Tilray’s war chest

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Hello everyone,

Here on the home front, reports that Gov. Andrew Cuomo is slow-walking legalization – he has yet to make nominations for the Office of Cannabis Management – have raised eyebrows across the New York cannabis world.

The New York Post reported that the delay was because of Cuomo's anger over the legislature's lack of action on his proposed MTA legislation. Sen. Dianne Savino, who co-led the push for cannabis reform, said that she expects Cuomo to be able to "walk and roll a joint at the same time."

Speaking from experience, that's much harder than it looks.

What else happened?

Yeji has a pair of stories in her series on what's in store for the burgeoning psychedelics market. You should read those if you want to get quickly up to speed.

I published a deep dive into the promises and pitfalls of synthetic cannabinoids and the surprising amount of money being poured into research by startups. It's expected to become a $115 billion market.

Tilray CEO Irwin Simon - fresh off a profitable quarter - told us in an interview that he's got ambitious M&A plans for the US.

- Jeremy Berke (@jfberke)

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Here's what we wrote about this week:

Top psychedelics VCs predict a tech boom and a rise of clinics over the next year

Some of the top VCs in the psychedelics space told Insider that they predict a rise in psychedelic clinics and more companies focused on other areas that don't involve drug development.

Biotechs are betting millions on unlocking the $115 billion synthetic-cannabis market

Growing quality cannabis isn't easy. Biotech startups are chasing what Wall Street analysts say could become a $115 billion market for synthetic cannabis compounds. "It's a biosynthesis revolution," one cannabis biotech executive told Insider. "Biology is to the 21st century what physics was to the 20th."

The CEO of cannabis giant Tilray is sitting on a $500 million war chest, and says he's ready to make a deal for a US cannabis company

Tilray CEO Irwin Simon told Insider he's not waiting on legalization to make a deal with a US company. Instead, the executive said he's closely watching US cannabis companies with good assets and branding. "I'm making a big bet," he said.

Top psychedelics VCs warn the industry's boom could turn into a correction and some companies are a 'flash in the pan'

In the third edition of Insider's psychedelic VC predictions series, top investors said they expect big changes to the landscape. Some said that many companies will fail as the market corrects itself. Others predicted a new era for psychedelic compounds.

Executive moves

• Psychedelics giant Compass Pathways said on Thursday that Guy Goodwin, an emeritus professor of psychiatry at the University of Oxford, would join the company as chief medical officer.
• Philadelphia 76ers legend Allen Iverson is joining Al Harrington's California cannabis company, Viola Brands.

Deals, launches, and IPOs

• London Stock Exchange-listed medical cannabis company Kanabo is acquiring Canada-based Materia Ventures, to create what the companies say is the largest European cannabis company. The financial terms of the transaction were not disclosed.
• Cannabis company Verano announced on Monday that it would acquire Nevada-based cannabis company Sierra Well in a $29 million cash and stock deal.
• Poseidon Garden Ventures, Poseidon Asset Management's third fund in the cannabis space, said on Monday that it invested in its first three startups: cannabis operator JKL2, cultivation tech company Adaviv, and dispensary tech provider Dispense.
• Psychedelics company Field Trip Health began trading on the Nasdaq on Thursday under the ticker 'FTRP', the latest of a slew of psychedelics companies to list on a US exchange.
• Atai Life Sciences, the largest psychedelics company in the world by market cap, said on Wednesday that it had launched InnarisBio, a company focused on nose-to-brain delivery methods for various treatments, alongside the University of Queensland.

Policy moves

• Pennsylvania's Supreme Court ruled that the public has a right to review applications for the state's medical marijuana licenses, Law 360 reports.
• The House approved a far-reaching spending bill that provides protections to banks that work with legal cannabis companies, allows cannabis sales in Washington D.C., among other cannabis elements, Marijuana Moment reports.
• Colorado Gov. Jared Polis is creating a Cannabis Business Office for the state, to promote social equity in the industry, The Denver Post reports.

Research and data

• Legalizing cannabis federally would reduce arrests but could put some minority entrepreneurs out of business, according to research led by Carnegie Mellon's Jonathan Caulkins and published in the Boston University Law Review. The analysis shows that expunging records for cannabis possession could advance social equity goals more than other reforms.
• CBD can reduce nicotine cravings in rats, according to a new study published in the journal Psychopharmacology. The data suggest that CBD may be a tool to help people alleviate cravings after quitting cigarettes.
• Hemp goes 'hot' - as in, exceeds the legal threshold of 0.3% THC - because of genetics and not environmental stress, as was previously thought, according to new research from Cornell University published in the journal Global Change Biology-Bioenergy. Hemp that exceeds the THC threshold can cause farmers to lose their entire crop.
• Legalizing cannabis does not lead to more problematic or chaotic use, according to a new study 0f 1,225 cannabis users published in the journal Contemporary Drug Problems.

Earnings

• Tilray released its fiscal Q4 2021 results on Wednesday, reporting $142.2 million in net revenue and $33.6 million in net income.

Chart of the week

Canada's regulated cannabis sales are expected to grow 54% in 2021, according to Headset, double the US growth rate. The cannabis data company said that the Canadian market is newer and smaller than that of the US, making growth more noticeable:

What we're reading

Billionaire Charles Koch on why cannabis should be legal (Forbes)

I gave up alcohol and turned to weed instead, and now I'm a more present and patient parent (Insider)

New York will be buzzing with union jobs thanks to upcoming pot industry (New York Post)

Marijuana helped former NHL champion Darren McCarty beat alcoholism, he says. 'I would've been dead without it.' (Insider)

Struggling MedMen Seeks Restructuring, Turnaround (LA Business Journal)

Is medical cannabis really a magic bullet? (The Guardian)