The Week In Cannabis: Epidiolex, Casa Verde, FDA, Michigan, Colombia, And More

Market Trading EssentialsDecember 24, 2020

6 minutes read

After a weak start to a shortened week, cannabis stocks rebounded on Wednesday afternoon, advancing on high volume, with some giving up the gains on Thursday morning. Over the 3 1/2 trading days of the week:

The ETFMG Alternative Harvest ETF (NYSE: MJ): gained 1%
The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): was up 5.2%
The Cannabis ETF (NYSE: THCX): was almost flat.
The Amplify Seymour Cannabis ETF (NYSE: CNBS): advanced 5.5%
The SPDR S&P 500 ETF Trust (NYSE: SPY) was up 1%.

In addition, GW Pharmaceuticals plc (NASDAQ: GWPH) published positive results for its Phase 3 clinical trial of Epidiolex oral solution in seizures related to tuberous sclerosis complex in JAMA Neurology. Epidiolex is the first FDA-authorized CBD medicine for children with severe forms of epilepsy. The medicine was first approved for treatments of seizures connected to Lennox-Gastaut syndrome and Dravet syndrome.

Michigan Gov. Gretchen Whitmer commuted the sentence of Last Prisoner Project’s constituent Michael Thompson, who spent 25 years in prison after a 1994 arrest of a nonviolent cannabis sale.

“I’m thankful to everybody that was involved and I’m thankful to Gov. Whitmer for granting my freedom. It’s been a hard journey but I’m just thankful that no one gave up on me. I want to use my time to help those who can’t help themselves and work for criminal justice reform,” said Thompson.

Benzinga Cannabis content is now available in Spanish on El Planteo.

Casa Verde Capital, the investment fund led by Snoop Dogg, Karan Wadhera and Ted Chung, closed a new fund of $94.7 million.

The U.S. Food and Drug Administration warned five companies on Tuesday to stop selling CBD products the agency said violate the Federal Food, Drug, and Cosmetic Act.

The regulatory body issued warning letters to Bee Delightful; G&L Wellness (C Better Daily); New Leaf Pharmaceuticals; NextL3vel Services Group, LLC, doing business as This Stuff Is Good For You; and Wellness BioSciences.

None of the products addressed in the letters underwent the drug approval process, the FDA said.

Exports of cannabis flower remain prohibited under Colombia’s regulations for the cannabis industry. That may soon change, as regulators recently sent a letter to the Ministry of Health recommending a lift in the ban of flower exports.

The letter, sent by the Superintendency of Industry and Commerce and signed by Superintendent Juan Pablo Herrera Saavedra, argues in favor of the benefits and business opportunities that this amendment would bring for Colombian producers.

cbdMD Inc. (NYSE: YCBD) said its net sales increased by 77% year-over-year to $41.9 million in fiscal 2020, slightly surpassing its expectations for the period. The Charlotte, North Carolina-based company reported direct-to-consumer e-commerce net sales of $30.5 million for the year, accounting for 73% of total net sales. That’s a 106% increase over fiscal 2019.

Financings And M&A

Schwazze (OTCQX: SHWZ) closed the acquisition of the first six out of 13 Star Buds Colorado retail locations for around $37.1 million.

Canopy Growth Corp (NYSE: CGC) said it’s giving up on its interest in Canopy Rivers Inc. (TSX: RIV) (OTC: CNPOF). The Toronto-based cannabis-focused venture capital firm opted to transfer three of its portfolio assets to Canopy Growth.

Rivers will obtain $115 million in cash and 3.75 million of Canopy Growth’s common shares in exchange. In addition, the Canadian cannabis giant agreed to cancel all 36,468,318 Multiple Voting Shares and the 15,223,938 Subordinate Voting Shares of Rivers it held.

Ayr Strategies (CSE: AYR) (OTCQX: AYRWF) said Tuesday it seeks to acquire the Florida-based Liberty Health Sciences (CSE: LHS) (OTCQX: LHSIF) in a $290-million stock-for-stock transaction. With the deal, Liberty shareholders will obtain roughly 13.1 million new Ayr shares, or 0.03683 Ayr shares for each Liberty share.

Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTC: CCHWF) will acquire fully integrated, multistate cannabis operator, Green Leaf Medical. The two companies entered a definitive agreement worth $240 million and consisting of $45 million payable in cash and $195 million payable via issuance of 43.9 million common shares of Columbia Care, with the potential for extra performance-based milestone payments in 2022 and 2023.

Halo Labs Inc. (NEO: HALO) (OTCQX: AGEEF) declared it intends to acquire a cannabis processing technology company, 1275111 B.C. Ltd. Under the deal, the company will obtain all of 1275111’s issued and outstanding shares in exchange for its 147,475,343 common shares.

Concurrently, the Toronto-based company said it’s poised to secure up to CA$2.25 million in financing through a proposed non-brokered private placement of up to 40,909,090 of its shares.

New Leaf Ventures Inc. (CSE: NLV), a cannabis-focused management group, signed a letter agreement with Zen Asset Management and its parent company Artizen Asset Management LLC. The agreement details the terms under which the two companies could potentially create a business combination. The transaction requires due diligence and discussion for a definitive agreement.

More News From The Week

San Francisco approved the latest equity-owned dispensary for Nicer Co., which is set to open in 2021. Nicer Co. is purpose-built to connect cannabis and the community, to deliver on the promise of shared prosperity with communities impacted by the War on Drugs, to address community needs at the local level, and to maximize the economic opportunity of cannabis through a mutual aid concept they call Shared Equity, co-founder Joe Reiss said.

“Working to affect equity policy and help launch equity-owned businesses for years now,” Reiss told Benzinga. “We’ve seen up close how cannabis is following in the footsteps of alcohol, tobacco, and even big tech, becoming just another industry set up to benefit a privileged few at the expense of the many, and we’ve designed Nicer Co. to be a lighthouse in the storm.”

Cannabis fintech Abaca announced the launch of nationwide merchant services that were tailor-made for CBD, cannabis ancillary and other high-compliance businesses. Abaca Merchant Services utilizes software-driven automation, artificial intelligence, and strong banking relationships to solve CBD and hemp retailers’ struggles with access to stable and reliable card processing. It can be bundled with banking to create an integrated financial solution. Abaca’s platform also connects hemp, CBD, and ancillary cannabis businesses with bank accounts, insurance, lending, and other financial services that traditional businesses take for granted.

“Our team at Abaca has a unique perspective on the payment processing problem that has long plagued CBD and other high-compliance retailers. Coming from the cannabis industry, we get it,” said Dan Roda, CEO of Abaca. “You no longer have to worry about your processor pulling the rug out from under you or your e-commerce store going dark. We built Abaca Merchant Services as a reliable payments solution, providing a stable revenue foundation on which to build your hemp, CBD, or ancillary cannabis businesses.”

Nonprofit cannabis brand Brother David’s launched in Oregon with six new products. All products are are Sun+ Earth Certified; Sun + Earth is a private standard exceeding USDA organic certification for food, which cannabis farmers may not seek due to federal cannabis prohibition.

The non-profit brand founded by David Bronner of Dr. Bronners is responding to consumer demand for cannabis grown without pesticides or under energy intensive artificial light. The new products are blends of ten or more strains of THC cannabis and CBD hemp varieties developed by Oregon’s Luminous Botanicals.

“We think most people if given a choice will choose cannabis grown under the sun and without chemical pesticides and synthetic fertilizer,” said Brother David’s president Les Szabo.

Little Green Pharma Ltd (ASX: LGP), a Perth, Australia-based company, was able to make its oils available to patients in the lucrative and expanding market of Germany. After nearly 22 months of testing, audits, inspections and bureaucratic procedures, Little Green Pharma can now officially say it’s made it to mainland Europe, something only a handful of companies have accomplished — and a first for Australian manufacturers.

“We are very pleased to be able to provide cannabis medicines to the German market for the first time. Our priority is always to put our patients first and adding patients in the German market is a very important part of our long term growth strategym” said Fleta Solomon, managing director of Little Green Pharma.

Twenty-seven-year-old Seun Adedeji, founder and chief executive officer of Elev8 Cannabis, was appointed as a board member for the National Cannabis Industry Association. As an NCIA board member, Seun will work with other board members and policymakers to advance federal policy reforms and other important endeavors.

“The NCIA’s mission is to promote the growth of a responsible and legitimate cannabis industry,” Adedeji told Benzinga. “Its mission is one that I agree with. And, as a board member, I am joining others who are as committed as I am on the NCIA board to advance policies up as far as Capitol Hill; I could not be more excited!”

Avicanna Inc. (TSX: AVCN) (OTCQX: AVCNF) (FSE: 0NN) said Wednesday its RHO Phyto products will be distributed to Canadian retailers in early 2021.

The Toronto-based company is expanding its outreach following the launch of Rho Phyto medical cannabis and Pura Earth CBD derma-cosmetic product lines in medical-only channels via a distribution deal with Shoppers Drug Mart Inc.’s subsidiary Medical Cannabis by Shoppers.