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Cannabis-Linked Securities Update: December 2020

James B. Francis, CFA
Managing Director of Publicly Traded Securities Research, CRB Monitor

CRB Monitor tracks 1,250+ publicly-traded, Cannabis-Related Businesses (CRBs) globally, which have 1,500+ traded securities. We categorize CRBs into our proprietary cannabis risk tier framework and cannabis-based sectors. CRB Monitor also unravels and maintains complex corporate structures, linking publicly-traded parent companies to their underlying operational plant-touching subsidiaries. Custodian banks, broker/dealers, and asset managers find our data essential for pre-trade compliance, risk management, index construction, and portfolio analytics.  

Securities Database Updates

CRBMonitor_DonutChart_01

 

 

 

 

 

 

 

 

 

 

Source: CRB Monitor

News Highlights 

On the heels of the November federal and state election results, it would be reasonable to assume that we would see a subsequent escalation in corporate activity in the cannabis space. In December, we witnessed an early start to that phenomenon.  

On December 16th, Tier 1B CRB Tilray (NAS: TLRY) announced its merger with Tier 1A CRB Aphria (TSX: APHA), in what would be the largest all-cannabis M&A deal in recent memory. With a combined market cap of $3.4 billion, the resulting entity (NAS: TLRY) would be the presumptive number one pure-play cannabis-related company in terms of revenue ($685 million). This is significant, not only for the future of TLRY, but for managers of cannabis-themed funds and ETFs given significant impact to diversification and breadth of the investable cannabis universe. We will be watching that closely.

Another major story that emerged in December of 2020 was the announcement by the largest Tier 1A CRB, Canopy Growth Corporation (TSX: WEED), that Canopy will be shutting down and ceasing operations at a number of its production facilities in Canada. Per the announcement, "The production sites impacted represent approximately 17% of the Company's enclosed Canadian footprint and 100% of its Canadian outdoor production footprint." 

CRB Monitor Securities Database Highlights

Of the thousands of announcements and filings reviewed during December 2020, our research resulted in a total of 336 updates to the CRB Monitor database (80 updates to issuers’ records, 272 news releases added). The complete list of securities and detail for these updates is available to CRB Monitor Securities database clients, but below are highlights.

Select M&A/Subsidiary Highlights 

Name

Ticker Symbol

CRBM Tier

Event

ADM Endeavors, Inc.

OTCQB: ADMQ

Tier 3

ADM Endeavors, Inc. (ADMQ) in Strategic Alliance with U.S. Standard Hemp Inc.

TILT Holdings Inc.

CSE: TILT

Tier 1B

TILT Holdings Completes Sale of Blackbird

Jushi Holdings Inc.     

CSE: JUSH

Tier 1B

Jushi Holdings Inc. Acquires Remaining Equity Ownership Interests of Dalitso LLC

Fire & Flower Holdings Corp.

TSX: FAF

Tier 1B

Fire & Flower Completes Acquisition of Friendly Stranger, Happy Dayz and Hotbox Retail Chains

4Front Ventures Corp.

CSE: FFNT

Tier 1B

4Front Ventures to Open Mission Dispensary in Calumet City, Illinois

Red White & Bloom Brands Inc.

CSE: RWB

Tier 1B

Red White & Bloom to Acquire Illinois THC Cultivation Center License and Associated Assets

Halo Labs Inc.

NEO: HALO

Tier 1B

Halo Closes Acquisition of Winberry Farms

Canopy Rivers Inc.

TSX: RIV

Tier 1B

Canopy Rivers Sells Interest in Italy-Based Canapar

Tilray, Inc.


Aphria, Inc.

NASDAQ: TLRY


TSX: APHA

Tier 1B

Aphria and Tilray Combine to Create Largest Global Cannabis Company With Pro Forma Revenue of C$874 Million

 

Security/Exchange Highlights  

Name/Ticker Symbol

Ticker Symbol

EVENT Type

Result

Skylight Health Group Inc.

OTCQX: SHGFF

Name Change

Skylight Health Announces Rebrand and Corporate Plan to Provide Primary Care Nationally to Millions of Americans

PureK Holdings Corp.

TSXV: PKAN

Name Change

Purek Holdings Corp. Announces Commencement of Trading on the TSX Venture Exchange

Pac Roots Cannabis Corp.

OTCQB: PACRF

New Listings

Pac Roots Cannabis Corp. Starts Trading on OTCQB Under the Symbol PACRF

Questcap Inc.

NEO: QSC

Name Change

QuestCap Announces Name Change to Medivolve Inc.

Discover Wellness Solutions Inc. 

CSE: WLNS

Name Change

RMMI Announces Completion of Name Change to Discover Wellness Solutions

Canbud Distribution Corporation

CSE: CBDX

New Listing

Canbud Distribution Announces Listing on Frankfurt Stock Exchange

Kaya Holdings Inc.

OTCQB: KAYSD

New Ticker

Kaya Holdings, Inc. Announces 1-For-15 Reverse Stock Split - Shares to Begin Trading as KAYSD

Acquired Sales Corp.

OTCQX: AQSP

New Listing

Started trading on OTCQX® Best Market

 

Therapix Biosciences Ltd.

OTCQB: TRPXY

New Listing

Name & symbol changed from EuroLife Brands Inc. (CSE:EURO)

 

Risk Tier/Inclusion Updates in CRB Monitor

Name

Ticker Symbol

Action

Reason

Namaste Technologies Inc.

TSXV: N

Add CannMart Labs Inc. (Tier 1B)

Namaste Technologies Adds CannMart Labs as Wholly Owned Subsidiary

Ramm Pharma Corp.

CSE: RAMM

Upgrade –Tier 2 to Tier 1B

Canopy Rivers Sells Interest in Italy-Based Canapar

Gourmet Provisions International Corporation

OTC Pink: GMPR

Upgrade - Watchlist to Tier 3

Announced merger w/CRB

American Cannabis Company

OTCQB: AMMJ

Upgrade – Tier 2 to Tier 1A

Issued License in Colorado

 

Select New Additions to CRB Monitor:

Name

Ticker Symbol

CRBM Tier

CRBM Cannabis Sector

Rua Bioscience Limited

NZX: RUA

Tier 1A

Diversified Cannabis

Tasly Holding Group

SSE: 600535

Tier 1B

Diversified Cannabis

ThreeD Capital Inc.

CSE: IDK

Tier 1B

Diversified Cannabis

Orion Nutraceuticals Inc.

CSE: ORI

Tier 2

Biotechnology

Dalrada Financial Corp.

OTC Pink: DFCO

Tier 3

Industrial Machinery

 

Cannabis-Linked Equity Performance

In an apparent “hangover” from the overwhelmingly cannabis-friendly election results on November 3rd, several large CRBs received a dose of reality from investors in December. Cannabis-linked equities generally gave back a portion of their stunning positive performance from the month of November. Aurora Cannabis (TSX: ACB)’s stock price took a big hit, falling more than 30% and finishing 2020 more than 67% lower. Facing headwinds as one of the leading cultivators in North America and less-than spectacular results from international sales, ACB stacked up earnings losses throughout 2020 and ended the year one of the worst performing companies in the space. 

Cronos Group (TSX: CRON)’s stock posted a negative 24.5% return in December. CRON’s strong balance sheet relative to its competitors in the cannabis theme — thanks to major investor and Tier 1B CRB Altria Group (NYSE: MO) — did not seem to provide much cover following three straight quarters of negative earnings. On a positive note, Green Thumb Industries, Inc. (CSE: GTII) continued its surge throughout December (+13%) following the news in mid-November that its earnings were up 147% year-on-year.  

We will watch closely over the coming weeks and months as cannabis companies respond to impact from significant forces — legalization/decriminalization, a prolonged economic recession, the ongoing pandemic, and the need for increased taxation at the state level, not to mention a persistent black market — that will affect their stock prices going forward.

CRBMonitor_LineGraph_01Source: CRB Monitor, Sentieo

CRB Monitor “Top 10” Tier 1 Cannabis Companies

CRBMonitorTopTierSource: CRB Monitor, Sentieo

CRBs In the News

December was an active month for news related to publicly-traded cannabis companies. The following is a sampling of highlights from the December 2020 cannabis news cycle as tracked by CRB Monitor. Included are CRB Monitor’s proprietary Risk Tiers. 

Wondering what a Tier 1, Tier 2 or Tier 3 CRB is?

See our seminal ACAMS Today white paper Defining "Marijuana-Related Business" and its update Defining "Cannabis-Related Business"

Interested in learning more about the CRB Monitor Securities Database? Visit our website to request more information and to  get in touch with our team.

The information provided herein presents general information and should not be relied on as legal advice. If you have specific questions regarding a fact, please consult with competent legal counsel about the facts and laws that apply.

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