This is a copy of the April 22nd, Sunday edition of our weekly Newsletter which we have been publishing since October, 2015.
We think that we are on the cusp of a major shift in sentiment in the United States with respect to investing into the cannabis industry, driven by likely federal policy changes. As we discussed in last week’s newsletter, the deal between Senator Cory Gardner and Donald Trump paves the way for a permanent solution to what has always been a temporary answer to how the federal government will handle the many complicated issues with respect to state-legal cannabis. While we aren’t expecting that the federal government will fully legalize cannabis as Canada is doing, we believe it will address some key issues that make it hard for cannabis operators to do business and that greatly limit the pool of investors to fund their operations, like taxation, research and banking. We suggested that the Canadian election of Justin Trudeau and the ensuing progress the country has made over the past 30 months with respect to capital raising and wealth creation could serve as a model for how a move to rational federal policy will play out here.
While the process is going to take some time to evolve, we saw many signs this week of an immediate shift in the way companies and investors are approaching the future. We published a story on a Canadian LP, Indiva, which trades on the TSXV and is not burdened by the rules the TSX imposes, taking a stake in Bhang. In an interview yesterday, Dr. Anthony Holler, the Chairman of CSE-listed Sunniva, stated that his company, which is developing a massive production facility in California, will now be more aggressive in the United States following recent events. Kush Bottles announced a more aggressive strategy to build market share. CannaRoyalty decided to buy its strategic partner, FloraCal. These are just some of the immediate changes we observed, and it’s been only a week.
Cannabis-focused funds have been slow to develop, but they are gaining traction and hitting critical mass, something that we feel will expedite investment into the industry, as many investors would like to participate but don’t have the capability or desire to necessarily conduct due diligence at the company-level. Additionally, traditional funds are likely to be more willing to make bets on ancillary companies, as we saw this week with Tiger Global taking a stake in Green Bits.
Where is the immediate opportunity? There are several multi-state operators, some public, some private and some about to transition to the public markets, including several that we feature on New Cannabis Ventures. If we are truly on the cusp of a more rational federal policy with respect to cannabis, this seems like a great time for investors to be learning more about the multi-state operators who have proven themselves thus far.
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New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:
- Aphria Introduces Solei Cannabis Products for New Retail Market in Canada
- Aurora Cannabis Announces Plans to Build 3rd Alberta Production Facility
- Guest Post: California Cannabis Licenses Could Reach More than 20,000 by End of 2018
- CannaRoyalty to Buy California Cannabis Grower FloraCal for up to 7 Million Shares and US$4 Million
- Canopy Growth’s BC Tweed Second Site Receives Green Light for Cannabis Cultivation
- Exclusive: GW Pharma Gets Unanimous Support for Epidiolex Approval from FDA Advisory Committee
- Hiku Brands to Acquire WeedMD in All-Stock Deal
- Exclusive: How Cresco Labs is Winning in Highly Regulated Cannabis Markets
- iAnthus to Open First Massachusetts Cannabis Dispensary in May
- Isodiol to Take 19.9% Stake in Compass Cannabis Clinic for Exclusive CBD Distribution
- Liberty Health Sciences Raises $20 Million Selling Units at $0.90
- Kush Bottles Offers Free Shipping on Cannabis Packaging and Accessories and Expands Client Service Team
- Maricann Receives German Export Permit
- MPX to Acquire Canadian LP Canveda for $18 Million
- Exclusive: Public Cannabis Company Revenue Tracker Provides Updates through April 16, 2018
- Scotts Miracle-Gro Announces $450 Million Acquisition of Sunlight Supply as Hawthorne Sales Slump
- Tiger Global Leads Green Bits $17 Million Investment Round
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Alan & Joel