The Week In Cannabis: Stocks Up By Double-Digits On Jazz Pharma’s GWPH Acquisition, Potential Federal Moves

Market Trading EssentialsFebruary 5, 2021

7 minutes read

Cannabis stocks had one of their strongest weeks in history.

Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) acquired GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) for $7.2 billion, or $6.7 billion excluding GW Pharma’s cash.

The price of $220 per ADS in cash and stock, with $200 in cash and $20 in Jazz shares, represents about 50.4% premium over the $146.25 per share at which GW Pharma had closed on Tuesday.

“The Jazz Pharmaceutical acquisition of GW Pharmaceuticals for $7 billion shows just how much companies are willing to pay for cannabis assets,” Green Market Report editor Debra Borchardt told Benzinga. “It seems the bear market for cannabis stocks is officially over as GW Pharma stock jumped over 50% on the news.”

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

Other Cannabis Spikes

Also spiking on the acquisition announcement in a classic sympathy move were Corbus Pharmaceuticals Holdings Inc. (NASDAQ: CRBP) and Zynerba Pharmaceuticals Inc. (NASDAQ: ZYNE), both posting gains of more than 40% this week.

Sundial Growers Inc (NASDAQ: SNDL) had a roller coaster week. The stock received attention from Reddit investor group r/WallStreetBets, which has over 8 million members. Sundial shares closed nearly 48.5% higher on Monday, dipped Tuesday, but spiked 16% on Wednesday. Gains for the week ultimately surpassed 38%.

As of Jan. 14, 35.79% of the float was short, and the group is known to target buying shares of companies such as GameStop Corp (NYSE: GME) and AMC Entertainment Holdings Inc (NYSE: AMC), which are heavily shorted as well.

Following this stellar rise, Sundial closed a share offering valued at roughly $74.5 million this week. The company registered an offering of 60.5 million Series A Units sold at a price of about $1 each. Some 14 million Series B Units were sold at a price of $1 each, minus $0.0001.

ETFs also did great, posting double digits gains. Over the last five trading days:

The ETFMG Alternative Harvest ETF (NYSE: MJ): gained 22.4%.
The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): was up 23.6%.
The Cannabis ETF (NYSE: THCX): rose 25.1%.
The Amplify Seymour Cannabis ETF (NYSE: CNBS): advanced 24.6%.
The SPDR S&P 500 ETF Trust (NYSE: SPY) was up 4.83%.

Politics

A coalition of Democratic Senators announced imminent plans to advance legislation aimed at descheduling marijuana on a federal level. Senate Majority Leader Chuck Schumer, along with Sens. Ron Wyden and Cory Booker, issued a statement on Monday saying that they will “release a unified discussion draft on comprehensive reform” during the early part of 2021.

Alabama: A State Senate committee voted to pass a medical marijuana legalization bill, moving it to the full floor for review. The bill, presented last week by Senator Tim Melson, passed the Senate Judiciary Committee 8-3 after a short debate. It proposes for around 20 ailments to be treated with medical cannabis, including sleep disorders, PTSD, anxiety, cancer-related cachexia, Crohn’s disease and Tourette’s syndrome.

Virginia: The state House of Delegates voted for a bill to legalize cannabis, expecting a Senate vote later today. The bills have been revised, and changed several times by many governing bodies, since their first introduction by Governor Ralph Northam in mid-January. The House supported the latest version in a 55-42 vote, with two abstentions. Those who were against the bill reportedly argued that marijuana legalization would prompt “increased youth use and impaired driving.”

Kansas: Governor Laura Kelly says the state is ready for medical marijuana legalization.

New Mexico: The Senate and House introduced cannabis legalization bills Monday. On the heels of the two bills presentation Emily Kaltenbach, Senior Director for Resident States and New Mexico for the Drug Policy Alliance issued the following statement that questions the social justice aspect of one of them: “Although there are some similarities between these bills, there is a stark difference in who is prioritized by each. The Senate version fails to include comprehensive social justice and equity provisions that are necessary to right the wrongs of the failed war on drugs.”

Financings And M&A

BGP Acquisition Corp. (NEO: BGP.UN) debut on the NEO Exchange following a $115 million initial public offering (IPO), which included the full exercise of an over-allotment option.
Schwazze (OTCQX: SHWZ) closed a .3 million acquisition of two Star Buds Colorado dispensaries located in Denver.
Red White & Bloom Brands Inc. (CSE: RWB) (OTC: RWBYF) closed a debenture unit financing to an arm’s-length investor on a private placement basis. Gross proceeds were $6.12 million.
Coda Signature closed a $6 million funding round led by current investors, Granite Hall Partners, Gotham Green Partners and Salveo Capital.
GrowGeneration Corp. (NASDAQ: GRWG) purchased Grow Depot, a two-store chain in Auburn and Augusta, Maine, for an undisclosed price.
Aleafia Health Inc. (TSX: AH) (OTCQX: ALEAF) repaid a $25 million debt to Emblem Corp. in cash. Emblem Corp. issued an 8% unsecured convertible debt on Feb. 2, 2018. The Toronto-based company acquired it on March 14, 2019.
Springbig acquired BudTender. Terms of the deal are undisclosed.
South African wine and spirits company Distell, producer of Bunnahabhain and Deanston Scotch whiskies, teamed up with venture capital firm Invenfin to invest in cannabis wellness brand Rethink.
Power REIT (AMEX: PW) obtained a greenhouse cannabis cultivation facility in California for $7.685 million.
Skincare company Cellular Goods, poised to debut on the London Stock Exchange, received an investment from David Beckham’s DB Ventures. The company is poised to become the first company of its kind to list on the LSE.
Gaby Inc. (CSE: GABY) (OTCQB: GABLF) raised CA$12.5 million ($9.74 million) to complete the acquisition of Miramar Professional Services, which runs the California-based Mankind Dispensary.
PureK Holdings Corp‎. (TSX: PKAN) purchased skincare and beauty company No B.S. Life LLC for $500,000 in cash, plus a refundable deposit in the amount of $1.5 million. PureK will pay an additional $1 million in cash once the deal closes.

Earnings Reports

The Scotts Miracle-Gro Company (NYSE: SMG) reported a 105% sales spike, reaching $748.6 million in the first three months of this fiscal year. The record quarterly results can be mainly attributed to the substantial retailer support in the U.S. Consumer and Hawthorne segments, according to Scotts Miracle-Gro chair and CEO Jim Hagedorn. The Hawthorne segment sales “surpassed our expectations,” he said, citing an increase of 71% to $309.4 million.

More News From The Week

Tilray Inc. (NASDAQ: TLRY) received all regulatory and market approvals to offer its medical cannabis products to consumers in Portugal. The company said it would utilize its GMP-certified EU facility located in Cantanhed for the purpose.

Cresco Labs (CSE: CL) (OTCQX: CRLBF) was approved by the Arizona Department of Health Services to commence adult-use sales at its Sunnyside dispensary in Phoenix in mid-February.

Planet 13 Holdings Inc. (OTCQX: PLNHF) is expanding outside of Nevada. On Wednesday, the company announced it has started building its first California store.

Haymaker Cannabis announced a partnership with SMACK/Ultimate Rap League founder Troy “Smack White” Mitchell, an equity owner of Haymaker Cannabis and the brand’s flagship ambassador. Mitchell, the face and host of Ultimate Rap League, hip-hop’s preeminent rap-battle circuit, says the alliance with Haymaker Cannabis was born out of each brand’s mutual respect for the other.

“The Haymaker Cannabis joint-venture with SMACK/URL came about because [Haymaker Cannabis co-founder] Pacino Bing was a big fan of battle-rap for so many years,” Mitchell told Benzinga. “And he invited me to get involved because of my reach and the level of respect that I have within the hip-hop culture. What they’re doing with cannabis is very unique and it reminded me of how I started within my industry.”

“Haymaker’s partnership with Mitchell was based entirely on our respect and admiration for who he is and the culture he created,” Bing added. “It makes sense for the Haymaker Cannabis brand and coincides with our core values of being competitive and vocal about our place in cannabis as minorities.”

Inanna Manufacturing has launched. Led by CEO and founder Raquel Origel, Inanna offers a full suite of services to cannabis brands, taking them through the processes of ideation, flavor formulation, research and development, packaging, and market launch with ease. Products the company can white label include gummies, tinctures, topicals, pre-rolls and baked goods.

HempFusion Wellness Inc. (TSX: CBD.U) (PINK: CBDHF) started trading on the OTC Markets.

View more earnings on MJ

“As a US-based CBD company, this important step allows a broader range of US investors to access the Company,” commented Jason Mitchell N.D., HempFusion’s co-founder and CEO. “Additionally, we have applied for an OTCQX listing and DTC eligibility, which we expect in the coming weeks subject to the approval of the OTCQX and the satisfaction of certain listing requirements.”

HydroFarm is leveraging its robust distribution network via Eddi’s Wholesale to increase the availability of Advanced Nutrients, the industry’s top-selling complete nutrient system. The strategic partnership aims to improve market efficiency and productivity, making it more convenient than ever for growers in Canada to cultivate potent specialty crops.

“HydroFarm and Advanced Nutrients are both driven by the same goal to make it easier for growers to put a superior end product on the market,” Advanced Nutrients founder and CEO, Michael ‘BigMike’ Straumietis, told Benzinga. “I couldn’t be more thrilled to reach a greater audience of Canadian growers who are looking for proven ways to cultivate consistent yields of high-value crops.”

Canopy Growth Corp. (TSX: WEED) (NASDAQ: CGC) introduced a new line of CBD products for dogs under the SurityPro brand name.

GKUA Ultra Premium, the cannabis brand created by Lil Wayne, is now being sold in Colorado.

The brand first debuted in California in December 2019 and has since expanded to Michigan. GKUA partnered with award-winning Harmony Extracts, in Colorado to bring their signature strains, along with oils, live sauces and live concentrates, to the state.

Executive Moves