The Morning Blunt

Volume 2| Issue 22

October 22, 2018

“Every time we launch a feature, people yell at us.”

–Angelo Sotira

Stock Market

The Green Organic Dutchman Holdings Ltd. Announced Friday that it received CA$76M for expansion efforts from Canaccord Genuity Corp. TGOD closed a bought deal involving 10.9M units and 1.5M warrants at CA$6.85.

Aurora completed a spinoff of Australis Capital units to its shareholders representing a one time 1% dividend based on current prices after it accessed public markets and receiving a 1000% value increase.

Keith Speights of the Motley Fool weighs in on the top shorted stocks in the cannabis industry, and Tilray doesn’t make the cut. MedMen Enterprises, Organigram Holdings, and CannaRoyalty are the top shorted stocks investors are betting against.

Cannabis loyalty software platform springbig has grown 685% from September 2017 to September 2018 and has a userbase of 1.9M consumers.

Global News

On Tuesday October 23rd an online event hosted by the National Institute for Cannabis Investing will be led by former Speaker of the House John Boehner who will be lecturing on the virtues of cannabis investing. Follow the link to register for the American Cannabis Summit.

Regardless of your stance on cannabis, it is likely to be legalized eventually, begging the question how to regulate cannabis? More countries are likely to legalize before Australia, however if done correctly Australia hopes to legalize in the safest way after research on the health effects of cannabis in other countries is conducted.

US News

Until October 31st the FDA is accepting comments on how cannabis should be classified under international drug treaties. These comments will be considered in a statement to be delivered next month to the WHO regarding the liability of cannabis.

Wholesale cannabis could bottom out at $30 an ounce by Christmas in places like Oregon with the recent harvest flooding the already oversaturated market. Data suggests Oregon has overproduced by ten times its annual need multiple years in a row, leaving over 800K pounds of unsold cannabis. Take a look at other factors driving consumer costs down.

California’s everchanging business regulations surrounding cannabis firms was updated Friday by state officials. Among some of the topics discussed were inventory reductions for drivers, issues around third-party delivery companies, packaging, and allowing cannabis distribution and consumption at licensed events. Check out the recent modifications proposed by regulators in the most recent draft of the industry rules.

Los Angeles based cannabis firm MedMen purchased Monarch Wellness Center Dispensary in Scottsdale Arizona and its 20K square-foot cultivation facility in Mesa. MedMen made the agreement where 80% of Monarch was paid out in shares and 20% in cash. This acquisition comes a week after MedMen branched into Illinois with the acquisition of PharmaCann.

Southern California is struggling with a barrage of problems regarding limited licensing, testing, supply shortages, and strong black-market competition. Though regulations, policies, and crackdowns have been implemented, little has remedied California’s growing pains.

Costa Mesa city planning commissioners will consider four applications for proposed cannabis manufacturing and distribution facilities. The four companies applying are Aureus LLC, SW Ventures LLC, TEVA Labs, and Distillate Co. LLC.

California has moved forward in favor of cannabis delivery companies who officially are allowed to operate in communities who have banned storefront locations.

Redding California voters will decide the tax fate of the growing number of cannabis businesses in the city. An estimated $750K could be raised annually for the city which would go back into ensuring cannabis businesses are properly regulated.

Cannabis Strategic Ventures Inc.’s subsidiary PureOrganix a brand of high-quality cannabis oil that is compliant to the Current Good Manufacturing Practices is now available in legal dispensaries throughout the state of California. Further PureOrganix plans to expand to other states and Canada within the next year.

Canada News

Canada’s cannabis shortage may ultimately lead to further consolidation in an effort to grow and supply stores with more products. With few heavily funded cannabis firms and players from outside the market taking an interest in the sector, consolidation will accelerate.

Though weed has been legal only a few short days, VICE met with illegal dealers to discuss the future of the black-market industry. Dealers seemed unconcerned about the legal ramifications of getting caught, and few felt they were threatened by new recreational competition.

Conducting more than 12,000 transactions on the first day of legalization, Nova Scotia totaled just over $660K in sales, $47K of those were online purchases. There have been rumors that the age limit for online purchasing has been tampered with and officials are looking into it.

Ontario will have no storefront cannabis shops until April 2019, however that hasn’t stopped online sales from booming. The Ontario Cannabis Store, an online cannabis sales platform, reported to have received over 100K online orders in the first 24 hours of operation.

Science

CEO of Sundial Growers Torsten Kuenzlen believes that most of the healing benefits of cannabis are still untapped and require further research. As prohibition on cannabis comes to an end, researchers now can delve into over 100 different cannabinoids and their functions on the CNS.

New research is being presented in Montreal linking recreational cannabis use with the risk of stroke at the World Stroke Congress. The study found a steady increase of risk which rose .2% in habitual users. The reason behind the potential link is believed to be caused by the cerebrovascular effects of cannabis.

Medical CBD has been shown to increase the lifespan of mice receiving chemotherapy by three times than those who only received chemotherapy. Human trials are hoped to increase the life expectancy of those with pancreatic cancer.

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