During the past trading week (December 23 to 27), a prominent C-level executive was dismissed from his role at one of Canada’s largest cannabis companies.
Another Canadian cannabis firm saw a massive value drop on its announcement of a US$25 million registered direct offering, which will dilute the value of its existing shares.
Here’s a closer look at some of the biggest cannabis news over the week.
Aurora Cannabis dips during volatile week
In a sudden move, one of Aurora Cannabis’ (NYSE:ACB,TSX:ACB) more front-facing executives, Cam Battley, “stepped down” from his role as chief corporate officer, the company announced, ending his three year stint with Aurora.
A news release sent out last Saturday (December 21) was followed by a 6.4 percent drop in Aurora’s share value in Toronto on Monday (December 23).
The slump continued across the week, and the company opened at C$2.55 on Friday (December 27), its lowest point year-to-date.
While Aurora did not mention the specific reason for Battley’s shift, the company confirmed he gained a role as a member of the board of directors for privately held medical cannabis company MedReleaf Australia in November. Aurora holds a 10 percent stake in this venture, as well as 50 percent voting rights.
In the statement, Aurora CEO Terry Booth congratulated Battley on his work with the company. “We are grateful for Cam’s leadership and passion over his many years with Aurora. I am sure Cam will be successful as he moves on to tackle Australia,” he said.
Things took another dramatic turn, however, when it was revealed that Battley was asked to step down from his role. In an emailed statement to the Canadian Press, it wasn’t made clear why Battley was let go, but Aurora did say the move was a part of its effort to restructure its leadership strategy.
The rocky week continued for Aurora after The Coca-Cola Company (NYSE:KO) ended speculation that it plans to enter the cannabis market.
After the release of a since-deleted YouTube video in which a user claimed the firm was looking to launch a line of cannabidiol-infused Coca-Cola drinks in Canada, the company said it has no plans to throw its hat into the cannabis ring.
“These rumors are untrue,“ Coca-Cola said in an emailed statement to Bloomberg News. “As we have stated many times, we have no plans to enter the CBD market.”
In 2018, a BNN Bloomberg report indicated that the Georgia-based drink maker was in “serious talks” with the Canadian cannabis firm to create cannabis-infused beverages, which caused a boost for Aurora.
HEXO faces losses following share sale
Beleaguered cannabis company HEXO (NYSE:HEXO,TSX:HEXO) stumbled again this week after its US-listed shares dropped over 20 percent following the announcement of an agreement with institutional investors for the purchase and sale of almost 15 million of its common shares for US$25 million.
The Quebec-based cannabis company told investors on Thursday (December 26) that it plans to use the proceeds to fund its research and development operations, among other corporate purposes.
HEXO took a hit earlier this month with the release of its fiscal Q1 2020 results. It reported a net loss of C$62.4 million in the quarter, a 10.1 percent rise from the C$56.7 million reported in Q4 2019.
The company blamed a slow retail opening in key Canadian provinces for its disappointing results.
During an earnings call with investors and analysts, HEXO CEO Sebastien St-Louis said, “We don’t believe that the retail channel will be substantially built until the end of 2021 or part way through 2022. The illicit market channel will continue to thrive until retail access is brought to the majority of Canadians.”
Year-to-date, HEXO has fallen 57.9 percent in New York.
According to Origin House, an overwhelming majority — over 99 percent — of shareholders have already voted in favor of the transaction.
The all-stock deal — once called the “largest-ever public company acquisition” in the US cannabis industry — is moving forward on reduced terms with a non-brokered financing on the part of Origin House of over 9.7 million of its own shares. The new deal, announced last month, is supposed to help reinforce the balance sheet of the combined company, Cresco said in a statement.
This comes during a trying time for the firm, which has scrambled to acquire capital. It got its hands on C$103 million in funding in November, only to scrap that deal two weeks later in favor of an offering agreement with Canaccord Genuity to raise C$22 million in gross proceeds.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).
Canopy Growth to Participate in BofA Securities Virtual Consumer & Retail Technology Conference on March 11, 2021
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) (“Canopy Growth” or “the Corporation”) announced today that EVP & CFO Mike Lee will be participating in a fireside chat at the BofA Securities Virtual Consumer & Retail Technology Conference on Thursday, March 11, 2021 at 9:30am ET .
Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company”). The Company announces that further to its press release dated March 2, 2021, it has obtained TSX Venture Exchange approval to extend the closing date of its previously announced private placement of units (“Units”) until April 7, 2021. Each Unit is comprised of one (1) common share and one (1) warrant, exercisable for one common share at price of $0.11 per share, for a period of three (3) years from the date of Closing. The Company applied to extend the date of closing to allow a greater number of interested investors to participate.
For more information regarding the Company or the offering, please contact firstname.lastname@example.org, or