Marijuana Money December 15, 2017

November was a great month for cannabis stocks. The MJIC North American Marijuana Index rose by 41% last month, led mostly by Canadian stocks again. Although the U.S. had its best month all year gaining 27% as companies rally ahead of California’s legalization on January 1. The Canadian Index rose by 52%.

In the U.S. marijuana index, 15 out of 17 stocks in the group experienced gains for the month. Comparatively, the Dow Jones Industrial Average rose 3.8% for the month, while the Russell 200 rose by 2.8%. The best performers included Golden Leaf Holdings (GLDFF) which rose by 15% for the month, MPX Bioceutical (MPXEF), which increased by 12% and MariMed (MRMD) which gained 10%.

The state of Colorado is now releasing sales data on marijuana transactions. Previously, the state only posted tax revenues, leaving researchers and journalists with guesswork as to how that translated into sales. So far, total sales through October have increased 42% year-over-year and tax revenues through November have increased 16%.

The big news in cannabis this week was the former CEO and founder of MassRoots (MSRT) regaining control of the company. Isaac Dietrich had been forced out of his role as CEO a few weeks ago in a boardroom coup, but in a stunning turn of events, he rallied shareholders to his side. Dietrich confronted the board saying he had the upport of 70% of the owners. So, Kveton and the board resigned as Dietrich took back his CEO title and installed his own choice of board members. The question is whether the $12 million CannaRegs deal will come back. Dietrich made it clear he would like to acquire the company if it is willing to return to the table. While there was criticism about the price MassRoots was willing to pay, CannaRegs would be immediately accretive.

The other big headline this week revolved around CanniMed Therapeutics and Aurora Cannabis. CanniMed is rejecting the hostile takeover by Aurora Cannabis and even asked the government and regulators to step in for help. One group declined involvement, while the Ontario Securities Commission scheduled a December 20 hearing.

Capital Raises

Aphria (APHQF) announced that it entered into an agreement with Clarus Securities Inc., for a C$100 million private placement bought deal. The Company plans to use the proceeds to finance the construction of additional production facilities in Canada and globally where cannabis is legally permitted as well making acquisitions and investments

Maricann Group Inc. (MRRCF) announced that it has entered into a letter of engagement with Eight Capital and Canaccord Genuity Corp. They have agreed to offer for sale special warrants for total gross proceeds of up to approximately C$20,000,000 Canadian dollars. That deal was upsized to C$35 million. Then Maricann also granted the Agents an option exercisable in whole or in part, at any time up to 48 hours prior to the closing of the Offering, to purchase up to an additional 15% of the Special Warrants at the Issue Price. If the Over-Allotment Option is exercised in its entirety, the aggregate gross proceeds of the offering will be C$40,250,000.

Acquisitions

EVIO Inc. (EVIO) announced on Monday it has entered into an agreement to acquire 60% of C3 Labs to expand further into Northern California as demand for analytical testing services heats up. EVIO CEO William Waldrop said that the proposed C3 Labs deal would give EVIO, based in Bend, OR., access to an 8,000 sq. ft. lab and become EVIO’s Northern California hub laboratory. The deal allows EVIO to focus on taking market share in California, as demand for testing services throughout the state is “expected to increase significantly.”

Canadian-based ABcann Global Corp. (ABCCF) is acquiring medical marijuana clinic Harvest Medicine for approximately C$3 million. ABcann is a cultivator that holds production and sales licenses under the Canadian medical marijuana program and Harvest Medicine is an education-focused, customer-centric medical marijuana clinic that has added 8,500 patients since opening in February of this year. Under the terms of the agreement, ABcann will pay Harvest Medicine C$1.5 million in cash and issue shares valued at roughly C$1.5 million based on a C$1.42 share price of ABcann stock.

Main Stage Stocks

Goldman Sachs analyst Salveen Richter upgraded GW Pharmaceuticals (GWPH) from Neutral to Buy and lifted her price target to $174, suggesting roughly 40 percent upside from current levels. The company announced on Wednesday that it has now reacquired full ownership of the development and commercialization rights to Sativex® (nabiximols) in the U.S.

Innovative Industrial Properties, Inc. (IIPR), announced a fourth quarter 2017 dividend of $0.25 per share of common stock, representing a 67% increase over the Company’s third quarter 2017 dividend of $0.15 per share of common stock.