-voting, super-conversion compressed preferred stock that is exchangeable into publicly traded common shares. The preferred stock class — sometimes called Class A stock, but naming conventions vary from company to company — can be set up so that, on a converted basis, the holders of the preferred stock have the same economic and voting rights they would have had if they held common stock instead. But a company must usually impose conversion restrictions to ensure foreign private issuer status is maintained. If too many people convert at the wrong time a company can lose its foreign private issuer status.

Anyone receiving compressed shares should carefully review the terms of such stock so they can be aware of when and how they can convert into freely trading common stock. It may not always be possible to freely convert such preferred stock and the preferred stock may not be as easy to sell as the common stock, creating another potential liquidity issue that should be managed up front.

David Lechner is a Chief Financial Officer with $25 billion of M&A and capital markets work. He consults with clients on due diligence, acquisitions, integrations, financial reporting, and operational improvements. Originally from Toronto, he now resides in Denver with his family.

Charles Alovisetti is a partner and chair of the corporate practice group at Vicente Sederberg LLC based in Denver. He assists licensed and ancillary cannabis businesses with corporate legal matters, and he has experience working with clients on a broad range of transactions.


William SumnerWilliam SumnerMay 16, 2018
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5min6670

After a rocky start at the beginning of the year, the North American Marijuana Index is starting to show some signs of a recovery. The index, which tracks the top performing cannabis stocks in the United States and Canada, tumbled precipitously in January of this year after the Department of Justice announced that it would rescind the Obama-era Cole Memorandum, which provided guidance for the legal cannabis industry to avoid coming under the scrutiny of federal prosecution.

Companies hoping to become listed on the North American Marijuana Index must have a market cap of at least $80 million, a minimum daily trading volume of $2 million, and a share price of at least $1.00. Companies with a revenue of $5 million are exempt from the trading criteria.

In the month of April, the North American Index gained 3%, led primarily by the huge gains in the U.S. market. The U.S. Marijuana Index gained approximately 19% in April; six companies on the index gained 20% or more and another ten companies gained more than 10%.

The average trading volume on the U.S. Index also increased by 77%, compared to the previous month.

The gains were realized following news that former U.S. Speaker of the House John Boehner had reversed his position on medical cannabis and joined the advisory board of the medical cannabis company Acreage Holdings, which operates in 11 U.S. states, along with former Massachusetts Gov. Bill Weld. In the days the following Boehner and Weld’s announcement, the U.S. Index increased by 25%.

While the U.S. Marijuana Index was experiencing an upswing, the Canadian Marijuana Index was starting to get a taste for the downswing. Although recreational cannabis sales are set to become legal in Canada later this summer, the Canadian Marijuana Index decreased by 9%.

Likewise, the average trading volume of constituents on the Canadian Marijuana Index decreased by 16%. Approximately 80% of the companies listed are currently in the red, with only a few outliers outperforming expectations. Two such outliers were MedReleaf (LEAF) and WeedMD (WMD), which both gained 20% in April.

Unsurprisingly, the top three gainers in the month of April were companies listed on U.S. market while the top three losers were Canadian companies.

General Cannabis Corp. (CANN) led the pack with a 96% APR return and $4.5 million USD in trading volume. Following General Cannabis Corp. was CV Sciences (CVSI), which generated a 60% APR return and volume of $889,000. Rounding out the top three gainers was Surna Inc. (SRNA), which had a 31% APR return and a volume of $180,000.

For this month’s top three losers, Hiku Brands (HIKU) was hit the hardest with a -36% APR return and a volume of $1.2 million. Next was Isodiol International Inc. (ISOL), which had a -25% APR return and a volume of $3.1 million. In third place for the top three losers this month was CanniMed Therapeutics Inc. with an APR return of -21% and a volume of $1.3 million.

The most active cannabis company in April was Canopy Growth Corporation (WEED), with a volume of $117 million and an APR return of -11%. The second most active cannabis company was also Canopy’s closest competitor: Aurora Cannabis (ACB). Aurora had an APR return of -13% and a volume of $69.3 million. The biopharmaceutical company GW Pharmaceuticals (GWPH) was the third most active in April, with an APR return of 18% and a volume of $65.4 million.


William SumnerWilliam SumnerApril 24, 2018
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3min30380

Today, MJIC Inc. announced that it had completed its quarterly rebalancing of the U.S. and Canadian Marijuana Index. Adding four companies in total, the company added General Cannabis Corp. (CANN) and Liberty Health Sciences (LHSIF) to the U.S. Index and added Hiku Brands Company Ltd. (HIKU) and Isodiol International Inc. (ISOL) to the Canadian Index.

Liberty Health Sciences is a medical cannabis company that has been expanding considerably in states like Florida. Earlier this year, the company closed the acquisition of a 387-acre parcel of land that will serve as a medical cannabis greenhouse and processing facility.

As a holding company, General Cannabis offers a multitude of services to the cannabis industry through its various subsidiaries. Most recently, the company was able to pay down the remainder of its outstanding debt and its client Green Leaf Medical successfully harvest its first crop.

Hiku Brands is a vertically integrated cannabis company with a focus on high-end cannabis brands, such as its wholly owned subsidiary Tokyo Smoke. Earlier this year the company was added to the Green Market Report Cannabis Index. Most recently the company acquired the medical cannabis producer/distributor WeedMD.

Isodiol International Inc. specializes in CBD-based products. In recent months the company has taken vigorous steps to establish a foothold in both international and domestic markets. Currently, the company has commenced the development of an organic hemp processing facility for the extraction of CBD and terpenes in China.

Since the previous quarter, the minimum trading requirements for companies to become listed on the Marijuana Index have increased. Companies must now reach a weighted average minimum market capitalization of $80 million USD, the daily trading volume of $2 million USD, and a share price of at least $1.00 USD. Companies can be exempt from the trading requirements if they have a revenue over the previous year of at least $5 million USD.


Debra BorchardtDebra BorchardtApril 6, 2018
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5min30650

The OTC Markets Group, which is home to most cannabis stocks, is taking the lead on identifying stock promotions for its investors. Stock promotion isn’t illegal. What is illegal is not being transparent about it.

Microcaps or penny stocks are especially susceptible to these types of manipulations because information on these companies can often be limited. In 2014, the SEC charged four people with manipulating stock prices for GrowLife Inc and Hemp Inc.

The OTC Markets has employed various tactics to help investors like what it calls the “blunt club” or the skull & crossbones icon that warns the market of bad behavior. However, the OTC doesn’t have the power to engage in disciplinary measures which falls to the SEC. The SEC though doesn’t move very quickly and even if it is investigating a company or person, that information is rarely made public. The OTC believes it can at least react more quickly and warn investors of questionable activity.

In its latest action, the OTC has set up a “Promotion flag” to warn market participants that the trading could be under suspicion. “For market forces to work, it’s got to be about providing more information so investors can make the right decisions,” said Cromwell Coulson Chief Executive Officer of the OTC Markets Group. “The companies have a responsibility to immediately address information regarding trading rumors. We’ve removed issuers because they weren’t truthful about sponsoring promotions.”

Investors can check this page for a list of companies that have recently paid for stock promotions. For example, Hemp Americana (HMPQ) appears on this list and also has a skull and crossbones icon. On the company Overview page under the Caveat Emptor designation, there is now a megaphone icon underneath that says stock promotion.

The process relies on mostly human observation, with either the OTC team spotting the behavior or an investor bringing it to their attention. “The job of the market is to sniff out what’s true and false,” said Coulson, “In the long term, it usually comes out. In the short term? Not so much.” Coulson said the OTC was pushing for changes to the rule called 17-B around anonymously paid promotions.

The SEC also warns about press releases announcing events that never happen or contracts that never get finalized. Other behavior in stock promoting companies that issue a lot of shares without a corresponding increase in assets. The SEC said in a statement, investors should exercise extreme caution if there appears to be more promotion of the company’s stock versus its actual products. It also said that guaranteed high investment returns, “limited time” stock promotions and unsolicited stock recommendations.

Investors are also warned not to feel more comfortable if the promoter suggests you buy the stock through your own brokerage account. Your purchase may be their “sell.” The SEC wrote, “Even if you do not give the promoter any money directly, your stock purchases may enable the organizers of the promotion to offload their otherwise valueless shares.”

In addition to the promotion flag, the OTC has added a shell-risk flag. This icon identifies whether a company is a shell as defined by the SEC. “The term shell company means a registrant, other than an asset-backed issuer as defined in Item 1101(b) of Regulation AB that has: (1) No or nominal operations; and (2) Either: (i) No or nominal assets; (ii) Assets consisting solely of cash and cash equivalents; or (iii) Assets consisting of any amount of cash and cash equivalents and nominal other assets.”

“Over-valuation is the biggest risk,” said Coulson. “It happens even with electric car companies. With small companies, we need to build markets to fit .”



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