Debra Borchardt
It’s time for your Daily Hit of cannabis financial news for November 4, 2020.
On The Site
Elections
The nation may not know who is president on election day, but the people have spoken when it comes to cannabis legislation. Arizona, Montana, New Jersey, and South Dakota have all legalized marijuana for adults 21 and older, as voters in each state approved their respective ballot initiatives at the ballot box. The Garden State has gone green as the closely watched state of New Jersey approved adult-use cannabis.
IIPR
Innovative Industrial Properties, Inc. (IIP)(NYSE: IIPR) reported total revenues of approximately $34.3 million for the third quarter ending September 30, 2020. This was a 197% increase from the prior year’s third quarter. It also beat the Yahoo Finance average analyst estimate for revenue of $29.63 million. The stock rose over 8% ahead of the company’s earnings to lately trade at $133.
IIP recorded net income available to common stockholders of approximately $18.9 million for the quarter, or $0.86 per diluted share, which beat the Yahoo Finance estimate for $0.78. The adjusted funds from operations (AFFO) were approximately $27.9 million, or $1.28 per diluted share. Net income available to common stockholders and AFFO increased by 205% and 192% from the prior year’s third quarter, respectively.
Ayr
Ayr Strategies (OTCQX: AYRSF) announced it is buying a vertically integrated operation in Arizona, including cultivation and processing facilities and three licensed dispensaries in a deal valued at $81 million. The deal will be made up of $10 million in cash, $41 million in stock (approximately 2.75 million shares priced at 10-day VWAP prior to announcement), and $30 million in seller notes. An additional 2 million shares may be payable upon the achievement of established cultivation targets through 2021 and 2022.
Psychedelics
Americans were decisive when it came to legislation on psychedelics, even if there wasn’t a clear winner in the presidential election. In Washington D.C., Initiative 81 secured enough votes from residents to pass. Initiative 81 needed to secure a simple majority to pass. The ballot initiative was originally proposed by Ward 6 resident and mother of two Melissa Lavasaniand will, when implemented, reform police priorities to ensure that DC residents benefiting from plant and fungi medicines are not police targets.
Oregon became the first state in the country to legalize psilocybin as voters in the state passed Measure 109. Oregon Live reported that Measure 109 was passing by 56.12% Tuesday at 8:50 p.m. with 1,832,513 votes counted. While D.C. decriminalized it, Oregon will be the first to permit supervised use statewide if that majority holds. The product will have to be stored and administered at licensed facilities.
In Other News
Aphria
Aphria Inc. (TSX: APHA) (Nasdaq: APHA) entered into an agreement of merger and acquisition to acquire SW Brewing Company, which is one of the largest independent craft brewers in the United States based on volume. Beginning with the flagship 420 beverage offerings, SweetWater has created an award-winning lineup of year-round, seasonal and specialty beers, a portfolio of brands closely aligned with a cannabis lifestyle. The approximately USD $300 million acquisition has been unanimously approved by Aphria’s Board of Directors and is expected to close before the end of December 2020 . Aphria expects this acquisition to be immediately accretive to EBITDA and diluted earnings per share. All dollar amounts in the press release are expressed in U.S. dollars, unless otherwise noted.
Canopy Growth
Canopy Growth (CGC) has announced that it will be transferring its U.S. stock exchange listing from NYSE to Nasdaq on November 13, 2020 after market close. Common shares of Canopy Growth are expected to begin trading as a Nasdaq-listed security on November 16, 2020, under the same symbol “CGC”. “By making the move over to Nasdaq, we are joining some of the world’s leading companies that share our passion and focus for innovation,” explained David Klein, Canopy Growth CEO.
