It’s time for your Daily Hit of cannabis financial news for January 24, 2022.
On the Site
The battle between Ascend Wellness (OTC: AAWH) and MedMen Inc. (OTC: MMNFF) is getting messier by the day. The latest shot is coming from MedMen whose counterclaim alleges that Ascend’s CEO Abner Kurtin used political influence with New York Governor Kathy Hochul and was shortly thereafter able to obtain an email saying the license transfer from MedMen to Ascend was approved.
MedMen says in its countersuit that on December 28th, Richard Zahnleuter the General Counsel of the Office of Cannabis Management (which supports but does not direct the Cannabis Control Board) contacted MedMen to say he might need up to 60 days to finish its review. However, MedMen also said that Zahnleuter emailed the following evening saying that the December 16th email did give the “final” approval for the deal. Making things even more complicated, MedMen says it spoke with Zahnleuter on the phone who said he had been “pressured” to send the email saying the December 16th email gave final approval. Zahnleuter would not disclose to MedMen who had pressured him.
Cannabis banking provider Dama Financial has entered into an agreement to acquire GrowFlow Corp. for an undisclosed amount. GrowFlow is a business management and compliance company that has processed more than $3.3 billion for cannabis retailers, cultivators, processors, and distributors. The deal is said to be planned to close this quarter.
An emerging trend in some bioscience startups is the development of both cannabis and psychedelics products. One such company is Enveric Biosciences, headquartered in Naples, Florida, which hopes to leverage psychedelics-derived molecules for the mind and create synthetic cannabinoids for the body in the treatment of cancer. Enveric Biosciences focuses on synthesizing novel, tailored and highly differentiated derivative molecules based on classic psychedelics such as psilocybin, N,N-dimethyltryptamine (DMT), mescaline and MDMA.
The legalization of cannabis is already off to a rough start in the state of Texas. The state legalized medical marijuana, but the program is so restrictive that only a handful of dispensaries exist with roughly 16,00 registered patients. 500 physicians have been approved to prescribe medical marijuana in the state. Texas is also a big agricultural state and the appetite for hemp farming seems stronger than the desire for medical marijuana. It’s also sparking some bad behavior by Texans in and out of the state. This week, Law360 reported that Todd Smith, a political consultant for Texas Department of Agriculture Commissioner Sid Miller, was indicted on soliciting bribes for hemp licenses. He was charged with soliciting a $25,000 payment in exchange for getting a license awarded by the Department in August 2019. The indictment also alleges that Smith managed to score $65,000 in August and November 2019 from two people.
In Other News
Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM), a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture, announced it has entered into an agreement with California-based AXEON Water Technologies, a leading manufacturer of water purification solutions, to distribute new lines of reverse osmosis water filtration systems and solutions for the horticultural market.
Sunstream Opportunities LP, an affiliate of Sunstream Bancorp Inc., a joint venture sponsored by Sundial Growers Inc. (NASDAQ: SNDL), has been assigned an investment grade rating of BBB+ by Egan-Jones Ratings Company, an independent, unaffiliated rating agency.
Novamind Inc. (CSE:NM)(OTCQB:NVMDF) has entered into a securities purchase agreement with a single institutional investor for a private placement of its common shares and warrants to purchase Common Shares for gross proceeds of approximately C$5 million. Pursuant to the Private Placement, the Company will issue 12,500,000 Common Shares and Warrants to purchase up to an aggregate of 12,500,000 Common Shares at a purchase price of CAD$0.40 per Common Share and associated Warrant.