The Week In Cannabis: $1.25B+ In Financings And M&A, Tilray, KushCo, New York And More

Below is a recap of the main news related to the cannabis industry and markets for the week of August 27, 2021.

Contents

1. The Votes At Tilray, KushCo, Greenlane

2. New York Getting Greener

3. Hexo’s Nasdaq Debut

4. Markets

5. M&A

6. Financings

7. Earnings Reports

8. Nevada Consumption Lounges

9. Latin America

10. Europe And Africa

11. Kid Kudi And Snoop Dogg

12. Other News

13. Executive Moves

14. Top Stories Of The Week

The Votes At Tilray, KushCo, Greenlane

KushCo Holdings, Inc. (OTCQX: KSHB) stockholders overwhelmingly voted to approve the previously announced merger agreement with Greenlane Holdings, Inc. (NASDAQ: GNLN) at the special meeting of stockholders, with over 97% of votes cast voted in favor of the proposal. Greenlane stockholders also voted to approve the merger.

Pursuant to the terms of the merger agreement, KushCo will become a wholly-owned subsidiary of Greenlane in an all-stock, tax-free business combination.

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

Meanwhile, Tilray Inc. (NASDAQ: TLRY) (TSX: TLRY)’s CEO Irwin D. Simon sent an open letter to shareholders detailing his strategic vision and $4 billion revenue plan for the company. The executive encouraged all shareholders to vote for initiatives in support of that vision and plan at Tilray’s Special Meeting of Stockholders, scheduled for September 10.

New York Getting Greener

New York’s 57th governor, Kathy Hochul — sworn into office this week after embattled Andrew Cuomo resigned — said she is ready to move on the state’s potentially multibillion-dollar legal cannabis program ASAP.

The former lieutenant governor saw the writing on the wall when she tweeted in January 2021 that “It’s time to finally legalize recreational marijuana and create an equitable adult-use cannabis program that generates much-needed revenue for New York.”

And now Hochul’s chance has come.

Although it’s unclear how quickly Hochul can roll out the state’s program in view of the precious little groundwork done by her predecessor, the governor has expressed her intent to move forward with the cannabis board and other appointments. The issue will be part of a private meeting to be held next week with Senate Majority Leader Andrea Stewart-Cousins, a staunch supporter of cannabis legalization.

Story continues

“Nominating and confirming individuals with diverse experiences and subject matter expertise, who are representative of communities from across the state, to the Cannabis Control Board is a priority for Gov. Hochul,” the new governor’s spokesman, Jordan Bennett, told The Post.

“We look forward to working with the legislature to keep this process moving forward,” the Hochul rep said.

Also in New York, Brooklyn’s historic Medgar Evers College (MEC) will become the first City University of New York (CUNY) campus to offer a cannabis minor degree program. In the coming weeks, students will be able to choose from 13 newly developed courses to earn a cannabis degree minor in one of four different tracks. These courses are open to all students at the other of the 24 CUNY campuses via e-permits. The program, spearheaded by the MEC Cannabis Education Taskforce, is housed in the Department of Chemistry and Environmental Sciences.

Hexo’s Nasdaq Debut

HEXO Corp (TSX: HEXO) (NASDAQ: HEXO) debuted on the Nasdaq Capital Market on Tuesday.

After announcing the pricing of a previously announced overnight marketed public offering of its 47.46 million units at $2.95 per unit last week, the company’s stock price plunged 28% on Friday.

Shortly after, Cantor Fitzgerald’s Pablo Zuanic lowered the stock’s price target to CA$3.40 from CA$10 to address sectoral derating, increased share count and reduced visibility while reaffirming a “Neutral” rating.

According to the company, the total proceeds of $140 million from the offering will be utilized to fund the purchase price payable to the Redecan shareholders on the closing of the acquisition and for expenditures related to its U.S. expansion plans.

The stock rebounded later in the week as HEXO reported that its shareholders approved the previously announced acquisition of family-owned Canadian cannabis producer Redecan.

In exchange, the Ottawa-based company agreed to pay $400 million in cash in addition to the issuance of 69,721,116 common shares at $7.53 per share, bringing the total consideration to $925 million.

Markets

Stocks posted mixed results this week. Over the five trading days of this week:

• The ETFMG Alternative Harvest ETF (NYSE: MJ): gained 4.3%.

• The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): rose 4.4%.

• The AdvisorShares Pure US Cannabis ETF (NYSE: MSOS): advanced 2.6%.

• The Cannabis ETF (NYSE: THCX): was up 4.3%.

• The Amplify Seymour Cannabis ETF (NYSE: CNBS): rose 4.1%.

• The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the week up 1.56%.

M&A

Financings

Earnings Reports

• Gage Growth Corp. (CSE: GAGE) (OTC: GAEGF) reported second-quarter results. Revenue totaled $26.4 million compared to $17.6 million in the first quarter of 2021, representing a 49.9% quarter-over-quarter increase and 130.2% year-over-year, and missing estimates by $2.03 million. The gross margin, before the impact of biological asset adjustments, was 34.2% versus 26.1% in the prior period.

• TILT Holdings Inc. (NEO: TILT) (OTCQX: TLLTF) reported its financial and operating results for the second quarter and announced a new partnership with the Shinnecock Indian Nation to establish vertical cannabis operations on their tribal territory in the Hamptons. Second-quarter revenue increased 33% to $48.5 million driven by growth in both cannabis and inhalation and accessory revenue.

• Jushi Holdings Inc. (CSE: JUSH) (OTCQX: JUSHF) announced its financial results for the second quarter of 2021. Total revenue increased 4.6% sequentially and 219.7% year-over-year, reaching $47.7 million in the quarter ended June 30.

• Cansortium Inc. (CSE: TIUM) (OTCQX: CNTMF), which operates under the Fluent brand, announced its second-quarter earnings, revealing a 24% year-over-year improvement in revenue, which amounted to $16.5 million.

• Hollister Biosciences Inc. (CSE: HOLL) (OTC: HSTRF) (FRANKFURT: HOB) reported its financial and operating results for the second quarter of 2021, touting a significant growth in revenue which amounted to $17.6 million.

• Planet 13 Holdings Inc. (CSE: PLTH) (OTCQB: PLNHF) announced its financial results for the second quarter of 2021, reporting revenues of $32.8 million, up by 205.2% from $10.8 million in the same period of 2020.

Also reporting earnings this week (full details on Benzinga Cannabis) were:

• Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF)

• Indiva Limited (TSXV:NDVA) (OTCQX: NDVAF)

• Can-Fite BioPharma Ltd. (NYSE: CANF) (TASE: CFBI)

• Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF)

• Chalice Brands Ltd. (CSE: CHAL) (OTCQB: CHALF)

Find all the details on these and other earnings reports on Benzinga Cannabis’ Earnings Center.

Nevada Consumption Lounges

The Nevada Senate approved the cannabis consumption lounges legalization bill in June in a 17-3 vote, sending it to the governor’s desk. About a week later, Nevada Governor Steve Sisolak (D) signed legislation into law. Under the new law there are two new licensing categories for cannabis businesses – 1) ”retail cannabis consumption lounges and 2) “independent cannabis consumption lounges.”

Latin America

Costa Rica

In Costa Rica, legislators re-ignited a debate over the legalization of medical cannabis and hemp.

Bill No. 21.388 was approved by the Environmental Commission of the Legislative Assembly last November, but its presentation to the plenary of the Assembly was delayed.

View more earnings on MJ

In the initiative proposed by Congress Representative Zoila Rosa Volio, hemp is defined as cannabis with a THC content of less than 1%. In addition, the bill distinguishes between products for therapeutic and medicinal use.

The bill did not contemplate licensing to private firms, only to national farmers or cooperatives. Legislators modified the bill through a motion that enables the production of medicinal cannabis by individuals and legal entities.

Brasil

Avicanna Inc. (TSX: AVCN) (OTCQX: AVCNF) completed its first commercial export of 20 kg of high CBD full spectrum psychoactive cannabis extracts to Brazil via its majority-owned Colombian subsidiary Santa Marta Golden Hemp S.A.S. The shipment is related to the previously announced three-year master supply agreement that SMGH executed with a leading Brazilian pharmaceutical in July 2021.

This marks the 11th country to which Avicanna has successfully completed the export of Aureus-branded products, which demonstrates the Company’s capabilities, innovation and regulatory expertise.

Europe And Africa

The German government is in favor of decriminalizing possession of up to six grams of cannabis throughout the country.

According to Heraldo, Daniela Ludwig, the government’s drug commissioner, said she was in favor of minimum possession no longer being a crime. Instead, it would become an administrative offense.

With minimal possession no longer a crime in some German states, authorities are now looking to implement a nationwide plan to unify criteria.

Ludwig also argued that possession of six grams can be justified and that “marijuana is not as dangerous a drug as cocaine or heroin.”

Meanwhile, Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB)’s subsidiary Aurora Germany GmbH and Ethypharm have delivered their initial shipment of cannabis to the French medical cannabis pilot program.

Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCQX: TGODF) finalized its first international commercial shipment consisting of cannabis flower and other extracts destined for the highly anticipated South African medical cannabis market.

Kid Cudi And Snoop Dogg

American rapper Kid Cudi has been showing his love for marijuana for a while now. In fact, he has a track called ‘Marijuana’ which, coincidentally, is 4:20 minutes long.

Now, the 37-year-old musician has taken his passion to another level: he’s looking to hire a professional blunt maker.

Rapper, cannabis activist and businessman Snoop Dogg appeared on Jimmy Kimmel Live! on Monday night in a special edition of the show hosted by TV sports personality Stephen A. Smith.

The duo discussed the issue of cannabis use by professional athletes, a topic that became hot last month when sprinter Sha’Carri Richardson was banned from competing in the Tokyo Olympics after testing positive for THC in the state of Oregon, where cannabis use is legal.

Richardson’s banning triggered a public debate involving the White House, several congressional lawmakers, the U.S. Anti-Doping Agency and the World Anti-Doping Agency.

In the live interview, Smith said he routinely recommends sports athletes to “stay off the weed,” but only because he “doesn’t want them losing their money.”

The rapper agreed with the remark, acknowledging that when it comes to athletes who have “commissioners and rules and regulations and tests,” testing positive for cannabis use can put a dent in their career.

However, Snoop Dogg said he thinks sports leagues should relax their attitude towards weed use by professional athletes.

Other News

Eybna, a technology company and terpene manufacturer based in both California and Tel Aviv, is partnering with legacy cannabis brands Spherex and Orchid Essentials, the cannabis brand from Orchid Ventures, Inc. (CSE: ORCD) (OTC: ORVRF).

The brands selected Eybna to develop and craft custom data-driven terpene formulations for their cannabis products to ensure pure, consistent flower experiences no matter where they choose to manufacture and offer their products, fueling multi-state expansion opportunities.

And Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) opened its 100th store.

CannGen Insurance Services launched a new division called CannGenPRO, which is designed to fill an industry need for Management and Professional Liability insurance. Under this division, the company is now offering Directors and Officers (D&O) liability insurance and Employment Practice Liability (EPL) for private companies operating legally in the U.S. and will entertain limits of up to $5 million on a combined or single exposure line basis.

“Last year the US cannabis industry saw tremendous growth and increased revenue — reaching a record $17.5 billion in legal cannabis sales. With this comes larger risks to an industry that struggles to find proper insurance coverage. Now is the perfect time to expand our product suite to include these needed solutions,” Charles Pyfrom, CMO of CannGen, told Benzinga.

Executive Moves

Find out about all the latest executive moves at:

• USCC, MedMen, Metrc, Green Check Verified

• Acreage, Green Scientific Labs, OMMA, PharmaCielo, Ketamine One, BC Craft Supply

• Jushi Holdings, HEXO Corp, Delic Holdings, KCSA Strategic Communications, Green Check Verified

Top Stories Of The Week

Check out the top stories on Benzinga Cannabis this week:

Top Spanish Stories

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

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