CANNABIS 3Q19 EARNINGS AND 2020 OUTLOOK: THE STORY IN 33 CHARTS AND 5 TAKEAWAYS

As 2019 draws to a close and we move into 2020, we analyze the latest earnings, management guidance, and CY20 revenue estimates of cannabis companies to identify trends that will matter the most in the coming year. As the industry tries to emerge from a tough year that presented headwinds in the form of oversupply, shortage of retail outlets, senior management exits, and compliance issues, among others, we present our analysis in 33 charts and 5 takeaways:

Takeaway 1: Input materials and U.S. MSO and SSO companies will dominate investor attention in 2020 thanks to their stronger fundamentals, long growth runway, and the illegal-to-legal value migration in the U.S.

Takeaway 2: Canadian LPs and diversified cannabis companies will have a tough and volatile 2020 as supply settles and products are launched, but stock prices suggest that weakness in fundamentals is factored in and a floor is in place for leaders.

Takeaway 3: Medical cannabis will remain a segment for bottom-up stock pickers while change in pricing and competitive intensity will be the key areas to monitor for CBD/Hemp names.

Takeaway 4: Correlation between cannabis stocks will breakdown as investors will distinguish between leaders and laggards based on fundamentals, i.e. free cash flow generation, management team strength, and market leadership.

Takeaway 5: Balance sheet strength will matter more than ever as the funding environment tightens and deals dry up; companies with adequate capital will take market share from peers.

 

Chart 1: Revisions to CY20 Revenue Estimates Suggest That Input Materials and US MSOs & SSOs Will Win While Canadian LPs, Diversified Cannabis, and CBD/Hemp Companies Are Likely to Struggle Next Year

Chart 1: Revisions to CY20 Revenue Estimates Suggest That Input Materials and US MSOs & SSOs Will Win While Canadian LPs, Diversified Cannabis, and CBD/Hemp Companies Are Likely to Struggle Next Year

Chart 1: Revisions to CY20 Revenue Estimates Suggest That Input Materials and US MSOs & SSOs Will Win While Canadian LPs, Diversified Cannabis, and CBD/Hemp Companies Are Likely to Struggle Next Year. Source: Intro-Blue

 

Chart 2: The Bounce Back in CBD/Hemp and Canadian LP Stocks After 3Q19 Earnings Suggests That the Worst is Factored into Stock Prices

Chart 2: The Bounce Back in CBD/Hemp and Canadian LP Stocks After 3Q19 Earnings Suggests That the Worst is Factored into Stock Prices Source: Intro-Blue

Chart 2: The Bounce Back in CBD/Hemp and Canadian LP Stocks After 3Q19 Earnings Suggests That the Worst is Factored into Stock Prices. Source: Intro-Blue

 

Chart 3: The Green Organic Dutchman (TGODF) and Charlotte’s Web Holdings (CWBHF) Gained the Most After Their 3Q19 Earnings Calls While Delta 9 Cannabis (VRNDF) and Cresco Labs (CRLBF) Were the Biggest Losers

Chart 3: The Green Organic Dutchman (TGODF) and Charlotte's Web Holdings (CWBHF) Gained the Most After Their 3Q19 Earnings Calls While Delta 9 Cannabis (VRNDF) and Cresco Labs (CRLBF) Were the Biggest Losers Source: Intro-Blue

Chart 3: The Green Organic Dutchman (TGODF) and Charlotte’s Web Holdings (CWBHF) Gained the Most After Their 3Q19 Earnings Calls While Delta 9 Cannabis (VRNDF) and Cresco Labs (CRLBF) Were the Biggest Losers. Source: Intro-Blue

 

INPUT MATERIALS, AND REAL ESTATE & INVESTORS COMPANIES STOOD OUT IN A WEAK 3Q19 FOR THE CANNABIS INDUSTRY

Chart 4: All Input Materials Companies and Real Estate & Investment Firms Delivered a Top Line Beat in 3Q19…

Chart 4: All Input Materials Companies and Real Estate & Investment Firms Delivered a Top Line Beat in 3Q19… Source: Intro-Blue

Chart 4: All Input Materials Companies and Real Estate & Investment Firms Delivered a Top Line Beat in 3Q19… Source: Intro-Blue

 

Chart 5: … And Outperformed Canadian LPs Whose Revenue Came In 43.7% Lower Than Expected

Chart 5: … And Outperformed Canadian LPs Whose Revenue Came In 43.7% Lower Than Expected Source: Intro-Blue

Chart 5: … And Outperformed Canadian LPs Whose Revenue Came In 43.7% Lower Than Expected. Source: Intro-Blue

 

Chart 6: The Broadly In-Line 3Q19 of Medical Cannabis Firms, Coupled with Outperformance of Input Materials and Real Estate & Investment Companies, Ensured That the Industry-Wide Revenue Miss Was Restricted to 12.7%

Chart 6: The Broadly In-Line 3Q19 of Medical Cannabis Firms, Coupled with Outperformance of Input Materials and Real Estate & Investment Companies, Ensured That the Industry-Wide Revenue Miss Was Restricted to 12.7% Source: Intro-Blue

Chart 6: The Broadly In-Line 3Q19 of Medical Cannabis Firms, Coupled with Outperformance of Input Materials and Real Estate & Investment Companies, Ensured That the Industry-Wide Revenue Miss Was Restricted to 12.7%. Source: Intro-Blue

 

INPUT MATERIALS IS THE ONLY SEGMENT WHOSE CY20 REVENUE ESTIMATES HAVE BEEN MARKED HIGHER

Chart 7: Positive Revisions to CY20 Estimates Are Concentrated Among Input Materials and Technology & Ancillary Plays …

Chart 7: Positive Revisions to CY20 Estimates Are Concentrated Among Input Materials and Technology & Ancillary Plays … Source: Intro-Blue

Chart 7: Positive Revisions to CY20 Estimates Are Concentrated Among Input Materials and Technology & Ancillary Plays … Source: Intro-Blue

 

Chart 8: … While Expectations from Canadian Cultivation and Production Companies Have Moderated After 3Q19

Chart 8: … While Expectations from Canadian Cultivation and Production Companies Have Moderated After 3Q19 Source: Intro-Blue

Chart 8: … While Expectations from Canadian Cultivation and Production Companies Have Moderated After 3Q19. Source: Intro-Blue

 

Chart 9: Industry-Wide CY20 Revenue Estimate Now Stands at $17.9 billion, ~13% Lower Than Before 3Q19 Earnings

Chart 9: Industry-Wide CY20 Revenue Estimate Now Stands at $17.9 billion, ~13% Lower Than Before 3Q19 Earnings Source: Intro-Blue

Chart 9: Industry-Wide CY20 Revenue Estimate Now Stands at $17.9 billion, ~13% Lower Than Before 3Q19 Earnings. Source: Intro-Blue

 

MEDICAL CANNABIS FIRMS DELIVERED THE BIGGEST BEATS IN 3Q19, WHILE CANADIAN LPs PRODUCED THE BIGGEST MISSES

Chart 10: Top 10 3Q19 Beats — Dominated by Medical Cannabis Firms

Chart 10: Top 10 3Q19 Beats — Dominated by Medical Cannabis Firms Source: Intro-Blue

Chart 10: Top 10 3Q19 Beats — Dominated by Medical Cannabis Firms. Source: Intro-Blue

 

Chart 11: Top 10 3Q19 Misses — Dominated by Canadian LPs

Chart 11: Top 10 3Q19 Misses — Dominated by Canadian LPs Source: Intro-Blue

Chart 11: Top 10 3Q19 Misses — Dominated by Canadian LPs. Source: Intro-Blue

 

Chart 12: Top 10 CY20 Positive Revisions — Led by Medical Cannabis and Real Estate & Investors

Chart 12: Top 10 CY20 Positive Revisions — Led by Medical Cannabis and Real Estate & Investors Source: Intro-Blue

Chart 12: Top 10 CY20 Positive Revisions — Led by Medical Cannabis and Real Estate & Investors. Source: Intro-Blue

 

Chart 13: Top 10 CY20 Negative Revisions — Canadian LPs and Diversified Names Lead the Downgrades

Chart 13: Top 10 CY20 Negative Revisions — Canadian LPs and Diversified Names Lead the Downgrades Source: Intro-Blue

Chart 13: Top 10 CY20 Negative Revisions — Canadian LPs and Diversified Names Lead the Downgrades. Source: Intro-Blue

 

SEGMENT ANALYSIS: MOVERS AND SHAKERS

CANADIAN LPs: TGOD AND HEXO DOMINATE 3Q19 MISSES AND CY20 DOWNGRADES

Chart 14: Canadian LPs Missed 3Q19 Expectations by 43.7%; CY20 Estimates Lowered 36.3%

Chart 14: Canadian LPs Missed 3Q19 Expectations by 43.7%; CY20 Estimates Lowered 36.3%

Chart 14: Canadian LPs Missed 3Q19 Expectations by 43.7%; CY20 Estimates Lowered 36.3%

 

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions Source: Intro-Blue

 

 

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 15: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

 

 

CBD/HEMP: SHARP MARKDOWN IN CWBHF’S ESTIMATES; CBDMD STAND OUT PERFORMER

Chart 16: CBD/Hemp Names Missed 3Q19 Expectations by 28.2%; CY20 Estimates Lowered 35.6%

Chart 16: CBD/Hemp Names Missed 3Q19 Expectations by 28.2%; CY20 Estimates Lowered 35.6%

Chart 16: CBD/Hemp Names Missed 3Q19 Expectations by 28.2%; CY20 Estimates Lowered 35.6%

Chart 16: CBD/Hemp Names Missed 3Q19 Expectations by 28.2%; CY20 Estimates Lowered 35.6%

Chart 16: CBD/Hemp Names Missed 3Q19 Expectations by 28.2%; CY20 Estimates Lowered 35.6%

 

 

Chart 17: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 17: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 17: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

 

Chart 17: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 17: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

 

CANNA SCIENCE: VGWCF’S CY20 ESTIMATES MARKED HIGHER; PLPRF THE BIG LOSER

Chart 18: Canna Science Names Missed 3Q19 Expectations by 29.9%; CY20 Estimates Lowered 11.0%

Chart 18: Canna Science Names Missed 3Q19 Expectations by 29.9%; CY20 Estimates Lowered 11.0%

Chart 18: Canna Science Names Missed 3Q19 Expectations by 29.9%; CY20 Estimates Lowered 11.0%

 

 

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

 

 

Chart 19: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 19: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 19: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 19: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 19: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

 

DIVERSIFIED: ACROSS-THE-BOARD WEAKNESS LED BY HRVOF, MJARF, AND GGBXF

Chart 20: Diversified Names Missed 3Q19 Expectations by 14.1%; CY20 Estimates Lowered 56.8%

Chart 20: Diversified Names Missed 3Q19 Expectations by 14.1%; CY20 Estimates Lowered 56.8%

Chart 20: Diversified Names Missed 3Q19 Expectations by 14.1%; CY20 Estimates Lowered 56.8%

Chart 20: Diversified Names Missed 3Q19 Expectations by 14.1%; CY20 Estimates Lowered 56.8%

Chart 20: Diversified Names Missed 3Q19 Expectations by 14.1%; CY20 Estimates Lowered 56.8%

 

 

Chart 21: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 21: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 21: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 21: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 21: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

DOWNSTREAM: MMNFF PRESSURING SEGMENT PERFORMANCE; LQSIF THE LONE UPGRADE

Chart 22: Downstream Names Missed 3Q19 Expectations by 20.3%; CY20 Estimates Lowered 13.1%

Chart 22: Downstream Names Missed 3Q19 Expectations by 20.3%; CY20 Estimates Lowered 13.1%

Chart 22: Downstream Names Missed 3Q19 Expectations by 20.3%; CY20 Estimates Lowered 13.1%

Chart 22: Downstream Names Missed 3Q19 Expectations by 20.3%; CY20 Estimates Lowered 13.1%

Chart 22: Downstream Names Missed 3Q19 Expectations by 20.3%; CY20 Estimates Lowered 13.1%

 

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

INPUT MATERIALS: SMG & GRWG LEAD SEGEMNT’s 3Q19 BEAT

Chart 24: Input Materials Names Beat 3Q19 Expectations by 9.9%; CY20 Estimates Raised 3.2%

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 23: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

Chart 25: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 25: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 25: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 25: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 25: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

 

MEDICAL CANNABIS: CARA STANDS OUT AMONG 3Q19 BEATS AND CY20 UPGRADES

Chart 26: Medical Cannabis Names Beat 3Q19 Expectations by 0.5%; CY20 Estimates Lowered 16.6%

Chart 26: Medical Cannabis Names Beat 3Q19 Expectations by 0.5%; CY20 Estimates Lowered 16.6%

Chart 26: Medical Cannabis Names Beat 3Q19 Expectations by 0.5%; CY20 Estimates Lowered 16.6%

Chart 26: Medical Cannabis Names Beat 3Q19 Expectations by 0.5%; CY20 Estimates Lowered 16.6%

Chart 26: Medical Cannabis Names Beat 3Q19 Expectations by 0.5%; CY20 Estimates Lowered 16.6%

 

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions Source: Intro-Blue

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 27: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

REAL ESTATE & INVESTORS: FSP & IIPR LED SEGMENT’S OUTPERFORMANCE

Chart 28: Real Estate & Investors Names Beat 3Q19 Expectations by 15.3%; CY20 Estimates Lowered 11.4%

Chart 28: Real Estate & Investors Names Beat 3Q19 Expectations by 15.3%; CY20 Estimates Lowered 11.4%

Chart 28: Real Estate & Investors Names Beat 3Q19 Expectations by 15.3%; CY20 Estimates Lowered 11.4%

Chart 28: Real Estate & Investors Names Beat 3Q19 Expectations by 15.3%; CY20 Estimates Lowered 11.4%

Chart 28: Real Estate & Investors Names Beat 3Q19 Expectations by 15.3%; CY20 Estimates Lowered 11.4%

 

Chart 29: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 29: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions Source: Intro-Blue

Chart 29: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 29: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 29: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

 

TECHNOLOGY & ANCILLARY: KSHB CONTNUES TO BE THE ANCILARY LEADER

Chart 30: Technology & Ancillary Names Missed 3Q19 Expectations by 24.4%; CY20 Estimates Lowered 8.2%

Chart 30: Technology & Ancillary Names Missed 3Q19 Expectations by 24.4%; CY20 Estimates Lowered 8.2%

Chart 30: Technology & Ancillary Names Missed 3Q19 Expectations by 24.4%; CY20 Estimates Lowered 8.2%

Chart 30: Technology & Ancillary Names Missed 3Q19 Expectations by 24.4%; CY20 Estimates Lowered 8.2%

Chart 30: Technology & Ancillary Names Missed 3Q19 Expectations by 24.4%; CY20 Estimates Lowered 8.2%

 

Chart 31: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 31: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions Source: Intro-Blue

Chart 31: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 31: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 31: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

 

U.S. MSO & SSO: TCNNF THE TRUE OUTPERFORMER WHILE ACRGF UNDERPERFORMS

Chart 32: U.S. MSO & SSO Names Missed 3Q19 Expectations by 16.2%; CY20 Estimates Lowered 10.9%

Chart 32: U.S. MSO & SSO Names Missed 3Q19 Expectations by 16.2%; CY20 Estimates Lowered 10.9%

Chart 32: U.S. MSO & SSO Names Missed 3Q19 Expectations by 16.2%; CY20 Estimates Lowered 10.9%

Chart 32: U.S. MSO & SSO Names Missed 3Q19 Expectations by 16.2%; CY20 Estimates Lowered 10.9%

Chart 32: U.S. MSO & SSO Names Missed 3Q19 Expectations by 16.2%; CY20 Estimates Lowered 10.9%

 

Chart 33: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions

Chart 33: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions Source: Intro-Blue

Chart 33: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 33: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

Chart 33: Key Names Driving 3Q19 Beats/Misses and CY20 Sales Revisions. Source: Intro-Blue

 

CANNA NEWS

STATE AND REGULATORY NEWS

BDS Analytics data reveals limited vaping crisis impact in October. During October, the second month after the onset of the vaping crisis, sales across the six markets totaled $618.9 million, up 0.4% from September. Sales growth from a year ago among the five Western markets ranged from 8% in California, the same as in the prior month, to as high as 29% in Arizona. Concentrates, which represented 22-32% of sales by market (compared to 23-33% in September and 26-38% in August), grew more slowly within each market than overall sales grew due to reduced sales of vape pens, which ranged from -12% in Oregon to +16% in Arizona and Colorado. Read more (New Cannabis Ventures, BDS Analytics)

Chart 34: California

Chart 34: California

Chart 34: California

Chart 34: California

Chart 34: California

Chart 35: Oregon

Chart 35: Oregon

Chart 35: Oregon

Chart 35: Oregon

Chart 35: Oregon

Chart 36: Arizona

Chart 36: Arizona

Chart 36: Arizona

Chart 36: Arizona

Chart 36: Arizona

 

Chart 37: Colorado

Chart 37: Colorado

Chart 37: Colorado

Chart 37: Colorado

Chart 37: Colorado

 

Chart 38: Nevada

Chart 38: Nevada

Chart 38: Nevada

Chart 38: Nevada

Chart 38: Nevada

 

Chart 39: Maryland

Chart 39: Maryland

Chart 39: Maryland

Chart 39: Maryland

Chart 39: Maryland

Source: Intro-Blue, New Cannabis Ventures, BDS Analytics

After ‘blood spilled’ in 2019, pot firms brace for 2020 repeat. As the cannabis industry comes off an annus horribilis, things are expected to get worse before they get better in 2020. The new year is likely to kick off with a wave of bankruptcies and consolidations as struggling pot companies run out of cash. But, for those that survive long enough, bipartisan support for U.S. legalization could jump-start a turnaround heading into the November election. Consolidation is also likely, but not necessarily to the benefit of the companies being acquired, said Troy Dayton, CEO of cannabis investment and research firm Arcview Group. “You’re going to have opportunities for distressed-asset deals,” Dayton said. “We’re going to start seeing a lot of roll-up strategies, collecting companies for pennies on the dollar.” Read More (BNN Bloomberg)

Recreational marijuana sales in Michigan exceed $1.6 million in first eight days. In the first eight days of legal weed sales, $1.6 million of recreational marijuana was sold at the five retail shops open around the state. And three of those shops either sold out or had limited supplies of cannabis products. The sales from Dec.1-8 totaled $1,629,007 and brought in $162,900 from the 10% state excise tax and $107,514 from the 6% state sales tax. Read More (Detroit Free Press)

Six reasons to be excited by Illinois cannabis legalization. In just few days, Illinois, with a population of 12.7 million, the sixth highest in the country, will permit sales of cannabis for adult-use. Legalization in Illinois is likely to be perceived as one of the most successful to date that will help drive the industry forward. This is due to the following factors: 1) It’s a big state with a big opportunity; 2) The infrastructure is in place; 3) Public companies are poised to benefit; 4) Nearby states may join in; 5) Success could help bypass the ballot box; and 6) The social equity aspect appears robust. Read More (New Cannabis Ventures)

Illinois approves two more marijuana cultivation centers. Illinois has approved two more marijuana cultivation centers ahead of the start of legal recreational sales next year. The two sites, located in Albion and Shelbyville, brings the total number of cultivation centers in the state to 16. Initially, only cultivation centers that have been licensed to grow medical marijuana can able to apply for recreational use. The other approved Illinois centers are located in cities including Aurora, Dwight, and Joliet. Read More (AP News)

New Jersey lawmakers considering referendum to legalize cannabis. New Jersey lawmakers scheduled hearings on a proposal to let voters decide in 2020 whether to legalize recreational marijuana. Democrat-led Assembly and Senate committees set hearings on the proposed referendum. Lawmakers failed in March to advance legislation legalizing recreational cannabis, despite support from Democratic leaders and Democratic Governor Phil Murphy, so they plan to seek support from voters. Read More (Marijuana Retail Report)

Cuomo signs New York hemp law; decision on extracts in food, beverages deferred. New York Governor Andrew Cuomo signed a bill into law that sets up a regulatory framework for the production and sale of hemp and hemp extracts in the state. According to a statement from the governor’s office, the new law also requires hemp businesses to test and properly label products to safeguard consumers. Cuomo also said the state plans to conduct a hemp summit in January with the goal of doing more work on hemp industry policies. Read More (Hemp Industry Daily)

Virginia jump-starts cannabis reform: No more ‘baby steps,’ lawmakers say. Virginia has long been one of the nation’s most conservative states on cannabis, having passed a very limited medical marijuana law in 2018. But with a new generation of state leaders taking over, Virginia could take action on badly needed cannabis reform in 2020. At the Virginia Cannabis Summit hosted by state Attorney General Mark Herring, lawmakers heard from state officials in Illinois and Colorado, legal experts, and law enforcement leadership, “to create a plan of action for badly needed reform of Virginia’s cannabis laws.” Read More (Leafly)

The retail cannabis market in Canada: A portrait of the first year. In the year following the legalization of non-medical cannabis in Canada, the retail non-medical cannabis market has grown considerably, with retailers of legal cannabis establishing more than 400 brick-and-mortar stores and registering $908 million in online and retail store sales. Ontario cannabis retailers led sales at the provincial level, contributing $217 million to the sector from October 2018 to September 2019, followed by Alberta ($196 million) and Quebec ($195 million). Read More (Stats Canada)

 

Chart 40: Retail Trade Sales by Cannabis Stores, October 2018 to September 2019, Select Geographies

Chart 40: Retail Trade Sales by Cannabis Stores, October 2018 to September 2019, Select Geographies Source: Intro-Blue, Stats Canada

Chart 40: Retail Trade Sales by Cannabis Stores, October 2018 to September 2019, Select Geographies
Source: Intro-Blue, Stats Canada

 

Ontario to dramatically expand cannabis retail market and remove cap on number of pot shops. The Ontario government has announced steps to allow more cannabis retail stores to open in January. Attorney General Doug Downey said that opening the cannabis market in Ontario as “responsibly” as possible has always been the government’s “number one priority.” In order to achieve these goals, the government said that it will eliminate the temporary cap on the number of private stores and cancel the pre-qualification requirements for prospective retailers. Read More (CTV News)

Alberta, with 22 percent of national sales, is the per capita leader in legal cannabis purchases. Statistics Canada figures show Albertans bought $196 million worth of cannabis from privately operated stores and a government-run website from October 2018 to September 2019. That represents 22 percent of national sales of $908 million in a province that makes up just 12 percent of Canada’s population. The only province with bigger dollar sales was Ontario with $217 million, but that came from a population more than three times that of Alberta. Read More (Calgary Herald, Statics Canada)

Health Canada reports preliminary September cannabis data. Total sales of dried cannabis in September decreased by 0.4% compared to August (from 12,972 kilograms to 12,922 kilograms) while the total sales of cannabis oil increased by 4.8% (from 10,671 litres to 11,187 litres). Total inventory of dried cannabis (finished and unfinished) held by cultivators, processors, distributors and retailers stood at 380,666 kilograms at the end of September – 29.5 times total sales in that month. Cannabis oil inventories totalled 164,771 litres – 14.7 times total sales. Read More (Health Canada)

 

Chart 41: Total Inventories and Sales – Dried Cannabis (Kilograms)

Chart 41: Total Inventories and Sales – Dried Cannabis (Kilograms)

Chart 41: Total Inventories and Sales – Dried Cannabis (Kilograms)

Chart 42: Total Inventories and Sales – Cannabis Oil (Liters)

Chart 42: Total Inventories and Sales – Cannabis Oil (Liters) Source: Intro-Blue, Health Canada

Chart 42: Total Inventories and Sales – Cannabis Oil (Liters). Source: Intro-Blue, Health Canada

 

Chart 43: Finished Inventories and Sales – Dried Cannabis (Kilograms)

Chart 43: Finished Inventories and Sales – Dried Cannabis (Kilograms)

Chart 43: Finished Inventories and Sales – Dried Cannabis (Kilograms)

Chart 44: Finished Inventories and Sales – Cannabis Oil (Liters)

Chart 44: Finished Inventories and Sales – Cannabis Oil (Liters) Source: Intro-Blue, Health Canada

Chart 44: Finished Inventories and Sales – Cannabis Oil (Liters). Source: Intro-Blue, Health Canada

 

BC, Ontario see lowest cannabis sales per capita in first year of legalization. The two most important cannabis markets in Canada experienced the worst sales of adult-use products per capita in the first year of legalization, reflecting struggles of officials in those provinces to get a handle on the policy tools at their disposal to regulate the industry. From October 2018 through September 2019, British Columbia’s marijuana stores sold 50 million Canadian dollars ($37 million) worth of cannabis, while Ontario recorded sales of CA$216 million. That represents just CA$10 and CA$15 per person, respectively. Read More (Marijuana Business Daily)

Alberta weighs legal changes for marijuana vape market. Findings from Alberta’s smoking law review could lead to legislative or regulatory changes involving cannabis vaping – though the analysis is not specifically aimed at cannabis. The review, which started in October, is being conducted because Alberta’s current legislation does not address vaping or “tobacco-like” products. It is expected to be completed by the end of the year so potential amendments can be considered in 2020. Read More (Marijuana Business Daily)

COMPANY NEWS

Canopy Growth introduces First & Free – a line of branded hemp-derived CBD products to the U.S. market. Canopy Growth (CGC) announced the launch of First & Free – a hemp-derived CBD product line offered in a variety of formats, including softgels, oil drops, and creams. The products will be available for purchase on the company’s first e-commerce site: www.firstandfree.com. Perfected through state-of-the-art technology and rigorous testing, First & Free products are created by extracting and isolating derivatives from the hemp plant to produce pure and consistent CBD formulations that are packaged in easy-to-use formats. Read More (Yahoo! Finance)

Organigram receives licensing for chocolate production and packaging area. Organigram Holdings (OGI) announced that the company has received Health Canada’s approval for the licensing of 16 additional cultivation rooms under the Cannabis Regulations. The expanded license was effective as of December 12, 2019. The new cultivation rooms represent approximately 13,000 kg/yr1 of increased target cultivation capacity. These are the remaining 16 rooms licensed within the Company’s Phase 4B expansion and now brings the Company’s Moncton campus licensed capacity to a target of 89,000 kg/yr. Read More (Business Wire)

Harvest Health & Recreation announces national roll out of award-winning products from Evolab. Harvest Health & Recreation (HRVSF) announced the availability of a series of advanced, high-quality vaporizers at Harvest stores and select retailers in Arizona, Colorado, and Maryland. The product line, from the award-winning brand Evolab, includes Chroma, Alchemy, and Delta 8, all of which utilize a distillation process resulting in an extract that is 100% cannabis-derived, free from cutting agents using instrument grade CO2 — considered a clean extraction method. Read More (PR Newswire)

Cresco Labs taps GreenAcreage REIT for $50 million with Illinois sale/leaseback transaction. Cresco Labs (CRLBF) announced the closing of an agreement to sell its Lincoln, Illinois cultivation facility to GreenAcreage Real Estate Corp. for $50 million. Concurrent with the closing of the sale, Cresco has agreed to enter into a long-term, triple-net lease agreement with GreenAcreage and will continue to operate the property as a licensed medical & recreational cannabis cultivation and processing facility. Read More (New Cannabis Ventures)

Tilray completes merger with Privateer Holdings. Tilray (TLRY) announced that its merger with Privateer Holdings closed on December 12, 2019. Pursuant to the merger, all of Privateer’s capital stock outstanding immediately prior to the effective time of the merger (excluding certain shares) were cancelled and automatically converted solely into the right to receive the applicable portion of an aggregate shares of Tilray Class 2 common stock and shares of Tilray Class 1 common stock (inclusive of shares of Tilray Class 2 common stock held in escrow for contingent release to Privateer’s stockholders) issuable as consideration in merger. Tilray did not pay any cash consideration in connection with the merger. Read More (Business Wire)

Tilray receives additional GMP certification at EU campus allowing for international export of finished medical cannabis products. Tilray (TLRY) said its wholly-owned subsidiary Tilray Portugal received its Good Manufacturing Practice (GMP) certification in accordance with European Union standards, for its manufacturing facility in Cantanhede, Portugal. This is the second GMP certification for Tilray Portugal, which allows the facility to manufacture and export GMP-certified finished medical cannabis products, including dried flower and oils, from Portugal to international markets with legal medical cannabis regulations. Read More (Business Wire)

Aurora details why it temporarily halted German medical cannabis sales. Cam Battley, Aurora’s (ACB) chief corporate officer, said that Aurora was forced to stop sales of medical marijuana in Germany over “a form of treatment that we use to maintain the product without microbial contamination.” A company spokesperson cited the need for additional authorization of a “proprietary step in our production process.” Read More (Marijuana Business Daily)

MedMen strengthens balance sheet, provides updated guidance, and enhances corporate governance. MedMen (MMNFF) announced several financial arrangements and corporate updates that will strengthen the company’s balance sheet and enhance overall corporate governance. Updates include: 1) the execution of financial agreements, which includes $37 million in financing; 2) an amendment to certain of the company’s outstanding debt; 3) an expansion of the company’s corporate SG&A initiatives through a new round of cost reductions; and 4) enhanced corporate governance with the company’s co-founder Andrew Modlin granting a limited proxy to Ben Rose, Executive Chairman of the Board. Read More (Medmen)

MedMen reveals another round of layoffs. MedMen (MMNFF) announced more layoffs last week. “This week, the company provided layoff notices to an additional 20% of its corporate-level employees,” MedMen said in a news release. “In total, over the past 30 days, the company has strategically reduced its corporate headcount by over 40%, representing approximately $20 million in annual salary-related savings.” Read More (Marijuana Business Daily)

Zenabis Global announces transition of Chief Executive Officer with appointment of Kevin Coft. Zenabis Global (ZBISF) announced the appointment of Kevin Coft as interim Chief Executive Officer (CEO), effective immediately. Mr. Coft will replace Andrew Grieve as CEO, whose contract was set to expire shortly. While Mr. Grieve will be returning to his investment business, he has agreed to continue to provide Zenabis with his knowledge, expertise and guidance as a continuing member of Zenabis’ board. Read More (PR Newswire)

Despite early freeze and $7 million in losses, Colorado marijuana grower Los Sueños still enjoys strong sales. Colorado-based Los Sueños Farms – the state’s largest cannabis grower – now estimates it lost about $7 million in an early October freeze, but the owner said the outdoor harvest was still better than last year, and the company will have ample material for the extraction market. The Colorado market was initially concerned when news of the freeze broke. Had Los Sueños lost its entire crop, the state’s supply chain would have been disrupted, with retailers and processors likely paying higher prices for flower and raw material for extraction. But those fears didn’t come to bear. Read More (Marijuana Business Daily)

VidaCann announces $25 million expansion of operations to include over 600,000 sq ft of cultivation space. VidaCann announced a $25 million expansion of operations that will include over 600,000 square feet of total cultivation space, making VidaCann one of the largest medical cannabis producers in Florida. The company currently has 200 employees and the expansion will add over 300 new jobs statewide. VidaCann’s expansion of its state-of-the-art cultivation space from 175,000 square feet to over 600,000 square feet is currently in progress, with expected completion by the end of 2021. This expansion will increase VidaCann’s footprint statewide and allow the company to ramp up production to meet patient demand. Read More (VidaCann)

EARNINGS

Hexo reports $62.4 million first-quarter loss. Hexo (HEXO) said it lost $62.4 million in its latest quarter compared with a loss of $12.8 million in the same quarter last year. The loss amounted to 24 cents per diluted share for the quarter ended Oct. 31, compared with a loss of seven cents per share a year ago when the company had fewer shares outstanding. Net revenue for what was the first quarter of the company’s financial year totaled $14.5 million, up from $5.7 million a year ago. Read More (BNN Bloomberg)

Valens announces revenue guidance for 4Q19. Valens GroWorks (VGWCF) expects revenues for fourth quarter to be in the range of $27 million to $30 million, nearly double what the cannabis extraction company made in its third quarter. The company also said its annual revenue should come in between $55 million to $58 million. It also stated it extracted over 24,400 kilograms of cannabis and hemp biomass in the fourth quarter of 2019, in line with the prior quarter. Lastly, Valens said it plans to buy back about five percent of its outstanding shares over the course of 2020 to help maximize shareholder value. Read More (Newswire)

CAPITAL MARKETS

You can now bet big on cannabis with first U.S. leveraged ETN. American investors can now turbocharge their cannabis bets with a new juiced-up exchange-traded note. The MicroSectors Cannabis 2x Leveraged ETN, which is due to begin trading Wednesday under the ticker MJO, is the first of its kind in the U.S. It will charge 95 basis points — or $9.50 for every $1,000 invested — according to regulatory documents. It’s a challenging time to invest in pot. While cash has continued to flow into the two largest marijuana ETFs this year, both have lost more than 30% of their value. The ETN is also entering a newly crowded market. A number of money managers have recently started weed funds, and at least six ETFs are currently duking it out for assets in the U.S. Read More (Bloomberg)

Chart 45: Pot Funds Have Suffered This Year, With Some Losing 50%

Chart 45: Pot Funds Have Suffered This Year, With Some Losing 50% Source: Intro-Blue, Bloomberg. Some funds launched at different parts of the year.

Chart 45: Pot Funds Have Suffered This Year, With Some Losing 50%
Source: Intro-Blue, Bloomberg. Some funds launched at different parts of the year.

 

The cannabis biz is down, but long term it’s smoking, analysts say, as marijuana industry gathers in Las Vegas. With the cannabis industry reeling from a series of setbacks over the last six months, the marijuana business conference began in Las Vegas on Monday with an investors’ meet-up marked by existential distress. “We are undergoing a recalibration in a very painful way” said Scott Greiper, president of Viridian Capital Advisors. “Markets are really depressed right now and we are looking for ways to come out of it.” Still, most experts who attended the cannabis business intelligence conference remained guardedly optimistic for the future of the industry and held out hope for a reversal of fortunes. Read More (Inquirer)

Pot stocks try to rebound from terrible 2019: ‘This is 2008 for the cannabis industry’. The legal marijuana industry is going through an epic shakeout. “This is 2008 for the cannabis industry,” said Kevin Murphy, chairman and CEO of Acreage Holdings. He also compares it to the dot-com bust. The question remains, which cannabis company will come out of the bust as marijuana’s Google, and which will disappear like Pets.com? “It has been an exciting year, and not in the way that shareholders in this sector would like,” said Cam Battley, chief corporate officer of Aurora Cannabis. “I think the launch in the state of Illinois is going to be a big market mover for the entire industry and that’s coming in January,” said Danny Moses of Moses Ventures. Read More (CNBC)

CIBC: ‘Indiscriminate’ cannabis selloff should start to shift in 2020. The cannabis stock meltdown that erased $49 billion in enterprise value this year should begin to shift in 2020 as the industry leaders separate themselves, one of Canada’s largest investment banks forecasts. A new CIBC World Markets report by John Zamparo, director of institutional equity research, called this year’s “rationalization” of marijuana stock prices inevitable. “Even the most bullish investor would struggle to justify CA$65 billion in enterprise value for an industry we expect to generate (less than) CA$1 billion of 2022E domestic EBITDA,” according to CIBC’s Equity Outlook report. Read More (Marijuana Business Daily)

NYSE warns CannTrust its listing in danger. CannTrust Holdings (CTST) said the New York Stock Exchange has notified the Canadian marijuana producer that its stock price had fallen below the $1-a-share threshold required to continue trading on the Big Board. The Vaughan, Ontario-based company said in a news release it has six months to regain compliance. In the meantime, CannTrust’s stock, which trades as CTST, will continue to list on the NYSE. Read More (Marijuana Business Daily)

FSD Pharma approved to list on NASDAQ. FSD Pharma (FSDDF) announced that the firm has finally received approval to list its series B common shares on the Nasdaq stock exchange. The announcement follows a long road to achieving the approval from the exchange, including a large reverse split of its equity and a shift in its business strategy. When FSD Pharma first announced its intent to list on a US big board exchange, the entire business plan was focused on being one of the largest cannabis growers in the world via their Cobourg, Ontario facility. Read More (the deep dive)

Cannabis VC firm Phyto Partners sees value in the industry’s ancillary companies. Phyto Partners, a venture capital firm focused solely on the cannabis industry, has invested in approximately 30 companies over the past four-and-a-half years. The firm’s portfolio touches nearly every vertical in the cannabis supply chain, but it largely focuses on the ancillary companies that support licensed operators. The majority of the company’s investments have been in the form of convertible notes or Series A rounds. Read More (New Cannabis Ventures)
The Green Organic Dutchman announces a $41.7 million senior secured credit facility. The Green Organic Dutchman (TGODF) announce that the company has entered into a binding term sheet with Maynbridge Capital for a senior secured first lien credit facility of up to $41.7 million. The facility will replace the proposed mortgage loan as well as the sale and leaseback of its Ancaster Energy Centre, which are no longer being pursued by the company at this time. Read More (Newswire)

MEDICAL CANNABIS

Lack of dispensaries doesn’t limit first six months of Arkansas medical marijuana sales. Arkansas posted impressive medical cannabis sales during the program’s first six months of operation, surpassing $21 million, even though only a third of approved dispensaries are open for business. Between the mid-May launch and Nov. 25, Arkansas dispensaries sold $21.4 million of medical marijuana, comprising 3,098 pounds of product and equating to about $3.3 million per month. Comparing the first six months of medical marijuana sales in Arkansas to other states, it outperformed Illinois ($2.2 million average monthly sales) and is on pace with Ohio ($3.6 million). Read More (Marijuana Business Daily)

Chart 46: Arkansas 2019 Medical Marijuana Sales and Patient Count

Chart 46: Arkansas 2019 Medical Marijuana Sales and Patient Count  Source: Intro-Blue, Marijuana Business Daily

Chart 46: Arkansas 2019 Medical Marijuana Sales and Patient Count
Source: Intro-Blue, Marijuana Business Daily

 

U.S. Senate confirms Hahn as new head of FDA. The U.S. Senate has confirmed a cancer specialist from Texas to lead the U.S. Food and Drug Administration (FDA). Dr. Stephen Hahn was confirmed Thursday. He replaces Dr. Scott Gottlieb. Hahn hasn’t said how he believes cannabis extracts such as CBD should be regulated, though he said at his confirmation hearing that he wants to see more research to answer “open and unanswered questions” about cannabinoids. The FDA’s current stance is that CBD is an active drug ingredient and can’t be added to foods and dietary supplements outside pharmaceutical channels. Read More (Hemp Industry Daily)

GOP shows support for legalizing medical cannabis in Wisconsin. For more than a decade, the Wisconsin Legislature has been where marijuana reform bills go to die. But a new bill to legalize some forms of medical marijuana, introduced by a pair of Republican lawmakers instead of the usual cohort of Democrats, may fare differently. At the very least, the new medical marijuana proposal may mean that the Wisconsin GOP’s brick-wall opposition to marijuana legalization is beginning to crack. Read More (High Times)

CBD/HEMP

Hemp sales could increase by more than $100 million by 2022, USDA predicts. U.S. hemp sales could increase as much as $25 million in 2020 and by more than $100 million by 2022, according to new estimates by the U.S. Department of Agriculture (USDA). The agency points to three drivers of growth for hemp sales:

  • The rate at which hemp acreage has increased in recent years.
  • The number of states whose hemp pilot programs produced a crop in recent years.
  • How many states have passed legislation following the signing of the 2018 Farm Bill.

Read More (Hemp Industry Daily)

 

Chart 47: Estimated Annual Increase in Hemp Producer Sales

Chart 47: Estimated Annual Increase in Hemp Producer Sales  Source: Intro-Blue, USDA, Hemp Industry Daily

Chart 47: Estimated Annual Increase in Hemp Producer Sales
Source: Intro-Blue, USDA, Hemp Industry Daily

 

Some fear new federal rules on hemp production may go too far. Chris Thorne, a board member of the Hemp Federation of America, a recently formed trade group, found fault with parts of the USDA rules. “They are trying to define hemp through the lens of marijuana. It’s all about continuing the prohibition on marijuana as a controlled substance as opposed to expanding the opportunity to grow and produce industrial hemp.” The basic regulatory approach stems from the 2014 farm bill, which included provisions backed by Kentucky Republican Mitch McConnell, now the Senate majority leader, that required that hemp farmers be licensed or certified and that crop samples be tested. Read More (Roll Call)

AB InBev will sell CBD-infused tea in Canada. The world’s biggest brewer will kick off its push into cannabis-infused beverages with a lineup of flavored teas — Lavender Chamomile, Vanilla Rooibos and Peach Ginger Green. The “Everie” teas will contain 98% pure cannabidiol, the non-psychotropic ingredient in cannabis, with only a trace — 0.05 milligrams — of THC, the component that gets you high. They will be sold through Fluent Beverages, a joint venture between Anheuser-Busch InBev NV’s Labatt Breweries of Canada and pot company Tilray Inc.’s High Park Co. Read More (Yahoo! Finance)

20% of hemp lots will exceed 0.3% THC limit next year, USDA estimates. In 2020, one in five lots of hemp will need to be destroyed because the plants exceed the legal THC limit, according to new estimates from the U.S. Department of Agriculture (USDA). The USDA estimates that 20% of hemp lots sent in for testing will test “hot,” or above the legal threshold of 0.3% THC content. The USDA concedes that it isn’t possible to know in advance how much hemp will fail to meet the legal THC threshold. But the agency said it arrived at this estimate “based on information discussions with states that have a hemp program under the 2014 Farm Bill.” Read More (Hemp Industry Daily)

Chart 48: Estimate Annual Proportion of Hemp Lots Testing “Hot”

Chart 48: Estimate Annual Proportion of Hemp Lots Testing “Hot”  Source: Intro-Blue, USDA, Hemp Industry Daily

Chart 48: Estimate Annual Proportion of Hemp Lots Testing “Hot”
Source: Intro-Blue, USDA, Hemp Industry Daily

 

PRODUCTS

Sales of cannabis edibles get off to a slow start. If you want pot edibles in Canada, you’re going to have to go a long way east. Monday marked the first day Canadians could legally buy a range of new cannabis formats including vapes, edibles and beverages. Newfoundland and Labrador, on Canada’s easternmost edge, was one of the only provinces that appeared to have some of those products available for sale. CannabisNL, the province’s government-owned wholesaler, had chocolate squares and gummies from Auxly Cannabis Group Inc. brands Kolab and Foray available for sale on Monday morning. Many other choices were listed as “coming soon.” Read More (BNN Bloomberg)

Pot firms expected to ‘start low and go slow’ with 2.0 products. If you’re expecting a plethora of new cannabis-infused products to hit the Canadian legal market next week, prepare to be disappointed. It looks like most cannabis producers will be making their first foray into the cannabis-infused market with only a handful of products before rolling out their full portfolio over the next year. Some companies are choosing to hold off on selling Cannabis 2.0 products next week, pausing their plans to ensure they meet safety and quality standards. Read More (BNN Bloomberg)

How much money is Canada missing out on from the lagged edibles rollout? It’s becoming clear cannabis edibles, extracts, and topicals probably won’t be a part of holiday shopping this year as provincial regulators can only order products as of December 16. While storeowners were hoping to bank off the bud and customers were hoping to get high this season, the anticipation for new products will have to spill into January 2020. A total of 6.7 million Canadians may have looked to buy edibles, extracts, and topicals for the holiday season. Read More (The GrowthOp)

Evo Hemp announces new line of hemp-infused herbal teas with beverage maker Mood33. Evo Hemp, a leading hemp food and beverage company based in Boulder, Colorado, announced a new line of hemp-infused herbal teas with beverage maker Mood33. These new teas are infused with Evo Hemp’s organic, U.S.-grown hemp extract and made with premium botanicals and real fruit juices. They will be available in the beginning of 2020 at retail outlets nationwide. Read More (Extraction Magazine)

CONSUMER AND SOCIAL TRENDS

Jerry Jones, Tom Brady expect NFL marijuana policy change following MLB action. A top National Football League (NFL) team owner and a star player said this week that they’re expecting changes to the league’s marijuana policy after the MLB announced it is removing cannabis from the banned substances list for baseball players. Both Jerry Jones, owner of the Dallas Cowboys, and New England Patriots quarterback Tom Brady touched on the possibility of the NFL’s marijuana rules being revisited. Read More (Marijuana Moment)
Study: The number of people who abuse weed is decreasing. Legalization may be responsible. Contrary to the expectations of public health experts, the rate of frequent marijuana consumers who are diagnosed with cannabis use disorder (CUD) is not increasing, a new study reports. In fact, it’s actually decreasing, and that may be due to the growing number of states that have legalized access to marijuana. Read More (Green Entrepreneur)

RETAIL

CalEthos unveils immersive showcase retail concept for cannabis brands. Michael Campbell spent 20 years in tech and 20 years in finance, bringing companies public and learning how to read market trends. The CEO of CalEthos says that many of those trends can be universal; what works in one industry tends to work in another. In retail, this is often the case. “Cannabis obviously is the next emerging market on the board, if you will,” he says. “Probably four-plus years ago, the deal flow that came across my desk started to be cannabis maybe once a month, then once a week, once a day, multiple times a day, right? Everyone and their brother was looking for capital to do something in cannabis, so that piqued our interest.” Read More (Cannabis Business Times)

Sweet Flower aims to destigmatize cannabis shopping. It’s no secret that cannabis has a long and colorful association with all sorts of artists, from Shakespeare to Snoop Dogg. Which is why it seems only natural that cannabis companies are finding their way into the LA Arts District. The latest to plant a flag downtown is Sweet Flower, whose newest dispensary opened November 21st — and it may not be the biggest or the splashiest, but it’s certainly one of the nicest. Read More (Green Entrepreneur)

INTERNATIONAL

Peru issues key cannabis regulations, effectively launching nation’s medical marijuana program. Peruvian authorities have published long-awaited guidelines governing the nation’s medical marijuana program, allowing companies to start applying for different types of business licenses spelled out under a 2017 law. The new regulations mark the effective launch of Peru’s medical cannabis industry and create business opportunities for companies to produce medicine domestically and import products from overseas. Government officials also announced that Peru’s first imported medical cannabis product has become available to patients. Read More (Marijuana Business Daily)

Zambia legalizes Marijuana growth for exports and for medical purposes only. The Zambian government has finally approved a proposal to legalize the production of Marijuana. The production of Marijuana in Zambia will, however, be restricted to exports and for medical purposes only. Companies wishing to trade in Marijuana in Zambia will be charged US$250,000 annual license fees. Only successful bidders will be issued with commercial licenses to grow and trade in Marijuana for exports. The licenses will be issued by the Ministry of Health while the growth of the crop will be strictly supervised by the Zambia National Service. Read More (Lusaka Times)

Denmark eyes medical marijuana trial extension. Denmark might need to extend its medical cannabis trial plans in order for the government to conduct a mandated midterm evaluation of the pilot program, Health Minister Magnus Heunicke said. The four-year program launched in 2018, and a formal evaluation is required to take place in 2020. The number of patients who accessed medical cannabis via the scheme saw virtually no growth in recent quarters because of a combination of pricey imports and supply issues. Read More (Marijuana Business Daily)

Thailand joins ‘1-percent club’ in setting THC limits for hemp. Thailand has joined leading global nations by setting the level of THC allowable in hemp to a full 1.0% by dry weight, according to a recent announcement from the country’s Narcotics Control Committee (NCC). The announcement clarifies earlier confusion over the allowable THC level, revoking and replacing previously considered rules which had variably been reported as setting the THC limit for hemp at maximim 0.1%, 0.2% or 0.3% by weight of the dried plant, including flowers and leaves. The move greatly affects the potential in Thailand’s CBD sector.. Read More (Hemp Today)

CANNA SCIENCE – EXTRACTION, TESTING, BIOSYNTHESIS

Valens expands exclusive license agreement to bring cannabis-infusion technology to new international markets. Valens expands exclusive license for SōRSE cannabis emulsion technology to include Europe, Australia, and Mexico in addition to Canada. The amendment represents a nearly 20x increase in the addressable population exclusively available to Valens and its customers. It also provides a framework for Valens to obtain rights to utilize the technology in the U.S. and other markets on a non-exclusive basis in the future, creating the potential for Valens customers to sell branded cannabis infused products globally. Read More (Newswire)

How nanoemulsions create new cannabis building blocks. Thanks to nanotechnology, cannabis can fit into any consumable product, whether it’s a soda, a gummy or a lotion. Axiomm Technologies is evolving the realm of consumable possibility with a precursor called µGOO — a micro goo that facilitates the easy creation of nano products. By allowing any cannabis concentrate to be mixed into water, it lets brands expand their product range, improve their products’ performance and, in turn, grow their customer base. Read More (Leafly)

TECHNOLOGY

WAYV & Hypur launch first digital, compliant payments and ordering solution for cannabis supply chain. WAYV and Hypur announced the launch of the first digital, compliant payments and ordering solution for the entire cannabis supply chain. The first-of-its-kind solution offers businesses new predictability, safety, and transparency with a “credit card like” transaction and next-day wire and ACH payments to reduce reliance on cash and move money digitally throughout the supply chain — the fastest and most reliable way. The new solution and partnership provides fast, digital, and reliable payments from retailers to brands. Brands can now offer a line of credit to retailers that WAYV will auto debit on the due date, ensuring prompt and predictable payments. Brands will now be able to receive digital payments from distributors – the fastest and most efficient way to get paid. Brands and retailers will enjoy zero payment fees for a limited time. Read More (PR Newswire)

AI monitoring system aims to optimize hemp crops. A Polish start-up has developed the first application in a suite of artificial intelligence (AI) tools dedicated to crop monitoring, yield optimization and management of outdoor hemp fields. “We’ll be able to accurately predict when flowers will be perfect for a harvest. That’s important not only because cannabinoids content can drop more than 35% if collected too late, but it’s also critical from a logistics point of view,” said Marcin Marczak, CEO at the developer, Green Cube Solutions. “With the limitations on available equipment, good planning is the key to a successful harvest.” Read More (Hemp Today)

How to leverage machine learning to fill IoT security gaps. Technology is helping the cannabis and hemp industries evolve. From cultivation monitoring systems to comprehensive seed to sale solutions and retail automation, the internet of things is changing the landscape. Since the IoT ecosystem always works as a loosely dependent and connected set of devices spread across an environment, without proper security protocol in place, they always remain vulnerable to attacks and threats. This is where sophisticated technologies like Machine Learning can really a massive proactive role. Read More (Cannabis Tech)

IP

Inside the billion-dollar race to patent cannabis. Today’s legal cannabis market is worth an estimated $11 billion. That could easily double within the next few years. Imagine holding a patent that required every grower of a popular strain to pay the patent holder a licensing fee. Biotech startups and Big Ag corporations aren’t imagining—they’re planning. With federal legalization looming, some are already filing patent claims on cannabis strains. The bigger players are waiting in the wings, ready to purchase those patents and claim ownership of hugely valuable DNA. Read More (Leafly)

Chart 49: The USPTO Uses This Four-Part Test to Evaluate Patent Applications

Chart 49: The USPTO Uses This Four-Part Test to Evaluate Patent Applications  Source: Intro-Blue, Leafly

Chart 49: The USPTO Uses This Four-Part Test to Evaluate Patent Applications
Source: Intro-Blue, Leafly

Cannabis farmers scramble to protect heirloom seeds from Big Ag. Dan Pomerantz, founder and CEO of California-based Rebel Grown—which cultivates outdoor sustainable cannabis and seeds—urged the Meadowlands round table to recognize that the real threat facing cannabis is coming directly from the so-called Big Four agricultural and seed corporations (Bayer-Monsanto, DowDuPont, ChemChina-Syngenta, and BASF): “All of the biggest agricultural companies in the world want our genetics. Those people aren’t coming into our industry now, they’ve been doing it for a decade, and they’ve been doing it pretty much under the radar. So who’s paying for this forward-thinking technology to be applied to cannabis genetics?” Read More (Leafly)

LEGAL

Lawsuit targets Trulieve over text messages. In a federal lawsuit seeking millions of dollars in damages, a Tennessee man is accusing Florida’s largest medical marijuana operator of illegally sending text messages to his cellphone. The lawsuit alleges that Quincy-based Trulieve violated federal communications laws by sending unsolicited text messages to Mats Jaslow that advertised special deals on marijuana products in October and November. Read More (Law.com)

Two lawsuits between Canopy, US hemp grower dropped. The legal battle between the U.S. arm of Canadian cannabis giant Canopy Growth and a Nevada-based hemp producer appears to be over. Canopy filed notice that it is dropping its lawsuit accusing Go Farm Hemp of squandering a $12 million advance to grow hemp. Canopy’s filing to dismiss came a month after Go Farm Hemp’s initial lawsuit against the Ontario, Canada-based company for allegedly failing to pay some advance money was dismissed by a New York court. Read More (Hemp Industry Daily)

SUSTAINABILITY

“Trespass grows,” which feed the marijuana black market, do great damage to the planet. Trespass grows are not just an eyesore and a misuse of public lands. Growers on the sites use powerful illegal pesticides. That makes the grows a severe threat to the forest ecosystem, from the microbes in the dirt all the way up to apex predators like eagles. They are an object lesson in the invisible harms of the black market—and in the invisible harms of cannabis prohibition. Read More (The Atlantic)

Cutting edge green building, hempcrete masonry just got better. JustBioFiber, a Canadian Company in Calgary, has made headlines in the building industry by overcoming one of hempcrete’s main disadvantages: its structural integrity. Hempcrete, a building material created by combining the robust fibrous core from hemp with lime and water, is experiencing a bit of a heyday. It’s eco-friendly, relatively affordable, and it has many thermal benefits for interior and exterior applications. It’s one of the most sustainable building materials available today. With the launch of their new Just BioFiber Block, they have created an eco-friendly building medium that can finally compete with conventional building materials. Read More (Cannabis Tech)

CANNA FACTS

Chart 50: Global Hemp Cultivation Leaders

Chart 50: Global Hemp Cultivation Leaders  Source: Intro-Blue, New Frontier Data

Chart 50: Global Hemp Cultivation Leaders
Source: Intro-Blue, New Frontier Data

 

CANNA CAPITAL MARKET TRENDS

Chart 51: Weekly Summary (Week 49 ending December 6, 2019)

Chart 50: Global Hemp Cultivation Leaders  Source: Intro-Blue, New Frontier Data Chart 50: Global Hemp Cultivation Leaders  Source: Intro-Blue, New Frontier Data

Chart 50: Global Hemp Cultivation Leaders  Source: Intro-Blue, New Frontier Data

Chart 51: Weekly Summary (Week 49 ending December 6, 2019)

Chart 52: Cannabis Capital Raises by Week

Chart 52: Cannabis Capital Raises by Week

Chart 52: Cannabis Capital Raises by Week

Chart 53: Cannabis M&A Activity by Week

Chart 53: Cannabis M&A Activity by Week

Chart 53: Cannabis M&A Activity by Week

 

CANNA PRICES – WEEKLY TREND

Chart 54: U.S. Cannabis Market Prices

Chart 54: U.S. Cannabis Market Prices  Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 54: U.S. Cannabis Market Prices
Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 54: U.S. Cannabis Market Prices  Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 54: U.S. Cannabis Market Prices
Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 55: U.S. Implied Forward Prices (Week Ending December 13, 2019)

Chart 55: U.S. Implied Forward Prices (Week Ending December 13, 2019)  Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 55: U.S. Implied Forward Prices (Week Ending December 13, 2019)
Source: Intro-Blue, Cannabis Benchmarks Price Index

 

Chart 56: Canada Cannabis Spot Index

Chart 56: Canada Cannabis Spot Index  Source: Intro-Blue, Cannabis Benchmarks Price Index

Chart 56: Canada Cannabis Spot Index
Source: Intro-Blue, Cannabis Benchmarks Price Index

 

CANNA BRANDS AND PRODUCTS RANKING – STATE IN FOCUS: NEVADA

Chart 57: Best-Selling Flower Brands and Products in Nevada

Chart 57: Best-Selling Flower Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 57: Best-Selling Flower Brands and Products in Nevada
Source: Intro-Blue, Headset

 

Chart 58: Best-Selling Concentrates Brands and Products in Nevada

Chart 58: Best-Selling Concentrates Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 58: Best-Selling Concentrates Brands and Products in Nevada
Source: Intro-Blue, Headset

 

Chart 59: Best-Selling Vapor Pens Brands and Products in Nevada

Chart 59: Best-Selling Vapor Pens Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 59: Best-Selling Vapor Pens Brands and Products in Nevada
Source: Intro-Blue, Headset

 

Chart 60: Best-Selling Beverage Brands and Products in Nevada

Chart 60: Best-Selling Beverage Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 60: Best-Selling Beverage Brands and Products in Nevada
Source: Intro-Blue, Headset

 

Chart 61: Best-Selling Tincture & Sublingual Brands and Products in Nevada

Chart 61: Best-Selling Tincture & Sublingual Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 61: Best-Selling Tincture & Sublingual Brands and Products in Nevada
Source: Intro-Blue, Headset

 

Chart 62: Best-Selling Capsules Brands and Products in Nevada

Chart 62: Best-Selling Capsules Brands and Products in Nevada  Source: Intro-Blue, Headset

Chart 62: Best-Selling Capsules Brands and Products in Nevada
Source: Intro-Blue, Headset

 

 

 

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