There was exciting news this week as MediPharm Labs Corp (TSXV: LABS)—a leader in specialized, research-driven cannabis extraction and cannabinoid isolation—received a leg up on the competition after its' subsidiary, MediPharm Labs Australia, received its cannabis manufacturing licence from the Australian Office of Drug Control on May 21, 2019.
This is a significant milestone for MediPharm Labs that establishes the company as an early mover in the Australian cannabis industry. In addition, MediPharm Labs Australia is expected to provide the company with a global supply chain platform and a foothold in the Asia-Pacific region.
The licence authorizes MediPharm Labs Australia to the manufacture extracts and tinctures of cannabis and cannabis resin under the Narcotics Drugs Act 1967. Products manufactured under the licence must be only for the purpose of a clinical trial or prescribed as medicinal cannabis products.
"We are extremely pleased MediPharm Labs has been selected to be involved in this landmark, clinical trial to properly evaluate the potential benefits of CBD and that can lead to important medical therapies for millions suffering from opioid use disorder. We are committed to providing consistent, high quality, pharma-like active ingredients to support advancements in scientific CBD drug development."
– CEO of Patrick McCutcheon, MediPharm Labs.
The company also announced that it has been selected by The Mount Sinai Hospital to participate in a clinical trial dedicated to developing a non-addictive oral gel cap medication for the treatment of opioid use disorder through anti-anxiety intervention utilizing hemp-derived CBD combined with a proprietary formula.
This will be a U.S. and international large-scale, multi-site clinical trial that will include at least 500 patients spanning the United States, Canada, Australia, Europe and Jamaica. MediPharm Labs will be the exclusive manufacturer of a proprietary hemp-derived CBD oral gel cap medication utilizing the formula provided by Timeless Herbal for all phases of the clinical trials related to this study that will allow researchers to test an investigational product containing CBD active ingredient.
MediPharm Labs and Timeless Herbal will jointly own any intellectual property developed during the clinical trial, and MediPharm Labs will be the exclusive manufacturer for products resulting from this study.
Canopy Growth Corporation (TSX: WEED) finalized an all-cash transaction to acquire This Works for a purchase price of £43 million (CDN $73.8 million).
Founded in 2004, This Works has cemented itself as a global leader in natural skincare and sleep solutions with a devout customer base spanning 35 countries. Headquartered in London, England, This Works offers a range of high-quality natural skincare and sleep solution products that have rewarded the company with a loyal following of customers purchasing their best-known products including deep sleep pillow spray, morning expert hyaluronic serum, and skin deep dry leg oil.
This acquisition is a key aspect of a multi-faceted hemp and CBD strategy as Canopy Growth continues to build upon its vertically-integrated production and marketing platform. This currently includes thousands of acres of hemp production across several continents, hundreds of millions of dollars of capital investment into hemp-derived CBD production and processing, rapid expansion across the European Union and other key regions, and the introduction of new CBD-infused products and brands to the global beauty, wellness, and sleep solution space.
"When I welcomed Tim four years ago, Canopy Growth had a market cap of $93 million, two partially licensed production sites in Ontario and a single acquisition under our belt. After more than 26 acquisitions, 8 financings worth over $6.2 billion, the sector's first TSX and NYSE listings, and reaching a market cap of $21 billion, Tim exemplifies what it means to be a leader at Canopy Growth."
– Chairman and Co-CEO of Canopy Growth, Bruce Linton
The company also appointed Mike Lee to its executive leadership team in the acting role of Chief Financial Officer (CFO), effective June 1, 2019. Lee's permanent role as CFO will commence upon receiving Health Canada security clearance required for all officers and directors of the Company.
Lee brings a wealth of experience from the consumer goods & beverages industry, having worked for companies such as E. & J. Gallo Winery, PepsiCo, and recently Constellation Brands, where he served as Senior Vice President & CFO for their US$3B Wine & Spirits Division.
He worked closely with Constellation Brands' executive leadership to transform their premium Wine & Spirits business, applying financial rigor along the way with a true sense of urgency that translated strategy into action. Lee also led the business transformation agenda at Constellation Brands, focused on digital enablement and operating model design. Most recently, Lee has served in the role of Executive Vice President, Finance at Canopy Growth Corporation.
Cann Group (ASX:CAN) finally has access to a cannabis manufacturing licence, completing the trifecta for the company. The pot stock will be working through IDT Australia (ASX:IDT), an Australian pharmaceuticals manufacturer which is the recipient of the licence.
Only a handful of other companies have all three licences from the Office of Drug Control which allow them to research cannabis, grow it, and manufacture products from it. The others include AusCann (ASX:AC8), the first listed company to receive all three, Little Green Pharma in West Australia and MediFarm in Queensland.
Of the listed companies, only Cann has a growing permit — the permission slip that dictates what a company can grow, when, and what it can do with it. This is the final hurdle for actually growing marijuana legally in Australia. IDT will be allowed to make the resins Cann wants to sell to companies such as AusCann as well as make final dose forms such as tinctures, liquids and tablets.
"We always had a strategy of having hub and regional cultivation nodes, so we'd been looking and when we ran into some headwinds with the concept of Melbourne Airport we decided to decided to move first on one of the regional nodes, and that's when Mildura fitted into that pattern."
– CEO of the Cann Group, Peter Crock
CannPal Animal Therapeutics Ltd (ASX:CP1) has had one of its major shareholders, Merchant Funds Management, increase its stake to 19.61 percent from 18.61 percent. The increase was the result of a series of on-market trades, the most recent being the purchase of 1 million shares last Thursday 16 May for $145,478.
Merchant is a boutique Perth-based fund manager focused on early-stage ASX opportunities. The buying activity from Merchant follows purchases from a number of CannPal board members. The most recent purchase was from founder and managing director Layton Mills who purchased 65,000 shares via on-market trades earlier this month.
The share purchase from Mills follows purchases from Max Johnston in March, chairman Geoff Starr in February, and Robert Clifford in January. CannPal is a pharmaceutical-focused animal health company researching the benefits of medical cannabis for companion animals such as dogs and cats.
Origin House (CSE: OH), a North American cannabis products and brands company announced preliminary unaudited revenue of approximately $11 million for the Q1 2019, at an approximate gross margin of 15 percent.
In addition, the company generated preliminary unaudited revenue for the month of April of approximately $6.5 million, while gross margins are expected to continue to trend upwards from Q1 to Q2. The company's wholly owned distribution division, Continuum, generated preliminary revenue of approximately $4.8 million during April, representing its highest monthly revenue to date.
Origin House's achievements during the first four months of the year are the result of both solid organic growth and strategic merger and acquisition-based initiatives. The company now operates a distribution platform on a state-wide basis in California, as well as a robust Canadian online and brick and mortar retail platform.
"If 2018 was a year of building for Origin House, 2019 is rapidly progressing toward an inflection point where the platform we have built begins to demonstrate its true financial power, with brands signed early in the year, rolling-out through our network and a robust pipeline of brand opportunities ahead of us."
-Mark Lustig, Chairman and CEO of Origin House
The Supreme Cannabis Company, Inc (TSX: FIRE) and Blissco Cannabis Corp (CSE: BLIS) entered into a definitive arrangement agreement under which Supreme Cannabis will acquire all of the issued and outstanding common shares of Blissco not already owned by Supreme Cannabis.
The arrangement is an all-stock transaction with a total value of approximately C$48 million. Each Blissco Share will be exchanged for 0.24 of a common share of Supreme Cannabis.
Shareholders of both companies will benefit from the combined companies' expanded product offerings, infrastructure and consumer reach. Through the acquisition, Blissco will join Supreme Cannabis' exclusive portfolio of premium brands and operate as Supreme Cannabis' health and wellness business.
Green Growth Brands, Inc (CSE: GGB) completed the repurchase and cancellation of 27,300,000 of its common shares held by GA Opportunities Corp, representing approximately 13% of its outstanding shares.
Aggregate consideration for the Repurchase Transaction was C$89 million, or approximately C$3.26 per common share, at a significant discount to the current market price of GGB's common shares.
'We are pleased to have completed our buy back of the shares previously held by GA Opportunities," said Peter Horvath, CEO of GGB.
"While we continue to focus on the rapid expansion of GGB, the opportunity to repurchase these shares well below the current market price immediately and directly increased shareholder value."
-Peter Horvath, CEO of GGB
SOL Global Investments Corp (CSE: SOL) announced that it had entered into letters of intent to acquire ECD, Inc., which operates as Northern Emeralds, an industry leading cannabis cultivation, processing and distribution company headquartered in Humboldt County, California.
The deal also includes the acquisition of six licensed dispensary companies in California that will subsequently operate under the nationally recognized "One Plant" brand. SOL Global intends to open One Plant-branded dispensaries throughout California, Florida, and Michigan.
SOL Global intends to establish a new separate cannabis multi-state operator ("MSO") by combining its proposed acquisitions of Northern Emeralds and the six "One Plant" California dispensaries with its previously announced proposed acquisition of Michigan-based MCP Wellness Inc. and the Company's existing Florida-based cannabis company, 3 Boys Farms, LLC.
If the proposed acquisitions are completed, SOL Global has confirmed that it intends to pursue a "going public transaction" of the MSO by way of an initial public offering, reverse takeover, plan of arrangement or other similar transaction that will result in the listing of the shares of the MSO on a recognized Canadian stock exchange.
The new chief executive officer (CEO) of AusCann Group Holdings Ltd's (ASX:AC8), Ido Kanyon, commenced the role this week. Kanyon's appointment was announced in February following a comprehensive international executive search conducted by the board.
With more than 15 years of experience in the pharmaceutical and medical device business across the life-sciences value chain, Kanyon has successfully launched innovative medicines globally covering a range of commercial strategies from digital health solutions to innovative biologics.
AusCann said Kanyon was highly regarded in the pharmaceutical industry and his background in product development and commercialisation was ideally suited to lead the company's next phase of growth as a pharmaceutical development, sales and marketing business.
"I see tremendous opportunity for AusCann to lead in the delivery of cannabis-based pharmaceutical solutions that are endorsed by physicians and address the needs of patients who are suffering from inadequately treated medical conditions. The company has built a strong platform on which we will continue to grow."
– Ido Kanyon, CEO of AusCann
Anticipating the legalization of adult-use cannabis edibles, Organigram Holdings Inc (TSX VENTURE: OGI)—the parent company of Organigram Inc, a leading licensed producer of cannabis—announced a $15 million investment commitment in a high-speed, high-capacity, fully-automated production line with ability to produce an estimated 4 million kilograms of exceptional chocolate cannabis edibles per year.
Organigram expects to take delivery of the line in the fall. In addition to its sheer capacity and adaptability to anticipated future growth of the domestic and international chocolate edibles markets, the line is expected to allow Organigram's product development team to introduce chocolate innovations unique not only to the cannabis industry, but to the chocolate industry as a whole
The full Organigram chocolate offering that is under development is expected to be supported by a carefully curated collection of partners and suppliers identified for their own global expertise and unwavering commitment to quality. The investment will contribute to a state-of-the-art chocolate moulding line and a fully integrated packaging line, that includes advanced engineering, robotics, high-speed labeling and automated shipping carton packing.
Innovative Industrial Properties Inc (NYSE: IIPR), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced that it has closed on the acquisition of a property in Saxton, Pennsylvania, which comprises two buildings totalling approximately 266,000 square feet of industrial space.
The purchase price for the Pennsylvania property was $13.0 million, excluding transaction costs. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with a subsidiary of Green Leaf Medical, LLC, which intends to operate the property as a licensed medical-use cannabis cultivation and processing facility.
Green Leaf Medical has redeveloped approximately 103,000 square feet of the industrial space for medical-use cannabis cultivation and processing, with the remaining approximately 163,000 square of industrial space available for future redevelopment.
"We are pleased to add multi-state operator Green Leaf Medical to our premier tenant roster. We are thrilled to serve as one of their capital sources to allow them to continue those expansion initiatives and reach an ever-growing number of patients across the Northeast."
– Paul Smithers, President and Chief Executive Officer of IIP.
As it gears up for its first hemp crop in the US, CropLogic (ASX: CLI) has selected three seed varieties with "superior genetics" that are known for their resilience, CBD content and a proven record of successful growing in the region.
The varieties include T2, Midwest and Berry Blossom and come from companies with good reputations in Oregon where they will be planted. With hemp biomass sold based on CBD content, CropLogic explained that higher CBD yields increased the bottom line and were a priority when selecting seeds.
The industry standard is that buyers will pay a dollar amount per CBD percentage point. CropLogic revealed that 900,000 pounds biomass with at US $4.00 per CBD percentage, the crop would generate US$36 million – assuming that the CBD yield averaged 10 percent.
LGC Capital Ltd. (CVE: LG) announced that after much negotiation, it had successfully acquired additional shares in Australia's licensed medical cannabis producer Little Green Pharma (LGP) bringing its ownership from 14.1% up to 40.4%. LGP was the first, and is currently the only, domestic cannabis company in Australia producing a locally grown medicinal cannabis medicine for patients.
LGC Capital believes the opportunity to increase its ownership in LGP creates significant value for its shareholders and enables the corporation to further take part in the rapidly expanding Australian medical cannabis market. Little Green Pharma has had over 400 patients approved in Australia, with new patients increasing exponentially month-over-month.
Little Green Pharma produces its products in compliance with Australia's strict Therapeutic Goods Order 93 Standard for Medicinal Cannabis and is one of only a handful of companies with an EU GMP recognised medical cannabis facility.
"To be the first in Australia to grow and produce a full line of Medical THC Cannabis products, in accordance with both Australian and European standards, represents a great opportunity for LGC and its global initiatives."
– CEO of LGC Capital, Mazen Haddad
Watch this space for future weekly updates.