It’s time for your Daily Hit of cannabis financial news for April 16, 2019.
On The Site
Horizons ETFs Management (Canada) Inc. said that it has filed its final prospectus to launch the Horizons US Marijuana Index ETF. Units of the exchange-traded fund have been conditionally approved for listing by the NEO Exchange and are slated to begin trading on April 18, 2019, under the ticker symbols HMUS (Canadian dollar units) and HMUS.U (U.S. dollar units).
The company said that HMUS will be the first ETF in the world that is solely focused on providing exposure to companies with significant business activities in, or significant exposure to, the United States marijuana or hemp industries. HMUS is an index ETF, which seeks to replicate, to the extent possible, the performance of the US Marijuana Companies Index, net of expenses.
For the first time since Colorado legalized adult-use cannabis in 2014, the holiday 4/20 will fall on a Saturday. To celebrate the occasion, the cannabis data intelligence firm Headset has partnered with Nielsen to release a report detailing how consumers respond to the annual holiday.
“No matter how you participate in the cannabis industry, you should pay attention to 4/20,” reads the report. “It is consistently the single biggest day in cannabis each year, with at least double the sales of an average day.”
Advertising in the cannabis industry is difficult. In most U.S. states where cannabis is legal, rules regarding cannabis advertising are complicated and extremely restrictive. For example, in California, businesses can only run ads in areas where “71.6 percent of the audience is reasonably expected to be 21 years of age or older.” The advertising landscape online is even far less forgiving. Most online ads platforms, such as Google Ads or Facebook Ads, explicitly prohibit the advertisement of cannabis products.
In the absence of reasonable advertising regulations for the cannabis industry, many business owners have turned to a new and rapidly growing form of advertisement: Social Media Influencers.
In Other News
National Access Cannabis Corp. (TSXV: META), the largest private retailer of recreational cannabis in Canada, today announced its financial results for the second quarter ended February 28, 2019. Q2-2019 total revenue of $16.2 million represents a 328% increase versus prior quarter total revenue. The company also delivered a net loss of $5.6 million for the quarter.
Innovative Industrial Properties, Inc. (IIPR) closed on the acquisition of a five-property portfolio in southern California, which comprises approximately 102,000 square feet of industrial space. This acquisition marks IIPR’s second investment in California, following on IIP’s acquisition in Sacramento earlier this year.
The purchase price for the southern California portfolio was approximately $27.1 million in the aggregate. In addition to the purchase, IIPR entered into a long-term, triple-net lease at each property with a licensed operator, which intends to continue to operate the properties as licensed cannabis cultivation, manufacturing, processing and distribution facilities in accordance with California regulations.
Acreage Holdings, Inc. (CSE: ACRG.U) and Form Factory, Inc. announced the closing of the merger that was previously announced on December 6, 2018 in which Acreage acquired all of the issued and outstanding shares of Form Factory.
According to the terms of the merger, Acreage issued 6.280 million subordinate voting shares at a deemed value of $25.00 per share. The transaction brings Form Factory’s expertise as a one-stop-shop to develop, manufacture, and distribute cannabis products of any form factor to Acreage’s 19-state footprint of cannabis-based consumer and medical products. It sets the stage for Acreage to become the first national cannabis Consumer Packaged Goods (CPG) company, capable of creating and distributing predictable and scalable proprietary brands nationally, delivering those capabilities on a contract basis to other cannabis brands, and offering a turnkey cannabis industry solution to traditional non-cannabis CPG companies such as Nestle, Mars or Procter & Gamble.
iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQX: ITHUF) announced that CBD For Life, a top-ranked, national CBD brand in the U.S. which the company agreed to acquire on March 29, 2019 has entered into an agreement with Urban Outfitters, a lifestyle-oriented general merchandise and consumer products store with 245 locations throughout the United States, Canada and Europe. The agreement places CBD For Life products in Urban Outfitters’ e-commerce platform and top 6 retail locations in the U.S. The CBD For Life products are expected to launch in the select Urban Outfitters stores later this month.
Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) completed an all-cash acquisition of Spain-based licensed cannabis producer Cáñamo y Fibras Naturales, S.L. The acquisition lays the foundation for Canopy Growth to expand its European production footprint into one of the most ideal growing regions in the world, complementing the Company’s existing 430,000 square foot licensed production site in Odense, Denmark, as well as its world-class ISO 13485 internationally certified Storz and Bickel facility in Tütlingen, Germany.