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This article was published 3/18/2020 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 convenient email.
Cannablurbs
Tell All Your Friends: Just a thanks from Cannablurbs for your readership - it’s a pleasure to share our thoughts on this constantly evolving, game-changing industry every week. With this newsletter now over a year and half old since its original launch, we're excited to roll out new ways to interact and build upon this awesome community of thousands of readers (so stay tuned...).
Why It Matters: As a free, non-directly monetized endeavor, we’re in this to be a fun and fair analytical voice within cannabis (and trying to win all the internet points we can, obviously). To that end, we highly encourage you sharing with friends and encouraging/badgering them to subscribe. If you’re finding yourself forwarding along the newsletter consistently, or just enjoying it, spreading the word helps make this all possible. Plus, they'll probably appreciate the fresh reading material for their corona-tines...
Reeling From ‘Rona: Speaking of (and as you’re hopefully very, very aware), coronavirus concerns escalated significantly over the past few weeks, with an inflection point in U.S. awareness after the closure of major sports leagues and events (lesson: if you want Americans’ attention, take away their sports). Interestingly, the crisis has actually precipitated substantial demand in some geographies (for instance, Canada, the Netherlands and parts of the U.S.). However, the outlook remains far from bullish, as many jurisdictions move to semi-quarantines or substantial store closures.
Why It Matters: Because the coronavirus is affecting everything at this point. The modern world has never experienced anything like this and the repercussions will be global in scope and local in impact. For cannabis, it’s now about far more than just supply chain implications. With the economic outlook looking increasingly recessionary, cannabis companies that were already in dire financial straits will likely see their window for improvement deteriorate, and otherwise healthy companies may struggle. Legalization campaigns may struggle to gain sufficient signatures with public gatherings and foot traffic at a crawl. Most importantly, definitely don’t puff, puff, and pass with too many people as we’re trying to flatten the curve.
Raising the Stakes: Cannabis companies continue to try and buffer their balance sheets with cash, even at highly dilutive terms. Harvest Health announced a private placement of up to $100 million at $1.41/share, Tilray announced a $90 million registered offering at $4.76/share, and Vireo Health is doing a private placement of $10 million at C$0.77/share. While all represent substantial declines from peak valuations (Harvest at over $10, Tilray nearly $300, and Vireo nearly $5), they also more notably also represent discounts to the companies’ initial valuations when they went public.
Why It Matters: These companies are definitely not raising from a position of strength, but this is moreso about living to fight another day, period. With the coronavirus dampening the economic outlook and capital availability broadly, these raises might be the lifeline that keeps the boats afloat. It’s not a great sign that they’re raising at these terms, but, hey, it beats not being able to raise at all...
Quick Hits
- Tilray Reverse Merger Hit With Challenge: Tilray/Privateer. Northern Swan/Clever Leaves. Hypur/Hypur Ventures. In cannabis, the line between investor and operator can be quite ambiguous, which creates its own challenges.
- Jason Vedadi Departs Harvest Health: Keeping in line with last week’s theme, Harvest (quite stealthily) announced its Executive Chairman will be stepping down. Hmm...
- Pharma CBD Reduces Seizures More Than Artisanal: “Artisanal CBD”? Is this a thing now? That said, this is… not surprising, and hopefully the case for most drugs?
- House Panel Approves Medical Marijuana Bills For Vets: Still a long road (House, Senate and Trump approval), but these federal cannabis bills have the best odds to pass this year.
- Legalizing Marijuana Increases Housing Prices: Unexpected? Yes. While the causes are somewhat unclear, it’s nice evidence against a common legalization complaint. Woo!
Research Rips
- Different Doses of CBD Were Efficacious In Reducing Seizures
- Cannabimovone (CBM) Could Be Useful in New Therapies
- CBD Could Represent A Promising Nontoxic Therapeutic For Tumors
- Sativex Could Be Useful For MS-Resistant Spasticity
- Cannabinoids Could Reduce Brain Tumour Growth
- Prenatal Cannabis Causes Effects On Behavioral Profile Of Offspring
- Single Psilocybin Dose Associated With Long-Term Increased Mindfulness
- Psychedelics, but Not Ketamine, Produce Persistent Antidepressant-like Effects
State-by-State
- Iowa House Passes Medical Bill Raising THC Limit
- Medical Marijuana Bill Up For Debate In Tennessee Senate Committee
- Mississippi Lawmakers Put Competing Measures On Medical Bill
- Alabama Senate Approves Medical Marijuana Bill
ICYMI
Recapping some of our best and most recent long reads
- Keeping It All In the Family: Rejuvia’s founders are betting that a cross-generational family team and deep medical roots will be a winning combo in CBD.
- Why 2020 Will Be A Banner Year For Investing In Cannabis: (pdf link) Karan Wadhera (Partner @ Casa Verde Capital) on the opportunities in cannabis investing this year
- Why Just Build A Cannabis Brand When You Can Find Its Soul?: Shawn Gold (CEO @ Pilgrim Soul) on what to expect in the oncoming wave of cannabis brands
- Reimagining How We Drink: Can Cann reshape social drinking and cannabis consumption all at once? Co-founder Luke Anderson thinks so.
- What’s Coming For Cannabis In 2020?: In January, we pulled out our crystal ball and made our biggest predictions for the year. Stay tuned!
This article was published 3/11/2020 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 convenient email.