The Week In Cannabis: Tilray-Aphria Merge, Aurora Continues Layoffs, Financings, Earnings, M&A

Cannabis stocks traded up this week, following news of the merger between Aphria (NASDAQ: APHA) and Tilray (NASDAQ: TLRY). Benzinga spoke with Aphria CEO and chairman Irwin D. Simon, who will maintain those two positions in the new company, and Tilray CEO Brendan Kennedy, who will serve in the new corporation’s board of directors. The executives shared details on how the deal came to be, and their expectations for the future, which, they say, doesn’t include massive layoffs. For the full story, click here.

Cantor Fitzgerald’s analyst Pablo Zuanic praised the merger. The Canadian cannabis sector is in need of consolidation due to the oversupply problems and “historically low flower retail prices,” he explained.

Green Market Report CEO Debra Borchardt told Benzinga the Aphria/Tilray merger “was certainly a good deal for Tilray shareholders, while the Aphria shareholders will probably have to wait a bit before they see the benefits of this deal. The combined company will definitely be a powerhouse of revenue, there is no question about that.”

ETFs

Benzinga’s ETF Professor argued a variety of exchange-traded funds are poised to benefit, perhaps none more so than the Amplify Seymour Cannabis ETF (NYSE: CNBS).

“The status of CNBS as a credible play on this takeover rumor is easy to explain: Its Aphria weight outpaces that of many of its rivals. Entering Wednesday, CNBS allocates 9.93% of its weight to that stock, making it the fund's largest holding, according to Amplify data,” he said in an article.

ETFs closed on the green. Over the five trading days of the week:

  • The ETFMG Alternative Harvest ETF (NYSE: MJ): gained 0.8%
  • The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): was up 4.7%
  • The Cannabis ETF (NYSE: THCX): rose 2.5%
  • The Amplify Seymour Cannabis ETF (NYSE: CNBS): advanced 2.5%
  • The SPDR S&P 500 ETF Trust (NYSE: SPY) was up 0.5%.

Politics

The MORE Act's status remains uncertain, but some cannabis legislation is finding success. This week, the Senate passed the Cannabidiol and Marihuana Research Expansion Act. The move follows the House's passage of the bill last week. The bill would address several areas of research and development if enacted into law, according to Marijuana Moment. It also intends to revise the research application process for studies centered on cannabis. 

Policymakers in Washington State will consider letting residents cultivate marijuana at their homes. According to Marijuana Moment, the bill was pre-filed last week by Shelley Kloba, who represents Democrats and Republican rep Drew MacEwen. It would allow adults 21 and older to grow up to six cannabis plants per person.

New Jersey lawmakers have passed a measure to allow a recreational marijuana marketplace in the Garden State. The legislation will now be sent to Democratic Gov. Phil Murphy, who is expected to sign the bill. Once that happens, New Jersey cannabis businesses will be able to offer recreational weed within six months.

At this year’s MJBizCon, Resource Innovation Institute previewed the 2021 Cannabis Water Report, which will be published in February via a partnership with New Frontier Data and Berkeley Cannabis Research Center. The preview revealed that, in aggregate, the regulated, legalized cannabis industry uses significantly less water than other major agricultural crops. The report recommends that evaluation of future cannabis water efficiency be based upon canopy square footage, not plant count, as it has in the past.

“Climate change should be top of mind for everyone in agriculture including the cannabis industry,” said Derek Smith, executive director of the Resource Innovation Institute, citing how droughts and wild fires impact areas where cannabis cultivation takes place. "It’s in our best interest to make sure we optimize water usage throughout every stage of the cultivation process," he added.

Gage Cannabis Co. secured a $20 million investment from JW Asset Management, LLC as part of the company's Reg A+ equity financing. The investment will provide Gage with resources to accelerate the expansion of its retail and cultivation footprint and pursue accretive acquisitions.

“JW Asset Management is widely recognized as one of the premier investors in the cannabis sector. Their participation provides Gage with a strong balance sheet that enables us to further establish our brand in one of the fastest-growing cannabis markets in the United States," Fabian Monaco, president of Gage, told Benzinga. "We are confident in executing on our 2021 goals, driven by the growth of both the cultivation and dispensary arms of our business. We are fortunate to have developed a strong relationship with JWAM and are grateful for their support as we capitalize on the opportunities ahead in Michigan.”

Tyson Ranch, a packaging and licensing company founded by Mike Tyson, is expanding into Oklahoma, one of the fastest growing medical cannabis markets in the United States. One of Oklahoma's premier medical cannabis dispensaries, COOKIES, will begin carrying Tyson Ranch's Undisputed 87 Pre-Rolls starting on Saturday, Dec. 19.

“With Oklahoma being one of the hottest cannabis markets in the United States, it made a lot of sense to partner with Tyson Ranch to bring the best in health and wellness to the medical cannabis patients of Oklahoma,” …

Full story available on Benzinga.com

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