This Week in Cannabis Investing July 26th

This summer continues to be event-filled for the cannabis industry. In addition to the steady flow of company news, there was important industry news — some of it negative, most of it positive.

The mainstream media continues to obsess over CannTrust. There was also news that the FDA has cracked down on online sales of CBD products and “health claims” by U.S. industry leader, Curaleaf. This relates to many of the CBD-based products that Curaleaf offered for sale on its website.

Much more notable was the positive cannabis industry news this week. Retail cannabis sales in Canada have now been soaring at a double-digit pace for three consecutive months. Also, a major Canadian food retailer is committing up to CAD$380 million to move into the cannabis industry.

Monday, there was news from Zenabis Global on CAD$10 million in non-dilutive financing. SLANG Worldwide announced a deal to enter Greece’s cannabis market. Gabriella’s Kitchen reported a definitive agreement to acquire California-based Lulu’s Chocolates.

The Seed Investor pointed to exciting news for the Canadian cannabis sector – and cannabis investors: three consecutive months of double-digit growth in retail cannabis sales. In our opinion, this represents nothing less than the Canadian cannabis sector “turning the corner”. It also validates reporting by The Seed Investor last month that a mild build-up in Canadian cannabis inventories was just temporary.

Separately, The Seed Investor took a moment to puncture another anti-cannabis myth. No, “cannabis does not make you stupid”.

Tuesday, the news began with a report of progress from Yield Growth in its hemp manufacturing. Therapix Biosciences is merging with Destiny Biosciences in a stock-for-stock transaction. Acreage Holdings announced a new senior vice president. Sunniva reported that Kevin Wilkerson was moving up to the role of President. MYM Nutraceuticals announced an LOI for the sale of CAD$25 million of CBD-hemp biomass, via its 50%-owned subsidiary, BioHemp Naturals.

In a feature article, The Seed Investor asked the question: is it too soon to get into U.S. cannabis extraction? We noted the lack of publicly-listed vehicles, but pointed investors toward one candidate.

Wednesday, IONIC Brands announced closing on its acquisition of Zoots Premium Cannabis Edibles. Rocky Mountain Brands reported a CBD-hemp distribution deal. Delta 9 signed a one-year manufacturing deal with Westleaf. Neptune Wellness closed on its acquisition of SugarLeaf. Lexaria Bioscience and Hill Street Beverage Company announced a joint manufacturing partnership for cannabis-infused beverages. WeedMD entered into a supply agreement with Ignite International.

The Seed Investor looked at a lucrative new segment of the cannabis industry: CBD-rich hemp biomass and processed CBD isolate. We shone a spotlight on one company that is especially well positioned to capitalize on this market. We also reported on the FDA’s crack-down on Curaleaf. Only last week, The Seed Investor warned cannabis investors that the FDA remains a major obstacle in commercializing CBD within the United States.

Thursday, Green Thumb Industries announced a new California retail license. Auxly International reported a CAD$123 million investment by tobacco giant, Imperial Brands. Khiron Life Sciences was added to The Cannabis ETF. Heritage Cannabis announced a supply agreement with Cronos Group. Gabriella’s Kitchen acquired a California production facility. Namaste Technologies announced a settlement agreement for its class action lawsuit.

In separate feature articles, The Seed Investor looked at big news and big opportunity. The news was that food retailing giant Alimentation Couche-Tard (owner of Circle-K convenience stores) was jumping into the cannabis sector with up to CAD$380 million in “growth capital”. It’s now in position to acquire a controlling interest in Canadian cannabis retailer, Fire & Flower. With Couche-Tard’s 16,000 stores in 26 countries, we connected the dots on what this could mean for the future of cannabis.

Then we looked at a big opportunity in the United States: cannabis edibles. There are already billions of dollars on the table here. We explained why “edibles” could have more growth potential in the U.S. than most people suspect. And we took a quick look at a recent acquisition of a premium U.S. cannabis edibles brand.

Friday, The Seed Investor was busy with in-house reporting. We began by taking a closer look at the deal between Auxly and Imperial Brands. We explained why such agreements with tobacco companies are the proverbial ‘Deal with the Devil’.

We reported on a California-based cannabis-infused beverage maker that is eager to enter Canada’s imminent market for these products. We also explained why The Tinley Beverage Company thinks Canada is the place to be right now.

Finally, The Seed Investor published an open letter that was highly critical of some overly-negative reporting on the cannabis industry by Market Watch. We noted that when it comes to mainstream media reporting on cannabis, some things never seem to change.

DISCLOSURE: IONIC Brands and MYM Nutraceuticals are clients of The Seed Investor.