Dai Truong's Cannabis Newsletter - Issue #10


Cannabis

Barclays estimates US weed market would be $28B if legalized today, growing to $41B by 2028

Marijuana would become a major sector overnight if it’s legalized across the nation, Barclays says.

A Marijuana Brand With Loads of Street Cred

Sherbinskis, a favorite in hip-hop circles, is opening a store in Los Angeles that will sell fashion, along with cannabis.

NEO emerging as CSE rival for publicly-traded Cannabis Companies

Columbia Care Inc. made its rather unconventional public market debut, choosing to list on the little-known Toronto-based Aequitas NEO Exchange via a merger with a special purpose acquisition company (SPAC) created by investment firm Canaccord Genuity Group Inc.

The New York-based multi-state medical marijuana operator opened its first day of trading with a share price of $11.60 and a market capitalization of more than $2B, making it the first company worth over $1 billion to list on the NEO Exchange.

Post Malone, 'Hollyweed' Artist Zach “Jesushands” Fernandez Debut Cannabis Brands at Hall of Flowers

The second annual Hall of Flowers trade show saw launches from Post Malone, Hollywood-loved jeweler Alex Todd, and artist Zach “Jesushands” Fernandez. Among those who touted new lines was Grammy and Billboard-nominated artist Post Malone, whose team unveiled his new Shaboink line of flower, pre-rolls and vapes.

Michigan to accelerate decisions on unlicensed pot shops, recreational market

On only its second day of operation, the new state Marijuana Regulatory Agency began flexing its muscles Thursday, saying it will either approve or deny the license applications of most unlicensed medical marijuana dispensaries by June 1 and will immediately change rules on where licensed dispensaries can buy their products.

The agency was responding to a court ruling issued Tuesday by Court of Claims Judge Stephen Borrello, which stated that the agency couldn’t shut down about 50 unlicensed medical marijuana dispensaries until their applications for a license had been reviewed and approved or denied.

Vegas city officials approve marijuana consumption lounges

Legal marijuana smokers will soon be able to find lounges where they can light up in Las Vegas — but not in casinos, or in places serving alcohol, or on the resort-lined Las Vegas Strip. City spokesman Jace Radke said it could take several months for the 20 or so licensed recreational marijuana sales dispensaries in Las Vegas to get permits to open hookah-style consumption lounges.

Acreage Holdings CEO Views Canopy Growth Deal as Prelude to Larger Merger with Constellation Brands

Acreage has built an impressive business, and some wondered if the company was too quick to react to the Canopy deal, according to Murphy. For Murphy, the decision to move forward with the opportunity was straightforward. “When a Canopy, and further a Constellation, knock on your door, it was my job as a senior executive here to take that opportunity and run with it,” he said.

Sproutly to Join Moosehead Brewing Co. in Cannabis Beverage Venture

Sproutly, a Toronto-based licensed cannabis producer, is teaming up with Moosehead Breweries to create new beverages for the expanding Canadian marketplace. In October 2019, the government is expected to begin allowing cannabis-infused beverage sales; the joint venture between Sproutly and Moosehead will be there to capitalize on the rapidly growing product category.

Massachusetts Lawmakers Considering Cannabis Home Delivery Laws

The state’s diversity programs fast-track licensing for businesses that are owned by, employ, or benefit members of communities subject to high rates of drug arrests. The social equity program will provide technical training to those who have been arrested for a drug crime or are closely related to someone who has, or come from a community with a high rate of drug arrests. The programs are mandated by state law to address decades of inequity in the enforcement of drug laws.

The two-year period of exclusivity would begin once the empowerment and social equity programs have been implemented. The commission would evaluate the program’s success after 24 months and then decide whether to open home delivery licenses to all applicants.

Marijuana Investor Gives $9M To Harvard And MIT For Cannabis Science

The donation from financier Bob Broderick will help fill what’s widely seen as an urgent need for solid research on how cannabis affects the brain. Broderick was a board member for The Better Software Company (which sold assets to Canopy CEO Bruce Linton) and Hiku Brands (sold to Canopy for CAD $420M).

IONIC Brands Enters the Highly Desirable Edibles and Infused Products Category With Acquisition of Zoots Premium Cannabis-Infused Edibles

IONIC BRANDS will acquire Zoots for US$855,000 in cash and issuance of up to 10.7M common shares of the Company upon closing of the transaction. In addition, the Company will issue up to 5.35M common share purchase warrants to the shareholders of Zoots, with an exercise price of C$1.33 per share, exercisable over three years.

The acquisition adds Zoots’ edibles and infused products to the IONIC Brands portfolio of consumer-focused cannabis concentrates. The Zoots products expands IONIC Brands’ product line and is expected to increase IONIC Brands’ market share in the cannabis retail and wholesale industry. Zoots is a family-operated, state-of-the-art Washington-based edibles company, a first major player in the cannabis-infused edibles market. Zoots’ product line includes drops, gummies, energy shots and hard candies manufactured to offer consistent and reliable dosing. Zoots is forecasting total revenues in 2019 to be approximately US$7.5M with US$900,000 EBITDA. Zoots has consumer proven formulas which will be preserved by IONIC Brands.

CBD

SLANG Worldwide Launches CBD-focused Health and Wellness Division and Enters Partnership with Greenlane for North American Distribution

SLANG Worldwide Inc. (CNSX: SLNG), a leading global cannabis consumer packaged goods company with a robust portfolio of renowned brands distributed across 2,600 stores in 11 US states, announced the establishment of its new wellness-focused business division, SLANG Health and Wellness. The new business unit will develop and market a portfolio of plant-based cannabidiol (“CBD”) products that will be distributed in partnership with Greenlane Holdings, Inc. (NASDAQ: GNLN) (“Greenlane”) through their extensive distribution network.

Warren Buffett Says Cannabis Would Ruin Coca-Cola's 'Wholesome Image'

Warren Buffet believes that Coca-Cola branching out into the cannabis industry would negatively impact their “wholesome image.”

Bubba Watson Is The Latest Golfer To Hop On The CBD Bandwagon

CBD is popping up everywhere. It’s purported benefits are myriad, touted as providing relief from a host of health problems from joint pain and inflammation to anxiety and trouble sleeping. Kim Kardashian’s baby shower for her fourth child was CBD themed with guests making CBD bath salts, CBD body oils, and taking home swag bags loaded with cannabidiol products.

Yes, even golfers keep up with the Kardashians and Bubba Watson is the latest pro to hop on the bandwagon. Watson has landed an endorsement deal with cbdMD (NYSE: YCBD) and you’ll start seeing the company’s logo on both sides of his visor when he plays at Bethpage Black for the PGA Championship.

Medical Marijuana and CBD for Dogs: Everything You Need to Know

More proof that CBD is everywhere..got this through my Rover promotional emails..

CBD oil for dogs and medical marijuana for pets are popular, but are they safe? What’s the deal on their legality? Get expert tips and video so you’ll know.

Deals

Cannabis Company Curaleaf Is Acquiring Cura/Select for $950M

The acquisition joins two rapidly expanding cannabis brands on the East Coast and West Coast. The acquisition includes Select’s manufacturing, processing, distribution, marketing and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property. Curaleaf is buying all of Cura Partners. However, since they already have a robust CBD business they did not acquire the CBD assets of Cura. Therefore, Select CBD will not be included in the deal.

Canopy Growth Acquires Germany's C3 Cannabinoid Compound Company

The C³ Cannabinoid Compound Company was founded in 2014 by Bionorica SE, one of the world’s leading producers of herbal medicines, as a holding company for the companies Bionorica ethics and THC Pharm. Both Bionorica ethics and THC Pharm have for almost two decades been researching and developing the key therapeutic ingredients of the cannabis flower: tetrahydrocannabinol and cannabidiol. Under the umbrella of C³, research, production and marketing have been pooled and optimized.

CannTrust Completes $170M Secondary Offering

CannTrust Holdings priced its previously-announced underwritten public offering of 36,363,636 common shares at a price to the public of US$5.50 per share. The Company sold 30,909,091 common shares in the offering for total gross proceeds to the Company of approximately $170M before deducting underwriting discounts and commissions and estimated offering expenses, and certain shareholders sold 5,454,545 common shares in the offering. In connection with the offering, the Company and the Selling Shareholders have granted to the underwriters a 30-day option to purchase up to an additional 4,636,363 and 818,182 common shares, respectively, at the public offering price, less the underwriting discount.

SOL Global to Acquire Michigan assets from Merida SPV for $150M

SOL Global Investments Corp. (CSE: SOL) (OTCQB: SOLCF), the owner of 3 Boys Farms, LLC (“3 Boys”), which holds one of Florida’s original 14 operating and vertically integrated medical marijuana treatment center licenses, has entered into a binding letter of intent (“LOI”) with cannabis-focused private equity firm Merida Capital Partners to acquire Merida’s Michigan subsidiary, MCP Wellness, for an aggregate purchase price of $150M. MCP Wellness, a special-purpose vehicle (SPV) created to invest in Michigan cannabis operations, currently holds the rights to acquire two Michigan cultivation licenses, a processing license, and 3 fully licensed cannabis provisioning centers in Michigan with a fourth provisioning center scheduled to open in Ann Arbor in May.

Driven Deliveries announces LOI to Acquire Ganjarunner

Ganjarunner has shown continuous revenue growth since its inception. Since May of 2018 Ganjarunner has fulfilled over 17,000 deliveries to more than 6,000 customers and has experienced revenue growth of 54 percent to $2.6 million. Ganjarunner is rapidly expanding its existing customer base of over 10,800 customers and by adding over 1,300 new customers in Q1 CY2019 alone. Ganjarunner adds a solid revenue foundation to Driven as over 82 percent of Ganjarunner’s current business is from derived from repeat customers.

Khiron Life Sciences Enters into $25M Bought Deal Deal

Khiron Life Sciences Corp. (“Khiron” or the “Company”) (TSXV: KHRN), (OTCQB: KHRNF), a medical cannabis company with core operations in Latin America, announced that it has entered into an agreement with Canaccord and BMO Capital Markets as co-lead underwriters and joint bookrunners, on behalf of a syndicate of underwriters to purchase, 8,621,000 common shares of the Company on a “bought deal” at a price per Common Share of $2.90.

Curaleaf Acquires Rights to Cultivation and Processing Capacity in Ohio for $20M

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) (“Curaleaf”), a leading vertically integrated cannabis operator in the United States, announced it has signed a definitive agreement granting it an option to acquire Ohio Grown Therapies (“OGT”) medical cannabis cultivation and processing licenses and facility in Ohio. OGT was awarded preliminary cultivation and processing licenses by the Ohio Department of Commerce in 2018.

OGT is building out its 32,000 square foot cultivation and processing facility in Johnstown, Ohio. At completion, the facility will be comprised of 15,000 square feet for two-tier cultivation and 7,500 square feet for processing.

Marcota To Vote Against Acreage Holdings’ Value-Destroying Proposed Transaction With Canopy Growth Corporation

Marcato Capital Management LP (“Marcato”), a San Francisco-based investment manager which manages funds that beneficially own approximately 2.7% of the outstanding Subordinated Voting Shares of Acreage Holdings announced it will vote against Acreage’s value-destroying proposed transaction with Canopy Growth Corporation (TSX:WEED.TO).

Kushco Holdings, Inc. Announces The Private Placement Of US$21.3M Senior Unsecured Note

The Company intends to use the net proceeds of the Offering for general corporate purposes.

Confident Cannabis Raises $12M Series A Led by Poseidon Asset Management to Expand Wholesale Platform Nationwide

Confident Cannabis, the only cannabis wholesale platform powered by verified lab data, raised $12M in Series A funding, bringing their total to over $18 million since inception. The new Series A funding will help accelerate growth at Confident Cannabis and expand Wholesale to new markets. The round was led by San Francisco-based Poseidon Asset Management, one of the most well-respected cannabis venture funds. The round included follow-on participation from Bullpen Capital, Y Combinator, Greenfield Global and Base Ventures, and new investment from FJLabs, a leading marketplace venture investment fund.

Aurora Cannabis Invests $10M into Enwave and Licenses Drying Technology

EnWave Corporation, a Vancouver-based advanced technology company, has developed Radiant Energy Vacuum (“REV™”) – an innovative, proprietary method for the precise dehydration of organic materials. EnWave has further developed patent-pending methods for uniformly drying and decontaminating cannabis through the use of REV™ technology, shortening the time from harvest to marketable cannabis products.

Casa Verde Invests in Metered Dosage Vaporizer Technology

Indose, a precise dosage vaporizer, closed a $3.5M Series A round led by Casa Verde Capital. Indose brings to market a proprietary metered vape pen technology that measures the precise dose—down to the milligram—of THC delivered with every draw. As a person inhales, their dosage is shown in real-time on an LED display that ranges from .05 mg to 4 mg, creating an individualized, controlled cannabis vaping experience. Existing vaporizers on the market provide either no control over dosage, or a one-size-fits-all approach using timers to deliver the same dose to everyone.

People

Charlotte's Web Announces Appointment of Deanie Elsner, Former Executive Leader at Kellogg and Kraft, as New CEO

Ms. Elsner brings more than 25 years of diverse consumer packaged goods (“CPG”) experience across both business and marketing leadership roles in domestic and international markets. A talented marketer, she is widely recognized for driving business results by building brands through infrastructure, innovation, culture and talent. Previously, Ms. Elsner served as President of Kellogg’s $3B Snack Business Unit, the largest business unit in the Kellogg Global portfolio, where she transformed that business by leading the exit out of the direct store delivery distribution system, established a portfolio investment strategy and shifted to occasion-based marketing.

Medicine Man Technologies Inc. Names Co-Founder Andy Williams as CEO

Medicine Man Technologies Inc. (OTCQX: MDCL), a rapidly growing, vertically integrated operator, announced that the Company has named Co-Founder Andy Williams as Chief Executive Officer after serving as interim CEO for the past five months. Williams was named as the interim CEO in early December, after the untimely passing of Brett Roper, Medicine Man Technologies’ previous CEO. As interim CEO, Williams has supervised the pending transactions of MedPharm Holdings LLC and Medicine Man Denver, the former of which is expected to close in June. The combined companies will have a revenue run rate between $40-$50M.

Former Popchips President and CMO Marc Seguin joins PLUS as Chief Revenue Officer

As Chief Revenue Officer, Marc will be driving all aspects of marketing and consumer connection in leading the marketing and sales teams. He will spearhead consumer education about the cannabis industry, lead responsible and conscientious branding and marketing strategies, and is one of the first veteran food marketers to enter the cannabis space.