The Week In Cannabis: DEA Research Licenses, Wisconsin, An Israeli Index, M&A, And More

In the last week of 2020 — a year that saw the cannabis movement score major victories on national and international levels — marijuana stocks underperformed the wider market.

Over the last five trading days, including Dec. 24:

  • The ETFMG Alternative Harvest ETF (NYSE: MJ): lost 4.4%
  • The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): was down 3.8%
  • The Cannabis ETF (NYSE: THCX): tumbled 4.5%
  • The Amplify Seymour Cannabis ETF (NYSE: CNBS): declined 5.8%
  • The SPDR S&P 500 ETF Trust (NYSE: SPY) was up 1.4%

We also learned the U.S. Drug Enforcement Administration is expanding the number of research licenses it will grant to cannabis cultivators in 2021. Right now, only one entity, the University of Mississippi, holds this type of license.

“DEA believes a range of three to 15 growers is a reasonable sestimate for purposes of this economic analyses, with the understanding that the actual number could vary considerably,” the rule says.

Wisconsin Governor Tony Evers proposed cannabis legalization as a potential way to boost tax revenue, looking to offset the impact of the COVID-19 pandemic. The prospect of adult use is up for consideration in Wisconsin's 2021 budget proposal, but nothing has been decided so far.

In Israel, a new cannabis-focused index launched on the Tel-Aviv Stock Exchange. The index includes shares of nine companies belonging to the cannabis subsector under the biomed sector. The cannabis subsector includes companies in various medical cannabis sectors, such as research, sale, cultivation, production, and marketing.

The nine companies have a collective market cap of 1.7 billion shekels ($529 million).

Cannabis content is now available in Spanish on El Planteo.

Real estate finance firm AFC Gamma is going public on the Nasdaq under the ticker symbol “AFCG.” Seaport Global Securities, JMP Securities and Ladenburg Thalmann were appointed as underwriters. The goal is to raise up to $115 million, and become the second REIT focused solely on cannabis to list on a major exchange, with the first being Innovative Industrial Properties (NYSE: IIPR).

On Tuesday, shares of Aurora Cannabis (NYSE: ACB) saw unusual options activity. Call sweeps at $8.00 reflected the markets bearishness.

Financings And M&A

Calgary, Alberta-based Sundial Growers Inc. (NASDAQ: SNDL) acquired a special purposed vehicle that owns $58.9 million of Zenabis Global's senior secured debt. The loan carries interest at a rate of 14% annually, with a maturity date of March 31, 2025. In addition, it's secured by Zenabis' assets as …

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