Amir Cohen/Reuters
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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Hello everyone,
Breathe out. If you work for, invest in, or lead a cannabis company – this was probably one of the busiest weeks of the summer.
Most of the major US cannabis companies or MSOs reported earnings this week, giving us a clear snapshot into how the industry's doing amid the pandemic.
For us, that means a whirlwind of calls, interviews, reading, writing, more calls, more interviews, more reading, and more writing. If you tried to reach Yeji or me this week and we haven't gotten back you, now you know why. We're doing our best.
Our quick takeaway on the quarter: MSOs like Trulieve, Green Thumb Industries, Verano Holdings and others posted strong quarters in terms of revenue growth and actually turning a profit, compared to their Canadian counterparts. How novel.
What else we're watching:
Gov. Cuomo's resigning, and industry experts told us that'll speed up the rollout of legalization in New York.
Trulieve CEO Kim Rivers' husband JT Burnette is on trial over corruption charges associated with real estate purchases he made. The jury is deliberating as we speak.
But for the cannabis industry, there's a damning piece: According to audio from a conversation between Burnette and an undercover FBI agent, Burnette claimed he worked with a Republican state representative to create barriers that would benefit his wife's company and keep others out of Florida's lucrative medical marijuana market, the Tallahassee Democrat reported.
In an industry like cannabis, in the context of decades of racially motivated policing and incarceration, reputation is everything for leaders of publicly traded cannabis companies that are now profiting from legalization.
We're asking CEOs and other execs how they thread that needle in an industry where corporate reputation is of critical importance because of that history and the polarized political environment we all inhabit.
If you've got thoughts on that, get in touch with us.
- Jeremy Berke (@jfberke) & Yeji Jesse Lee (@jesse_yeji)
If you like what you read, share this newsletter with your colleagues, friends, boss, spouse, strangers on the internet, or whomever else would like a weekly dose of cannabis news.
Here's what we wrote about this week:
A top Wall Street analyst says investors are overlooking a 'transformative growth opportunity' in cannabis stocks, and names 9 to buy now
Cannabis stocks have pulled back significantly since February and Viridian analyst Jonathan DeCourcey says this creates an opportunity for investors. DeCourcey names 9 stocks in particular that are poised to see "transformative growth."
Robinhood just announced a $140 million deal for a startup focused on increasing proxy voting as meme stocks struggle to get participation from retail investors
Companies with large retail-investor bases face difficulties reaching a quorum in shareholder votes. "It's hard to get those shareholders to show up and vote," Tilray CEO Irwin Simon told Insider. To address this issue, Robinhood said on Tuesday that it had made a big deal that would help increase proxy voting.
The cannabis industry says Cuomo's resignation could speed up marijuana sales in New York
New York Gov. Andrew Cuomo's resignation amid a wave of sexual assault allegations may be beneficial for the state's fledgling cannabis industry.
"I think a lot of people in this industry, including some of our clients, are breathing a sigh of relief knowing that the governor of New York is no longer using cannabis as a pawn in unrelated battles," Jeffrey Schultz, partner at cannabis law firm Feuerstein Kulick, told Insider.
THE NEW GREEN RUSH: Risk-taking real-estate brokers who cater to cannabis companies are cashing in
Cannabis real estate is projected to be a $50 billion industry by 2027 and some risk-taking brokerages are cashing in, helping cannabis firms find grow houses and retail storefronts.
The man building a new cannabis company with cash from Scotts Miracle-Gro lays out his plan to dominate the US with a $320 million war chest
A Scotts Miracle-Gro unit is investing $150 million in RIV Capital and RIV Capital CEO Narbe Alexandrian told Insider he's using the money to shop for US cannabis deals. He says he's focused on populous states and said he's looking for distressed deals and for companies with strong teams.
Executive moves
- Tom Price, the former HHS secretary under President Donald Trump, is joining the board of Botanical Sciences, a cannabis company that recently won a coveted medical license in Georgia, Marijuana Moment reports.
Deals, launches, and IPOs
- Leafly said on Monday that it plans to go public through a special purpose acquisition company sponsored by Merida Capital Holdings in a deal that values the company at around $532 million. The company plans to trade on the NASDAQ under the ticker "LFLY."
- RIV Capital announced on Tuesday that it has received a $150 million investment from The Hawthorne Collective, a subsidiary of The Scotts Miracle-Gro Company. RIV Capital CEO Narbe Alexandrian told Insider he's using the money to shop for US cannabis deals.
- Montréal Cannabis Médical Inc. is going public on the CSE through a reverse takeover with Canada House.
- Canadian cannabis company Fire & Flower is entering the US through a licensing agreement with American Acres Managers, which will change its name to Fire & Flower U.S. Holdings and open a branded dispensary in Palm Springs.
- Psychedelics giant Atai announced on Thursday that it had launched Revixia Life Sciences, a subsidiary focused on developing Salvinorin A, a compound derived from the psychedelics plant Salvia divinorum.
- Origin Therapeutics said on Thursday that it closed a $6.5 million private placement to fund investments into private, early-stage psychedelics companies.
- BuzzFeed is launching a line of cannabis products, Forbes reports.
Amir Cohen/ Reuters
Policy moves
- Gov. Andrew Cuomo has announced his resignation from office, leaving New York - and the rollout of New York's cannabis industry - to Lt. Gov Kathy Hochul. We've got you covered on why experts say this might be beneficial for cannabis.
- As part of the mammoth $1 trillion infrastructure bill that passed the Senate this week, researchers would be allowed to study marijuana that consumers purchase from recreational dispensaries. The bill is now in the House.
Earnings
- Curaleaf released its 2021 Q2 results on Monday, reporting $312 million in revenue and a net loss of $7.2 million.
- Verano Holdings released its 2021 Q2 results on Tuesday, reporting $198.7 million in revenue and a net profit of $6.8 million.
- Acreage Holdings released its Q2 2021 results on Tuesday, reporting $44.2 million in revenue and a net loss of $2.6 million.
- Harvest Health & Recreation released its Q2 2021 results on Tuesday, reporting $102.5 million in revenue and a net loss of $19.5 million.
- Ascend Wellness Holdings released its Q2 2021 results on Tuesday, reporting $83.4 million in revenue and a net loss of $44.9 million.
- Green Thumb Industries released its Q2 2021 results on Wednesday, reporting $221.9 million in revenue and a net profit of $22.1 million.
- Columbia Care released its Q2 2021 results on Thursday, reporting $102.4 million in revenue and a net loss of $10.2 million.
- Trulieve released its Q2 2021 results on Thursday, reporting $215.1 million in revenue and a net profit of $40.9 million.
- Charlotte's Web released its Q2 2021 results on Thursday, reporting $24.2 million in revenue and a net loss of $5.4 million.
- Hydrofarm Holdings released its Q2 2021 results on Thursday, reporting $133.8 million in sales and a net income of $2.3 million.
- Cresco Labs released its Q2 2021 results on Friday, reporting $210 million in revenue and a net income of $2.7 million.
What we're reading
An inconvenient truth (about weed) (Politico)
Legal U.S. marijuana is pouring into Mexico. It's pricey, popular and has names such as 'Bubba Kush.' (The Washington Post)
Beyoncé Is Building a Hemp and a Honey Farm (Vanity Fair)
What Do You Do with a Billion Grams of Surplus Weed? (The Walrus)
Opinion: Punishing drug use heightens the stigma of addiction (Stat News)
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