Marijuana - Up in Smoke - Industry related news & stock comments

The new normal in Marijuana

The Globe and Mail reports in its Wednesday, Sept. 16, edition that a group of prominent greenhouse operators has launched a lawsuit against Canopy Growth and two related cannabis companies seeking $500-million in damages. The Globe's Mark Rendell writes that in 2018, several businessmen from Leamington, Ont., joined with Canopy Growth, Canopy Rivers and TerrAscend to build a 1.3-million-square-foot cannabis cultivation facility in their hometown. The complex was completed and licensed in 2019. However, the joint venture that owns and runs the project, called PharmHouse, is teetering on the edge of bankruptcy, the lawsuit says, after Canopy and its partners decided not to buy cannabis from the facility at a prenegotiated price, as the joint venture agreement stipulated. The plaintiff says it spent huge amounts of money building the greenhouse complex based on guaranteed purchase agreements. In a statement of claim filed in the Ontario Superior Court, it says its contribution to the project to date in terms of property, equipment and product is valued at $114-million. The company says it now believes Canopy and its partners were never serious about honouring the purchase agreements.

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Ron, thanks for the heads up to get us out of these stocks, what a massacre

The Globe and Mail reports in its Tuesday, Dec. 31, edition that Horizons Marijuana Life Sciences Index ETF (HMMJ) ($8.17), which once commanded more than $1-billion of investors' money, has fallen to its lowest point ever. The Globe's David Milstead writes that the fund's unit price is down 66 per cent since March 19 and has been halved since the middle of August. Canadian cannabis stocks have tumbled in 2019 as most companies have badly missed sales expectations in the sector's troubled rollout. The sector did not get a break from bad news over the holidays. Aurora Cannabis, Canopy Growth, Cronos Group and Organigram Holdings have all saw their shares decline. As the market capitalization of pot companies shrivels, a number of smaller cannabis companies are getting dropped by the index-makers which determines the stocks held by funds such as HMMJ. In a group of 80 pot stocks that have been members of the Solactive North America Marijuana Index at one point in 2019, just 16 have posted positive returns for the year. Thirty-eight of the 80 companies have lost at least half their value in 2019. Horizons uses the Solactive index as the basis for HMMJ, but can make adjustments based on the stocks' liquidity.

Illinois is ringing in the new decade by becoming the 11th state in the country, as well as the District of Columbia, to allow the legal sale and purchase of marijuana. Under the new state law, adults over the age of 21 may own 30 grams of cannabis flower, 500 milligrams of THC in pot products and 5 grams of cannabis concentrate

This is well said and sums up nicely some of the points I have made.

The Globe and Mail reports in its Tuesday edition that cannabis industry expectations got badly out of synch with reality. The Globe's guest columnist Chris Naprawa writes that the firing of Bruce Linton from Canopy Growth was seen as a milestone in the demise of market exuberance. The industry, however, should be thanking him for the drive and passion that he brought to the market. Canopy showed the market how you could build a global company at a pace rarely seen in any industry. Its balance sheet is a safety net that is the envy of the industry. A new chief executive officer was recently announced to lead the company, but Mr. Linton created something special. Mr. Naprawa says is too early to put suits in charge of these growth companies, cannabis is still a Klondike industry. Ontario's weed business is a mess. Mr. Naprawa says we are now seeing conversations to open up the market in a meaningful way. He hope that happens and entrepreneurs get a chance to provide the services that the market plainly needs. Today the illicit market provides better selection, service and prices -- and less packaging and waste. It is not the fault of cannabis companies for restrictive measures holding back the market.

The Financial Post reports in its Tuesday edition that if you want pot edibles in Canada, you are going to have to go a long way east. A Bloomberg dispatch to the Post says that Monday marked the first day Canadians can legally buy a range of new cannabis formats including vapes, edibles and beverages. Newfoundland was one of the only provinces that appeared to have some of those products available for sale. CannabisNL, the province's government-owned wholesaler, had chocolate squares and gummies from Auxly Cannabis Group brands Kolab and Foray available for sale on Monday morning. Many other choices were listed as "coming soon." Most other provinces were days if not weeks away from offering the new products. Alberta will not have products on store shelves until mid-January. The outlet-rich province has contracts with 42 cannabis producers and about half of them will be offering the new products. Quebec will begin selling the new products on New Year's Day if it has the product. Even then, it will likely be a limited offering of some teas and perhaps one beverage. In Ontario, the new products will begin to appear in retail stores in early January. Representatives for British Columbia ignored Bloomberg's call.

$BBT.C - Benchmark Botanics Receives 2nd Cannabis Cultivation Licence

The chart is not a disaster like so many junior cannabis stocks.

Makes me wonder why ? with 155M I/O one would think this one should be at 5 cents ....

benchmarkbotanics.com/

Sate of the nation, retail investors given up on Cannabis

The Globe and Mail reports in its Monday, Nov. 25, edition that Scotia Wealth director Elliott Fishman says very little investor money is now going into cannabis names through his brokerage's retail platform. The Globe's Tim Shufelt writes that companies that need money have had to resort to debt financing with hefty interest rates. Amid that brutal reckoning, many cannabis shareholders have ridden their holdings all the way down. York University finance professor Mark Kamstra says, "It's pretty common for the retail investor just to hold on until the bitter end." Prof. Kamstra studies asset bubbles. Justin Caron, a grief counsellor for bereft investors facing disastrous financial losses, says inexperienced investors not only dramatically overexposed themselves to a speculative sector, they also did not have a plan in place in case of a sell-off. Facing losses of 50 per cent or more, they consider their only option at this point to be holding out for a recovery, he adds. "A lot of people are saying they don't even want to log into their accounts." Mr. Fishman says investors will need to separate the probable winners from the losers, pay attention to valuations, and focus on the path to profitability.

The U.S. will get it right compared to Canada

The Globe and Mail reports in Friday, Nov. 22, edition that Canopy Growth, Aurora Cannabis and Aphria rallied on Thursday after a U.S. congressional committee passed legislation to decriminalize cannabis. A Reuters dispatch to The Globe reports that CFRA Research analyst Garrett Nelson says, "We think federal legalization would be a big positive for investor sentiment surrounding cannabis equities, which have been battered by oversupply and a steep price decline for the underlying commodity since becoming legal in Canada." The approval comes two months after the House passed a bill to advance legislation that would allow banks to provide services to cannabis companies in states where it is legal. The latest bill, which has more than 50 co-sponsors, enables states to set their own policies while allowing to expunge federal cannabis convictions and arrests. Additionally, the bill will authorize a 5-per-cent federal sales tax on cannabis products that are manufactured in or imported into the United States.

Ontario is a basket case

The Financial Post reports in its Thursday, Nov. 21, edition that the Ontario Cannabis Store will move ahead with a "hybrid" wholesale model that will allow the private sector to be involved in storing and distributing cannabis, according to an email obtained by the Post, sent by the Crown Corporation to licensed producers on Tuesday. The Post's Vanmala Subramaniam writes that the move comes in response to "feedback" provided from producers to the OCS, many of whom had demanded more involvement in the distribution of cannabis -- which is now controlled solely by the OCS -- to maximize cost efficiencies. "

Benchmark Botanics Inc.

BENCHMARK BOTANICS RECEIVES CANNABIS SALES LICENSE

GAINS APPROVALS FOR A JV WITH LARGE CHINESE PHARMACEUTICAL COMPANY



Benchmark Botanics Inc.'s (BBT.C) wholly owned subsidiary, Potanicals Green Growers Inc., received its retail sales license from Health Canada, on July 26, 2019.

The license allows Benchmark to supply and sell finished cannabis products to provincial governments throughout Canada and through Canada's distribution and retail supply chain. Benchmark will be providing recreational and medical dried cannabis, capsules and other forms of cannabis products as the government of Canada makes more forms of the product legal for sale and consumption later this year.

"Receiving the Health Canada sales licence is of significant importance and signals a giant step forward for the growth of Benchmark," commented William Ying, chief executive officer of Benchmark Botanics. "The sales licence gives the company the ability to sell additional products and is very timely with the new legalization for the edible market soon upon us. Our sales license will allow us to enter the Canadian medical and recreational marketplaces, as well as fulfill potential international supply agreements."

Along with the approvals for the Zhejiang Yatai Pharmaceutical Co. Ltd. joint venture and sales license represent another key milestone in Benchmark's path toward becoming one of global leaders in the development and commercialization of cannabis and cannabis-derived products designed to support health and wellness.

Since late 2017, Benchmark has secured all regulatory approvals required to harvest and sell cannabis, which has contributed to the continuing growth and enhancement of the business.

Benchmark and Zhejiang Yatai Pharmaceutical Co. Ltd. signed a definitive agreement to establish a joint venture company in Canada, subject to compliance with Canadian Cannabis Act and related regulations, to cultivate, manufacture, process and market high-content cannabidiol (CBD) cannabis products, along with the research and development of medical cannabis; and the extraction, isolation and purification of high-CBD cannabis oil for commercial applications. Zhejiang Yatai is a publicly listed company on the Shenzhen Stock Exchange (stock code: 002370).


Zhejiang Yatai Pharmaceutical is one of the top 500 China Enterprises founded in 1989 which researches, produces, sells, and exports pharmaceutical products, tablets, capsules, patches, powder injections in China and internationally.

Zhejiang Yatai 2018 Financial Highlights

Market Cap $ 8.525 B USD
Revenues $188.29 M USD
Net Income: $30.1M USD
803 employees
50 offices in 24 provinces China
GMP standards / modern pharmaceutical production techniques
2002 ISO 9001 quality certification – ISO 14001 environmental protection

en.yatai.com/

Benchmark Botanics Inc. – $0.40

Benchmark Botanics Inc. a licensed producer of medical dried cannabis at its facility in Peachland, British Columbia. Through its 100-per-cent-owned subsidiary, Potanicals Green Growers Inc., The Peachland Cannabis Complex is currently a 12,700 sq. ft. and a production capacity of 550 kg of dried cannabis. Expansion plans are underway to construct an additional 50,000 sq. ft. facility to increase production capacity. The Pitt Meadows Greenhouse Operations is in Pitt Meadows, British Columbia, will be Benchmark's primary cultivation facility when completed. Located on a 5-acre property, the Pitt Meadows Greenhouse Operations will have a total of 174,240 sq. ft. Recently signed a JV with large China Pharmaceutical Zhejiang Yatai to set up a CBD products business in Canada for global sales.

· Market Cap: $ 55.6 Million
· Total Debt to Total Capital: 11.5%
· Total Debt to Total Equity: 31%
· YTD Total Return: 81.96%

benchmarkbotanics.com

Today on Tilray

Tilray, Inc. (NASDAQ:TLRY), a global pioneer in cannabis research, cultivation, production and distribution, today announced it has entered into an agreement with Cannamedical Pharma GmbH (“Cannamedical”) through its wholly-owned subsidiary Tilray Portugal Unipessoal Lda. (“Tilray Portugal”), to export a wholesale shipment of $3.3 (€3) million worth of medical cannabis from Portugal to Germany. The shipment, which is expected to be completed in fall 2019, will be Tilray’s first from its state-of-the-art EU campus in Portugal to supply patients in Germany.