After a slow first week of the year, 2019 is quickly picking up steam. This week, we learned that Rep. Earl Blumenauer (D-OR) filed a bill in Congress that seeks to remove cannabis from the federal Controlled Substances Act. The bill is dubbed H.R. 420.
In other political news, Marijuana Moment reported that six red states have already seen marijuana legalization bills filed, Rep. Alexandria Ocasio-Cortez (D-NY) hired Dan Riffle, former director of federal policy for the Marijuana Policy Project, as her senior counsel and policy advisor. Sen. Kamala Harris (D-CA) called for the end of the War on Drugs and the legalization of marijuana.
Marijuana Moment publisher Tom Angell told Benzinga: “The year has barely just begun and we’re already seeing lawmakers from both parties, at the federal and state levels, filing a large number of thoughtful marijuana reform proposals. 2019 is shaping up to be the busiest year yet for cannabis legislation.”
In the capital markets, the dominant news came in the form of earnings reports from Aphria Inc /zigman2/quotes/207425803/composite APHA -4.08% and KushCo Holdings Inc /zigman2/quotes/209165034/delayed KSHB -3.60% ; a lawsuit againstMedMen Enterprises Inc. /zigman2/quotes/201940908/delayed MMNFF +4.55% ; and a CBD products distribution deal between Green Growth Brands Inc /zigman2/quotes/204912440/delayed GGBXF +2.40% and shoe retailer DSW Inc. .
Related Link: Aphria CEO, Co-Founder To Stand Down; Q2 Revenue Surges, But Trails Consensus
Despite the earnings reports and legal news, the biggest news of the week from Green Market Report CEO Debra Borchardt's perspective is DSW's CBD venture.
“A mainstream shoe warehouse selling CBD products? I'm not surprised because on one hand many of the executives from Green Growth Brands (the provider of the CBD products) used to work at DSW; but it seems like a real stretch. On the other hand, we just have to adjust ourselves to thinking of cannabis as a mainstream product and no longer an outsider product.”
Green Growth Brands CEO Peter Horvath also spoke with Benzinga on Friday.
“We are excited to be the first company to fulfill an order with a breadth of personal care and beauty SKUs [stock keeping units] to a national retailer,” he said. “Our initial test had 23 SKUs; the results were amazing. We are now bringing 29 SKUs, including new products, in this launch to 96 stores. We are constantly developing new products and are looking forward to making them accessible to consumers throughout the U.S. through DSW, our kiosks and online.”
Make sure to check out Benzinga’s list of “20 Women Set To Dominate The International Cannabis Space In 2019.” Find out why Dr. Raquel Peyraube, Giadha Aguirre de Carcer, Jessica Billingsley, Tahira Rehmatullah, Sara Gullickson, Beth Stavola, Emily Paxhia, Mara Gordon, Cynthia Salarizadeh, Debra Borchardt, Jessica VerSteeg, Dr. Chanda Macias, Jodie Emery, Dr. Cristina Sanchez, Shaleen Title, Karson Humiston, Amy Margolis, Wendy Robbins, Karen Paull, Danielle Russell, and Samantha Watt deserve this honor.
Over the last five trading days, the United States Marijuana Index, which tracks most of the largest marijuana stocks in the U.S., gained 5.8 percent, while the North American Marijuana Index, which also includes Canadian stocks, rose approximately 10.5 percent.
Over the same period, the Horizons Marijuana Life Sciences Index ETF /zigman2/quotes/200444869/delayed HMLSF -4.07% /zigman2/quotes/208856346/delayed CA:HMMJ -3.41% gained 18 percent, while the ETFMG Alternative Harvest ETF /zigman2/quotes/204332491/composite MJ -2.63% rose roughly 12.8 percent. The SPDR S&P 500 ETF Trust /zigman2/quotes/209901640/composite SPY +0.07% closed the period up 2.5 percent.
The top marijuana stocks (market cap above $300 million) in U.S. exchanges and how the performed over the last five trading days:
Canopy Rivers Inc /zigman2/quotes/201002551/delayed CNPOF -6.28% , the venture arm of Canopy Growth, announced the closure of a $60.5-million bank debt facility for its 49-percent joint venture PharmHouse Inc. The syndicated credit facility was led by Bank of Montreal /zigman2/quotes/206428109/composite BMO +0.59% with Canadian Imperial Bank of Commerce /zigman2/quotes/210295353/composite CM +0.63% and Concentra Bank as lenders.
The credit facility will be used to finalize the acquisition of a 1.3-million-square-foot ultramodern greenhouse facility and convert its operations for cannabis growth. The facility represents the first stage of a planned global strategic relationship between Canopy Rivers and its partner PharmHouse, the leading principals and operators of a North American greenhouse produce conglomerate, to pursue regulated cannabis opportunities together on a global scale.
“This announcement is significant for the cannabis industry in several ways. First, it is the largest debt financing provided to a private company to date in the industry. Second, it is supported by a syndicate of three Schedule 1 banks, which is a further indication of the growing legitimacy of this industry as cannabis moves into the mainstream. And finally, it strongly positions the PharmHouse platform to fulfill a growing demand for cannabis today, and into the future as economic activity and regulatory reform continues in North America and new jurisdictions globally,” said Canopy Rivers Chairman and CEO Bruce Linton.
Leafbuyer Technologies Inc. /zigman2/quotes/209418096/delayed LBUY +0.13% announced its rollout of a cannabis industry blockchain solution: the Leafbuyer Wallet. This is the company’s first of several steps to introduce dispensaries, product companies and cannabis consumers to a comprehensive blockchain platform. The launch opens new revenue streams for Leafbuyer and aids in the company’s goal to maintain transparency with its customers and consumers.
“Our Dec. 20 rollout is just the beginning of Leafbuyer's plans for blockchain. It lays the groundwork for us to expand our product offerings and opens up dozens of new revenue possibilities,” Leafbuyer CEO Kurt Rossner told Benzinga. “Our teams are working hard to make sure all dispensaries in legal markets understand their options and have access to this revolutionary blockchain solution.”
Green Thumb Industries signed a definitive agreement to acquire Advanced Grow Labs LLC and enter the Connecticut market. AGL is one of only four companies in Connecticut licensed to grow and process cannabis, and operates a 41,000-square-foot manufacturing facility in West Haven. In addition, AGL has a 46-percent ownership of a recently awarded dispensary that will be located in Westport, which makes it the only vertically licensed company in the state.
GTI also won a processing license in Ohio this week, allowing the company to produce and distribute its brands in the state, including its five stores that are now in the build-out phase.
GTI founder and CEO Ben Kovler told Benzinga: “As we evaluate M&A opportunities in the cannabis space, creating shareholder value over the long-term is GTI’s top priority. The Advanced Grow Labs acquisition has attractive multiples, is accretive and provides us entry into the high-growth, limited license state of Connecticut, solidifying our position in the tri-state area," he said.
"The people behind these partnerships are also of paramount importance to us — the AGL management team is a great cultural fit and their mission to enhance wellness with access to quality cannabis products mirrors that of GTI.”
The Shoppers Drug Mart division of Loblaw Companies Ltd /zigman2/quotes/208874772/delayed LBLCF +2.73% — Canada's biggest pharmacy, with 1,300 stores — announced the opening of its online medical cannabis store. Some industry observers see the move as a significant endorsement and move to the mainstream for medical cannabis as it joins Shoppers' OTC and prescription drug offerings.
Also announced: a partnership between Canadian LP The Flowr Corporation /zigman2/quotes/205237089/delayed FLWPF -0.44% and Shoppers. Flowr will offer its medical cannabis line exclusively through Shoppers and is turning over its medical sales channel to Shoppers.
Flowr co-CEO Tom Flow told Benzinga: “This gives us the opportunity to rapidly scale our medical business, which we had been doing direct through our website, given Shopper's large existing customer base and marketing capabilities. And it gives Shoppers' customers a premium, non-irradiated option for their medical needs.”
Related Link: Aphria Begins Shipment To Shoppers Drug Mart, Completes Acquisition Of German Distributor
Weekend Unlimited Inc. /zigman2/quotes/202014000/delayed WKULF +12.81% closed its acquisition of the remaining 20 percent of California’s Canna Candys and Canna Medibles. According to Weekend Unlimited CEO Paul Chu, Canna Candys is a developed brand with approximately 35 percent of hard candy market share in Southern California. The company is in the final steps of kicking off operations from a newly licensed facility in Adelanto, California, providing capacity for growth in product development and manufacturing.
“The operations team is experienced, having built distribution in Southern California to 380 retail stores, and are expecting additional sales growth this year,” Chu said.
Data and analytics firm Headset closed its Series A financing round, having raised $12.1 million from a group led by Poseidon Asset Management and AFI Capital Partners. The company added Emily Paxhia and Nico Richardson to its board of directors.
“With our Series A, Headset will be able to further capitalize on the rapidly growing demand for data and analytics on the cannabis industry,” CEO and co-founder Cy Scott told Benzinga. "The capital will help us fuel our growth not only in the U.S., but internationally as well."