??? Alright, it's your turn to choose
This article was published 2/19/2020 on Cannablurbs, a weekly newsletter covering the business, strategy and policy of legal cannabis. If you like it, sign up here for the far more attractively formatted and convient email.
Cannablurbs
What’s Next: Hopefully at this point you’ve had a chance to read one of our long reads within Cannablurbs. To date, we’ve heard the perspectives of leaders across the industry to dive into canna-beverages (why they matter, a few different brands), a guide to legalization, distribution dynamics, social consumption, dosage, and 2020 predictions. We've got even more great content in the coming weeks, but also had a quick question.
The Ask: Now, we’re interested in what subscribers are most interested in - we’d love to get your thoughts too! Subscribe here to help us decide future articles. We just asked our readers to decide between:
- Deep dive into U.S. multi-state operators
- Strategic outlook on Canadian licensed producers
- Value chain of canna-tech businesses
- Landscape of canna-beverages
Fighting For Best In The Show-Me: Missouri legalized medical marijuana in 2018, but the lengthy application and licensing process means the market is just getting off the ground in 2020. The launch is, of course, mired in some degree of controversy, as nearly 2,200 applications were filed for just 348 licenses. Contested issues include seemingly inexplicable variances in scoring identical applications, concerns about the corporate parentage of the blind scoring company, and even Deloitte’s role in the process.
Why It Matters: It all comes down to what’s fair, right? Ideally, these processes balance measures of merit, predictors of future success, and components of social equity to determine who wins. But, in reality, it’s often more about application writing as a core competency, “utilizing” social equity in business plans, and (in the insidious cases) having insider knowledge or relationships with those scoring. It’s perhaps not surprising that, when I recently asked an executive of a large MSO what the ideal market/regulatory structure might look like, they thought the laws of the limited license state where they had the most market share were best. If you’ve figured out the rules of the game, you’re not looking to change them.
Canopy Breaks Formation: We talked last week about the efforts of Aurora and other Canadian LPs to combat financial struggles, and mused whether mega-producer Canopy Growth might be next in line to announce disappointing results and potential layoffs. That was definitively not the case, as the company posted financial performance well above market estimates, with net revenue of C$124 million (nearly C$20 million higher than expected), as well outperformance in earnings. The company was buoyed by growth in recreational sales, strong medical and international sales, and nearly 50% growth in its Storz & Bickel vaporizer business (which it acquired last year).
Why It Matters: It was decidedly good news, which lifted not only Canopy’s stock, but also stocks across the sector. The company still has its work cut out for it: with concerns around inventory levels and the deeply negative cash flow, they’ll probably be “rightsizing” in the next quarter to help cut their cash burn. Rome was not built in a day, as they say, and one good quarter does not make a winner. But, with a substantial war chest of cash and promising results, Canopy seems as likely as any of the Canadian LPs to benefit in a 2020 rebound.
Quick Hits
- New York Hits Snags In Legalization: Cuomo has staked a lot on legalization, but… he did last year, too, and New Mexico has shown recently it isn’t just a governor’s decision.
- Trump Requests CBD Regulation Funds: $5 million would support developing regulations and cracking down on bad actors. Nice early start for prediction #3!
- A Brief Global History Of The War On Cannabis: Interesting perspective beyond the typical U.S.-centric story. Perhaps we’ll make the source as our first book review...
- Amsterdam May Ban Tourists From Buying Weed: The mayor wants to clean up what many residents see as an out-of-control tourism situation that supports illegal suppliers.
- New Study Digs Into Hemp… For Horses?: Might seem odd, but animal stress is a big deal, especially for livestock. If CBD can chill out Smarty Jones, it might be viable in your porkchop’s animal feed, too.
- Inside Toronto’s Cannabis-Friendly Sex Club: Well… okay. We’ve talked a lot about the importance of social consumption, but this is taking “social” to a different level.
Research Rips
- There’s No Evidence Of Withdrawal Syndrome With CBD
- Antacid Use Decreased In Colorado After Legalization
- Workers Compensation Claims Decline Post Medical Marijuana Legalization
- CBD May Help With Memory Impairment After Chronic Meth Use
- Cannabis Increases Susceptibility To False Memory When Intoxicated
State-by-State
- Medical Marijuana Opportunities Could Swell In Several States This Year
- Rumors Of Marijuana Legalization Swirl Ahead Of Minnesota State Legislative Session
- Kentucky Advances Medical Cannabis Legalization Bill
- Lower Profile Cannabis Bills Headed For Floor Debates In New Mexico
- Kentucky Lawmakers Approve Medical Marijuana Bill In Committee Vote
- Alabama Lawmakers To Consider Medical Marijuana Bill
This article was published 2/19/2020 on Cannablurbs, a weekly newsletter covering the business, strategy and policy of legal cannabis. If you like it, sign up here for the far more attractively formatted and convient email.