During the past trading week (December 9 to 13), a major Canadian cannabis firm locked down a permanent leader months after it fired its original CEO.
A marketing executive spoke about the regulatory headwinds that could hinder Canadian cannabis firms as they attempt to build brands in the country, and WeedMD (TSXV:WMD,OTCQX:WDDMF) further clarified its goals for the surprising acquisition and financing deal it announced last month.
Here’s a closer look at some of the biggest cannabis news over the week.
Canopy Growth hires Constellation exec as CEO
The news came months after the company fired former CEO and co-founder Bruce Linton in July following less-than-stellar quarterly results. Klein will take the helm on January 14.
Last year, Constellation pumped C$5 billion into Canopy as an investment.
Aside from his role as executive vice president and CFO at Constellation, Klein also serves as the chair on Canopy Growth’s board of directors.
“I look forward to working with the team to build on the foundation that has been laid, to develop brands that strongly resonate with consumers, and to capture the market opportunity before us,” Klein said.
From the beginning of the week to market close on Thursday (December 12), Canopy Growth shares rose 9.3 percent in Toronto.
Canadian cannabis stumbles on marketing
Canada’s strict rules against promotion and endorsement of products in the cannabis space have proven to be a barrier for businesses interested in building brand recognition.
One marketing expert says, however, that the laws laid out in The Cannabis Act reinforce the need for effective marketing strategies in the Canadian marijuana market.
Rebecca Brown, CEO of cannabis marketing firm Crowns Agency, told the Investing News Network (INN), “(The rules highlight the need) to understand who the consumer is, what their barriers are, what their needs are and how they want to be educated and informed.” She said that companies can then use that information to lead marketing campaigns while maintaining compliance.
Brown said a targeted marketing approach will help firms get the most out of their brands, but since the industry is still young she hasn’t seen too many standouts just yet.
“There is a ton of competition, but I think the number of brands who you can kind of point to and say, ‘They are not going after everyone, they’re going after a very particular kind of person, they’re trying to solve a very particular need’ — that is a small handful of brands,” Brown told INN. “I think that’s the opportunity.”
WeedMD CEO talks future goals following acquisition/financing deal
WeedMD CEO Keith Merker said his firm is now focused on closing its surprising all-stock, arm’s length acquisition of Starseed Holdings, which came with a C$25 million equity investment from Starseed’s largest benefactor, the Laborers’ Pension Fund of Central and Eastern Canada.
“WeedMD is currently focused on scaling production and closing the Starseed acquisition, along with securing the capital investment that is part of the transaction,” Merker told INN in an emailed statement. “Once complete, we’ll be starting 2020 on a fully funded, financially stable footing, especially as the company moves towards generating positive EBITDA in 2020.”
The announcement of the deal and funding, which came in late November, accompanied the firm’s quarterly results and was followed by a mixed reaction from the stock market.
Merker told INN he thinks the volatility came as a result of the company’s packaging of all the news, and he hopes investors will “recalibrate” their opinion of WeedMD with its strengthened position in the recreational market and its newfound access to Starseed’s insured medical cannabis channel.
CannTrust Holdings (NYSE:CTST,TSX:TRST) said this week it could get booted off the New York Stock Exchange because of its low share price.
The company said it received a notice from the exchange stating that since its share price has dipped below the US$1 requirement to list, it now has six months to get its market value over the price threshold for at least 30 days in a row or risk delisting.
CannTrust opened on Friday (December 13) at US$0.84.
Ontario plans to scrap the cap on the number of retail cannabis stores in the province.
In a news release sent out on Thursday (December 12), Attorney General Doug Downey said the province plans to “open the cannabis market as responsibly as possible.”
“We have said all along that opening more legal stores is the most effective way to combat the illicit market, protect our kids and keep our communities safe. That is our number one priority,” he added.
Cannabis retailers can begin handing in operator license applications to the Alcohol and Gaming Commission of Ontario on January 6, 2020, and their store authorization applications on March 2, 2020. The province expects to hand out 20 store authorizations a month once it starts issuing licenses in April.
Finally, on Wednesday (December 11), MedMen Enterprises (CSE:MMEN,OTCQX:MMNFF) told investors it has laid off 20 percent of its corporate staff. MedMen said it has “strategically reduced its corporate headcount” by over 40 percent in the last 30 days, representing savings of about US$20 million in annual salary payments.
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.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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