​3 Important Items that Happened in the Cannabis Sector This Week

Stephen L Kanaval  |

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Last week, we saw KushCo's revenue increase 240%, while losses widened. Plus, Trulieve  (TCNNF) ()banked $35.9 million and Cresco Labs  (CRLBF) continued to dominate Illinois. Here are the important things from this week.

1. Canopy Growth Buys the Rights to Acreage Holdings

We covered this news in a full article, but this deal will be extremely impactful down the line - of course, all of this hinges on a gigantic "if".

The deal, which I will break down in more detail below, is a huge win for Acreage Holdings  (ACRGF) as it is quickly trying to increase its footprint across North America, and now the company has access to capital that few other cannabis operators can compete with. We expect more acquisitions from Acreage Holdings in the near future. The deal is valued at approximately US$3.4 billion on a fully-diluted basis, represents a premium of 41.7% over the 30-day volume weighted average price.

"Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists," Bruce Linton, Chairman and co-CEO of Canopy Growth said in the press release.

Rumors of the deal were churning on Wednesday and even a guest appearance on CNBC was booked and then cancelled. Many speculated on how  (CGC)could purchase Acreage outright with the rules of the TSX standing in the way, but it was always going to be a rights deal, if it was going to get done now.

Of course, Acreage Holdings is not slowing down. Just hours before the CGC deal was announced, the company increased its footprint significantly by acquiring Nevada's Deep Roots Medical for $120 million in cash and stock. The deal ushers Acreage into a booming Nevada cannabis industry thanks to the 43 million tourists that visit Las Vegas generating an estimated $800 million in cannabis sales by 2022. Deep Roots brings with it seven retail locations and respective licenses and an 18,000 square-foot indoor flowering canopy within a 40,000 square-foot building located in Mesquite, Nevada. Within this same Mesquite facility, Deep Roots has an extraction laboratory and room to expand as well. In addition, Deep Roots also has four in-house brands- Chiller, Deep Roots, Bluebirds and Hex Twists - all of which cover the gamut from pre-rolls to gummies and candies.

2. Aurora Receives German Medical Cannabis License and will begin Construction this May

Aurora Cannabis  (ACB)closed the public appeals process and has received production tender from the Bundesinstitut für Arzneimittel und Medizinprodukte BfArM, Germany's Federal arm for drugs and medical devices, and they will now begin 12-months of construction on a facility that will be able to produce a minimum of 1,000 kgs of cannabis annually. Those production numbers will expand over time, but German medical patients will now receive locally grown cannabis.

"We are thrilled with the positive outcome of the tender process, and excited to start construction on our latest production facility. We are very proud of the work done by our European team. In addition to providing German medical patients with a local supply of high-quality, medical grade cannabis, this new facility will also bring additional new jobs to the German labour market," Neil Belot, Chief Global Business Development Officer, said in the company issued press release.

Aurora's tender was chosen out of 70 other applications and sets the table for Aurora to grow rapidly in Europe and in the continent's most fertile market.

3. Medicine Man Technologies Announces Record Revenues

Medicine Man Technologies, Inc.  (MDCL)saw operating revenues increase to $9,442,555 representing 168% year-over-year rise. The majority of the cash came from an IP license agreement with Abba Medix Corp, but the rest of the revenue and its growth was impressive as it all stemmed from new clients and an exciting footprint expansion.


In 2018, we invested in our corporate strategy and expanded from being a first mover in the cannabis industry to becoming a major, vertically integrated cannabis brand servicing domestic and foreign markets, said Andy Williams, Co-Founder and CEO of Medicine Man Technologies.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Companies

Symbol Name Price Change % Volume
KSHB KushCo Holdings Inc - Ordinary Shares 1.29 -0.05 -3.73 669,127
MDCL Medicine Man Technologies Inc. 3.44 -0.02 -0.58 45,731
TCNNF Trulieve Cannabis Corp 10.10 0.02 0.20 159,756
CRLBF Cresco Labs Inc 6.17 -0.14 -2.26 191,540
ACB Aurora Cannabis Inc. 3.69 0.01 0.27 14,691,541 Trade

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