The Week In Cannabis: Big Earnings Reports, Biden’s Change Of Heart, New Report On Dispensaries

As the presidential race continues to heat up, Democratic contender and former Vice President Joe Biden has come out in support of decriminalizing cannabis — but not of full legalization. “Nobody should be in jail for smoking marijuana,” he said.

While it was a big step for someone who had been opposed to cannabis for three decades, it still remains a half-step.

In the words of the cannabis writer Bruce Barcott: “By embracing decriminalization, Biden takes what many in the drug reform community consider the coward’s way out … these half-steps leave law enforcement free to continue the racially biased policing tactics, using marijuana as a pretext to stop people of color as they go about their business.”

A myriad of cannabis-related bills were submitted in the House of Representatives, most of them aimed at protecting certain groups using medical marijuana, from military veterans to students.

Leafly released a report looking into the impact of dispensary openings on crime rates and property values. Benzinga broke this story with a write-up by Leafly’s California bureau chief David Downs.

“The vast majority of current research suggests that allowing regulated cannabis stores actually improves community safety, health and property values,” he said. 

On the markets front, we saw some of the biggest cannabis companies in the world report their quarterly results.

CannTrust Holdings Inc (NYSE: CTST) posted quarterly revenue of CA$16.9 million ($18.9 million), up 115 percent from the first quarter of 2018. Sixty-seven percent of the growth came from the medical channel, while 33 percent came from its recreational arm.

Tilray Inc (NASDAQ: TLRY) posted an adjusted loss of 27 cents per share, in line with consensus estimates, on sales of $23.04 million. Revenue surged by 195 percent on the year and was considerably above analyst estimates of $20.16 million. CEO Brendan Kennedy told CNBC: “You are going to see some daily volatility, but our objective is to invest for the long-term.”

Aurora Cannabis Inc (NYSE: ACB) reported deep losses on a year-over-year basis and net sales of CA$65.145 million ($48.4 million) versus $16.1 million in sales in the third quarter of 2018. 

Aurora said it lost CA$158.35 million in the first quarter, down from the second-quarter loss of CA$237.75 million but up 724 percent from its CA$19.2-million loss one year ago. Executive Chairman Michael Singer said getting to positive EBITDA would be a “game-changer.” Options traders made some big moves following the earnings report. The largest trades suggest the Aurora rally could soon run out of steam.

“I believe cannabis investors are starting to expect execution from the industry. Companies have been on an acquisition and going public binge, which has proven to be expensive,” Green Market Report CEO Debra Borchardt told Benzinga. 

“Now shareholders want to see revenues rising and losses declining. Patience will begin to wear thin as we move through the quarters this year.”

Finally, we learned that Jakob Ripshtein, President of Aphria Inc (NYSE: APHA), will resign from the company June 7 amid a wide management reshuffle.

Check out our story of the week: PTSD, Veterans And Suicide: Action Is Needed, And Cannabis May Help

Marijuana Stocks & ETFs

Over the last five trading days:

• The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) (TSE:HMMJ) lost almost 1 percent.

• The ETFMG Alternative Harvest ETF (NYSE: MJ) tumbled 1.8 percent.

• The AdvisorShares Pure Cannabis ETF (NYSE: YOLO) gained 0.1 percent.

• The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period down 0.8 percent.

Top marijuana stocks with market caps above $500 million trading on U.S. exchanges performed as follows over the last five trading days: 

Acreage Holdings (OTC: ACRZF): down 8.2 percent.

• Aphria Inc (NYSE: APHA): down 5.4 percent.

• Aurora Cannabis Inc (NYSE: ACB): up 3.95 percent.

• CannTrust Holdings Inc (NYSE: CTST): down 0.3 percent.

• Canopy Growth Corp (NYSE: CGC): down 6 percent.

• Cronos Group Inc. (NASDAQ: CRON): down 3.05 percent.

Curaleaf Holdings Inc (OTC: CURLF): down 13.6 percent.

Green Growth Brands Inc (OTC: GGBXF): down 9.9 percent.

• Green Organic Dutchman Holdings Ltd (OTC: TGODF): down 4.3 percent.

• Green Thumb Industries Inc (OTC: GGBXF): down 9.9 percent.

• GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH): down 1.8 percent.

Hexo Corp (NYSE: HEXO): down 3.1 percent.

Harvest Health & Recreation Inc (OTC: HRVSF): down 5.2 percent.

• iAnthus Capital Holdings Inc (OTC: ITHUF): down 6.5 percent.

Marimed Inc (OTC: MRMD): up 0.8 percent.

• MedMen Enterprises Inc. (OTC: MMNFF): down 4.6 percent.

OrganiGram Holdings Inc (OTC: OGRMF): up 12.7 percent.

• Scotts Miracle-Gro Co (NYSE: SMG): down 2.1 percent.

• Tilray Inc (NASDAQ: TLRY): down 8.4 percent.

In Other News

Cannabis industry infrastructure services provider Helix TCS Inc. (OTC: HLIX) announced the receipt of its application to list on the Canadian Stock Exchange, in addition to the company’s active OTCQB listing.

“As we set the stage for a global cannabis marketplace and the industry begins to attract broader financial and investor interest, we are excited about the prospect of listing on the CSE as it will bring our current and future investors increased liquidity, regardless of where they are located,” Zachary Venegas, executive chairman and CEO of Helix TCS, told Benzinga.

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Arizona-based Harvest Health & Recreation announced it closed the first tranche of its brokered private placement for gross proceeds of $100 million. Full story here.

Wholesale marketplace LeafLink began offering Metrc integration, allowing its clients to consolidate their Metrc and LeafLink workflows. The integration syncs with Metrc accounts, allowing users to view and manage Metrc data throughout the LeafLink experience.

Media veteran Felicia Palmer, founder of SOHH.com, the longest-running hip-hop website in the world, and her new company, Cannaramic, are suing Facebook Inc (NASDAQ: FB) after the social media behemoth rejected some ads around their upcoming Cannaramic Online Summit and temporarily suspended the event’s page.

The plaintiffs are being represented pro bono by attorney David Holland, the executive director for the New York chapter of marijuana advocacy organization NORML; they are seeking a jury trial to challenge Facebook’s stance on legal cannabis.

Hemptown Organics Corp., a hemp company that does business as Hemptown USA, said it raised CA$23.3 million ($17.2 million) to fund an expansion of its operations. Full story here.

Steven Ernest, former co-founder of Mazakali and JPMorgan Wealth Manager, joined Viridian Capital Advisors as director of business development. Alongside the accelerating growth and consolidation of the cannabis industry, Viridian is attracting top talent to its team as it continues to prove itself a leader in the cannabis capital markets.

Contract cannabis manufacturer Natura Life + Sience completed a $91-million private round of financing for the construction of a large, vertically integrated cannabis campus in California. Full story here.

Driven Deliveries Inc (OTC: DRVD) …

Full story available on Benzinga.com

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