July Roundup: Canada remains a hub of cannabis deal activity
July went by without U.S. Attorney General and legalization opponent Jeff Sessions releasing long-anticipated revisions to marijuana enforcement in the United States.
He had asked a crime task force to make recommendations by July 27, but the date passed without him issuing any new guidance. Congress, meanwhile, rebuked him by including an extension of the so-called Rohrabacher-Farr amendment; which blocks the Justice department from spending money to crack down on state legal medical marijuana programs.
With Canada still planning to legalize next year, the Great White North remains the center of cannabis deal activity. Here are some of the most significant deals and marijuana stories from July.
Under its new ownership, High Times plans to go public on the Nasdaq this fall through a special purpose acquisition company. It anticipates selling to Origo Acquisition Corp. for $250 million, Reuters reported. In June a consortium of 20 investors acquired a majority stake in High Times, valuing the media and conference brand at $70 million. Venture Capitalist Adam Levin led the round through his firm Oreva Capital.
Struggling social media app MassRoots raised $1.2 million from unidentified family offices and high net worth individuals. The news came after Over the Counter Markets notified the company of activity promoting its stock. MassRoots denied any knowledge of the activity. Paying to promote one’s own stock must be reported. In May, the company said it needed to raise $5 million in the next year to stay in business. Last year the company tried and failed to be listed on the Nasdaq.
Publicly traded Kush Bottles struck a deal to make custom packaging for CannaKorp’s CannaCloud, a device sometimes known as the “Keurig of cannabis,” for its single dose delivery. CannaKorp’s leadership includes several former Keurig executives. It anticipates a rollout in coming months. Terms of the deal were not disclosed. Kush Bottles also announced plans to enter the Alaskan market.
Canadian cannabis companies raised more than $770 million in the first half of 2017, up almost 1,700% year over year. The frenzy of interest comes as Canada gears up for 2018 when it plans to become the first industrialized country to legalize recreational use.
Most of the money has gone to producers including Aphria, which raised C$100 in April, MedReleaf which had a C$100 million IPO in May and Aurora which raised C$75 million in May according to Viridian Capital Advisors.
Cannabis finance site New Cannabis Ventures found that Canadian cannabis stocks in aggregate are down for the first half of the year due in part to a glut of competitors.
Australian medical marijuana company Creso acquired Nova Scotia based producer Mernova Medical for C$ 10.1. Creso Pharma is the first Australian company to enter the Canadian market. Creso also has a license to distribute its CBD products in the Czech Republic.
Tempe, Arizona-based Harvest acquired Modern Flower to become the largest medical marijuana company in Arizona. Terms of the deal were not disclosed. The company has licenses in Arizona, Illinois, Maryland, Nevada and Pennsylvania.