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Welcome to Insider Cannabis, our weekly newsletter where we’re bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom.
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We’re back!
Hope everyone had a restful holiday.
It was disturbing to watch pro-Trump rioters storm the US Capitol this week, but we'll leave coverage of Wednesday's shameful display to our colleagues in DC.
We're back to our regularly scheduled programming here on Business Insider's cannabis industry team. Instead of our usual weekly roundup, last week we put together a list of our best stories from 2020. If you missed it, you can find them here.
In December, signs pointed to a rebound for the cannabis industry after a tough 2020. The blockbuster, $4 billion Tilray-Aphria merger seems to have taken the lid off of M&A and the rest of the industry quickly followed suit, with both US and Canadian cannabis companies jockeying for market share - and bankers and investors are again looking to make some money.
The industry got another boost this week after Democrats won a pair of victories in Georgia, tilting the balance of the Senate and boosting the prospects for federal cannabis reform. Cannabis stocks took off, and some traders told me that it was an "epic" day for the sector.
We've got lots of exciting stories on deck for this year, but we also want to hear directly from you about what you're watching, deals you're working on, and what we're missing and should be covering.
-Jeremy (@jfberke) and Yeji (@jesse_yeji)
As a reminder, here's how to get in touch: [email protected], or [email protected]. Signal number for encrypted messages upon request.
Here's what we wrote about this week:
Democrats' victories in Georgia will pave the way for federal cannabis reform and spur major investors to jump into the booming industry
Wall Street analysts say Democrats' pair of victories in Georgia will boost the prospects for federal marijuana reform as the party will narrowly control Congress, as well as the White House.
Analysts from Cowen said the most likely course is the passage of legislation that would protect states that choose to legalize marijuana but stop short of federal legalization.
The 5 top cannabis startups that VCs can't stop talking about
We asked 17 top cannabis VCs to name startups in the industry that they think are poised for major growth in 2021. Each investor was asked to recommend one startup they invested in and one they hadn't. In total, investors gave us 27 names - here are the five that came up most often.
See the 20-slide pitch deck a psychedelics startup used to raise funds to build out a network of ketamine clinics
Psychedelics company Novamind recently announced that it raised 10 million Canadian dollars in a private placement. The company is preparing to go public on the Canadian Securities Exchange (CSE) this month. Here's a look at the pitch deck they used to raise money and build out a network of ketamine clinics in the US.
Democrats' big victory in Georgia is the best possible outcome for the cannabis industry. Here's the ultimate guide to marijuana legalization: the key dates to know, and which stocks could benefit the most.
We've updated our ultimate guide to cannabis legislation after both Democratic Senate candidates in Georgia won their special runoff elections, sequentially cinching a Democratic majority in Congress. Here's a look at what this means for the cannabis industry.
A top Wall Street analyst says New York has a 'very good chance' of legalizing cannabis and lays out the companies that are poised to profit
Though New York has tried - and failed - to legalize cannabis twice already, Cowen analyst Vivien Azer wrote in a January 6 note that the state has a "very good chance" at succeeding in its efforts this year. If this happens, Azer writes that the companies best positioned to benefit from New York turning recreational are the ones that are currently operating in the state, according to Azer, like Green Thumb Industries, Curaleaf, and Cresco Labs.
Executive Moves
- Harborside announced on Monday that co-founder Steve DeAngelo would be leaving the company.
- Terry Booth, the former CEO of Aurora Cannabis, is joining Australis Capital as CEO.
- Indus Holdings announced on Tuesday that Kevin Lawrence would be joining the company as chief revenue officer.
- MedMen appoints Reece Fulgham as interim CFO. The company said Zeeshan Hyder will be stepping down in January.
- Rapper TI is joining Viola Brands as the company's social justice and reform advisor.
Deals, launches, and IPOs
- Cannabis company AYR Strategies is expanding to New Jersey and Florida via a $290 million all-stock acquisition of the CSE-listed Liberty Health Sciences.
- Curaleaf raised $275 million (CAD) in a share sale, in anticipation of what chairman Boris Jordan called "newly enhanced opportunities in the sector."
- Columbia Care will acquire Green Leaf Medical in a $240 million cash and stock deal.
- HempFusion Wellness began trading on the TSX in an IPO that raised $17 million on Monday.
- Vancouver-based psychedelics company NeonMind began trading on the CSE on Monday.
- Canopy Growth is splitting from its publicly-traded VC arm, Canopy Rivers. As part of the split, Canopy Rivers will monetize $297 million in assets, and Canopy Growth will increase its stake in TerrAscend and Vert Mirabel.
- Cannabis industry VC fund Casa Verde capital closed a new $100 million fund in December.
Policy moves
- New York Gov. Andrew Cuomo announced that the state would - once again - try to legalize adult-use cannabis. Read about his announcement here.
- Illinois Gov. J.B. Pritzker announced right before the new year that the state had expunged nearly half a million cannabis-related arrest records since legalizing adult-use cannabis in 2019.
- New Jersey, which voted to legalize recreational cannabis in November, went into cannabis limbo on January 1 when the state's constitutional amendment would have taken effect. Murphy held off signing cannabis legislation passed by state lawmakers because he wanted a change in the bill to fine underaged individuals found with the drug. The new bill is set for a vote on Monday.
- A lawmaker in Virginia introduced a bill to legalize marijuana in the state after Gov. Ralph Northam laid the groundwork for legalization in the state's budget and indicated he would support the legislation.
- Both of Georgia's Democratic Senators won their runoff special elections earlier this week, securing a Democratic majority in Congress and boosting the chances for federal cannabis reform.
- Canopy Growth is suing GW Pharma, the maker of the CBD-based epilepsy drug Epidiolex, over patent infringement.
Chart of the week
The US has become the epicenter for big mergers in the cannabis industry over the past two years, according to data from Viridian Capital Advisors. In the second half of 2020, cannabis companies in the US accounted for over 90% of M&A worldwide:
Shayanne Gal/BI Graphics
What we're reading
Big pharma is about to tune in to the potential of psychedelics (Wired)
Gov. Andrew Cuomo announced his intent to legalize marijuana in New York (Business Insider)
Mexico set to become world's largest legal cannabis market (Wall Street Journal)
A New Yorker's guide to cannabis legalization in New Jersey (Curbed)
Arizona cities are banning recreational marijuana, but the fix is already in (Phoenix New Times)
Fields of Green (Searchlight New Mexico)