Insider Cannabis Newsletter: February 19th


Welcome to Insider Cannabis, our weekly newsletter, where we give you an insight into the offers, trends and personalities that are driving the multi-billion dollar cannabis boom worldwide.

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Happy Friday readers,

Cannabis policy has moved from a whimsical sideshow in Washington, DC to a major Capitol event as powerful democratic lawmakers continue to push for cannabis reform initiatives, from legalization to banking reform to pardons for offenses related to cannabis .

While the road to full legalization is narrow this year, as long as the filibuster stays in the Senate, it’s clear that this is a priority for Senate Majority Leader Chuck Schumer.

This has caused a rally in the sector as cannabis companies in the US and Canada seek to raise funds and make acquisitions in preparation for what many believe is the inevitability of legalization.

On other news, I went on CTV – one of Canada’s most watched television networks – to talk about cannabis legalization and the Reddit-run stock rally. You can check out the segment here and let me know what you think.

Yeji and I will have plenty of exciting stories next week, including a report on M&A trends from top executives at large cannabis companies.

-Jeremy (@jfberke) and Yeji (@jesse_yeji)

Here’s what we wrote about this week:

Watch the 13 slide presentation a Facebook engineer and Wall Street analyst used to convince investors to embrace a new breed of software tool for the cannabis industry

Canix is ​​a software company that helps cannabis companies manage their daily activities and operations. Led by co-founders Stacey Hronowski and Artem Pasyechnyk, hailing from companies like Facebook, Cowen and HIG Capital, Canix recently completed a $ 2.5 million round to grow its business and become a one-stop-shop for cannabis operators to become.

Executive moves and news

  • Jim Patterson, the former CEO of Eaze, has faced federal charges filed by Manhattan attorneys in connection with a case involving two other people accused of attempting to mislead banks into cannabis charges $ 100 million to treat, as reported by Law360.
  • Cannabis advisory firm Viridian Capital announced Thursday that Wall Street veteran Greg Coleman would join the company as Head of Capital Markets.
  • The US Hemp Roundtable announced its list of national officers, including leaders and activists, in 2021.
  • Dr. Oludare Odumosu takes over the management of the medical cannabis company Zelira Therapeutics. Former CEO Dr. Richard Hopkins resigned in February.

Deals, launches and IPOs

  • Kanabo, a medical cannabis vape company, went public on the London Stock Exchange on Tuesday. It is the first cannabis company to go public in the UK and founder Avihu Tamir told Insider he hopes this will pave the way for London to become a medical cannabis center. Kanabo stocks quickly doubled on debut before slipping later in the week.
  • There is still a cannabis SPAC. Choice Consolidation Corp., led by former Cresco Labs President Joe Caltabiano, began trading on Canada’s NEO Exchange on Friday. The offer raised $ 150 million.
  • Cannabis ag tech company Agrify raised $ 75 million through a common stock offering.
  • NBA all-star Chris Webber and mutual fund JW Asset Management announced Tuesday that they would launch a $ 100 million cannabis impact fund to invest in color entrepreneurs in the cannabis industry.
  • Psychedelics company MindMed announced Thursday that it would acquire digital health and AI company HealthMode for approximately $ 41 million in stock and $ 300,000 in cash.
  • HEXO Corp. announced Tuesday that it will acquire Zenabis Global for CAD 235 million in stock, the latest blockbuster M&A cannabis deal.
  • GrowGeneration acquired Grow Warehouse, a chain of hydroponic centers, and gave the combined company a greater presence in Colorado and Oklahoma.

Politics moves

  • New York Governor Andrew Cuomo announced further details on the state’s adult cannabis program, including the allocation of the $ 100 million dedicated social justice fund and details of home delivery services.
  • The Drug Policy Alliance published a series of six reports setting out how the war on drugs has contaminated the systems people interact with in their daily lives beyond incarceration, including education, employment, housing, child welfare, immigration and public services. It’s worth your time
  • Kentucky lawmakers are pushing for two separate bills that would legalize cannabis in the state, according to WDRB media.
  • A report published in the American Bar Association’s publication The Judges’ Journal, authored by experts at Rice University’s Baker Institute for Public Policy, shows that marijuana policies will continue to be unfair without federal intervention. The authors advocate reinvesting a significant portion of cannabis tax revenues in communities affected by the war on drugs, led by the federal government.
  • A group of leading Democrats, including Senate Majority Leader Chuck Schumer, New York MP Jamaal Bowman, and members of the Houses Cannabis Caucus called on President Biden to pardon federal cannabis offenses.
  • A new report from cannabis information site Leafly found the industry now supports over 321,000 jobs and created 77,300 full-time positions in 2020 alone. This represents 32% year-over-year employment growth – which is particularly noteworthy during an economic recession.

Summary of results

  • Tilray reported a fourth quarter profit of $ 56.6 million in sales and a net loss of $ 3 million. The company reported adjusted EBITDA of $ 2.2 million for the quarter. Tilray recently announced plans to merge with Aphria in a blockbuster deal. Read our coverage here.
  • MedMen reported a profit of $ 33.8 million and a net loss of $ 68.9 million for the second quarter.
  • Neptune Wellness Solutions reported third quarter earnings Tuesday and posted sales of $ 3.3 million.
  • Valens Company and Innovative Industrial Properties (IIP) are expected to hold calls for earnings next Thursday at 11:00 a.m. ET and 1:00 p.m. ET, respectively. Cronos Group will post its results on Friday at 8:30 am ET.

Chart of the week

Public cannabis companies raised $ 1.4 billion – the vast majority in equity – in January 2021 alone, which, according to Viridian Capital Advisors, sparked an M&A boom in the sector:

The capital of the public cannabis companies will be raised in January 2021

The capital of the public cannabis companies will be raised in January 2021

Joanna Lin Su / BI Graphics

What we read

Feds Plan To Charge Ex-CEO For Marijuana Bank Fraud Case (Law 360)

So how exactly will New York lawmakers legalize marijuana? (New York City & State)

Lucky Strike maker British American Tobacco is closely examining the cannabis trend (CNBC).

California Prioritizes Cannabis Workers, Vets For Vaccination (San Francisco Chronicle)

Land rush is underway in four states that approved the recreational pot last year (Wall Street Journal)

How This Tall Couple Used YouTube To Turn A Love For Weeds Into A Serious Sideline (Los Angeles Times)

Columbia professor who uses heroin says the drug helps him maintain a work-life balance and should be legal for everyone (Insider)