Debra Borchardt
It’s time for your Daily Hit of cannabis financial news for September 24, 2019.
On The Site
Altitude
New York-based investment firm Altitude Investment Management, plc (AIM plc) is taking the EU plunge and making a $5.5 million investment in Switzerland-based CBD company KannaSwiss AG (KannaSwiss).
“My partners and I have been laser-focused on investing in the legal cannabis industry since 2016. We raised approximately $31 million in our first cannabis vehicle which has been invested in 19 companies across the industry,” said Roderick Stephan, co-founder, and partner of Altitude. “While the CBD/wellness market is thriving, the medical and legal cannabis markets in Europe are in their infancy. We believe that over the next couple of years, medical cannabis will be generally available across Europe and some countries will also allow recreational consumption. The market is poised for tremendous growth just as it has in the U.S.”
Aleafia
Aleafia Health Inc. (TSX: ALEF)(OTC: ALEAF) told the market on Tuesday that it will achieve positive net income for the quarter ending September 30, 2019. The company also stated that it had $51 million in cash on hand.
“Through prudent capital allocation, coupled with strong cannabis revenue growth, we now expect to deliver the first profitable quarter in Aleafia Health’s history, a major milestone. This will mark our second consecutive quarter featuring both substantial expense reductions and increased revenues as we continue to drive towards sustainable, compliant growth that will deliver real benefits to our stakeholders,” said Aleafia Health CEO Geoffrey Benic.
California Law
We had the opportunity to read California Doubles Down on Taxing the Underground Economy: What AB 1296 Could Mean for Tax Enforcement, which appeared in the TaxLitigator blog written by Sandra R. Brown, Esq. The article provides an overview of Assembly Bill [AB 1296] – Joint Enforcement Strike Force on the Underground Economy: Labor Enforcement Task Force[1].
AB 1296 would require, among other things that:
“This bill would expand the required membership of the strike force to include the Department of Justice, the California Department of Tax and Fee Administration, and the Franchise Tax Board. The bill would authorize the strike force to invite other specified agencies to serve in an advisory capacity. The bill would expand the duties of the strike force to include enforcement activities regarding labor, tax, insurance, and licensing law violators operating in the underground economy and authorize the provision of investigative leads to participating agencies.”
In Other News
Cannabis Bill Up For Vote
From the NCIA website: On Wednesday, the House of Representatives will vote on legislation that would allow financial services providers to work with state-legal cannabis businesses without fear of federal prosecution. This historic bill is the first standalone cannabis policy reform to receive a full vote in the House. Livestream of the vote will be available here.
The bill was originally introduced by Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH), and Warren Davidson (R-OH) with more than 100 other original cosponsors. It currently has 206 cosponsors in the House. The bill is being voted on suspension, and needs a two-thirds majority, or 290 votes, to be approved in the House.
“The SAFE Banking Act would greatly improve public safety and transparency, and represents a chance to even the playing field by allowing small businesses and people from marginalized communities participating in this emerging industry to access traditional lending,” said Aaron Smith, executive director of the National Cannabis Industry Association (NCIA). “Current banking regulations disproportionately hurt small businesses, women, and people of color, and we cannot afford to wait any longer while they are being excluded from the opportunities created by legal cannabis markets. We urge every member of the House who is concerned about safety and fairness to support this bill.”
“After more than six years of advocacy from NCIA, the bill sponsors, and allied organizations on cannabis banking, we are poised to take a huge leap toward more sensible cannabis policies at the federal level,” continued Smith. “We commend this Congress for finally addressing this issue.”
