Photographer: Ivan Valencia / Bloomberg
Photographer: Ivan Valencia / Bloomberg
A double dose of good news last week prompted a quick response from the marijuana industry multi-state operators moving to increase their business, and fast.
On the morning of January 6, when the results of the race in the Georgia Senate were turning in favor of Democrats and New York Gov. Andrew Cuomo proposed legalizing marijuana in his state, Suddenly, the executives of Curaleaf Holdings Inc. they realized that the company could benefit from some extra money. They went to bankers and lawyers around 11 a.m. and in less than 24 hours, the company had raised more than $ 200 million. offering more shares on the Canada Stock Exchange.
“It simply came to our notice then. That’s why we pulled the trigger as fast as we did, to prepare for what we believe will be a very dynamic 2021, ”President Boris Jordan said in a telephone interview.
He anticipates that Curaleaf will want cash for the acquisitions, as the industry consolidates faster than expected. He also sees that states are under greater pressure to allow medical and adult use after the change of the nation towards the democratic party. In New York alone, Jordan said Curaleaf needs to quadruple its size to meet demand.
While the industry was expected to gain momentum this year, developments have progressed faster than expected. For now, the file The STATES Act, which would give states more legal authority to determine their own marijuana rules, is considered the most likely federal regulation to be passed soon, as opposed to the MORE Act, which would completely decriminalize cannabis. The STATES law could be passed in the second half of 2021 or the first half of 2022, according to Cowen analyst Vivien Azer.
Meanwhile, Jordan said he previously did not expect the MORE Act to be passed until the next administration, but now he believes it could happen at the end of President Joe Biden’s four-year term.
Cannabis stocks have risen with the brightest outlook. An industry index rose 16% last week.
Green Thumb Industries Inc., one of the largest in the US multi-State operators also see the expansion accelerate as a result of recent news, CEO Ben Kovler said in a telephone interview. With potential access to capital markets sooner than expected, Kovler said the company is considering refinancing its current $ 100 million debt, which has a 12% interest rate.
“We could create an additional $ 100 million from the air by funding 6%,” he said. It could then be invested in the business and boost the share price. The staffing staff is also on the agenda. “We hired more than 1,300 people in 2020 and we would expect it to be bigger in 2021,” Kovler said.
Green Thumb is also stepping up efforts to register on U.S. stock exchanges, Kovler said. Companies have largely taken advantage of markets in Canada and not the United States, where they have been shunned by concern about legal risks due to the federal ban. But Kovler said opinions change about it.
“I don’t think there’s any legal issue preventing that,” he said. “I think the NYSE and the Nasdaq should list the cannabis companies. Otherwise, it is a massive transfer of wealth to Canada.
APPOINTMENT OF THE WEEK
“I think now, after Covid, and with that democratic dominance in the U.S. government, we’re going to start to see a positive move in the U.S. legalization approach – and that’s something that will support global legalization,” he said. said Oren Shuster, CEO and co-founder of IM Cannabis Corp., said in a telephone interview. IM Cannabis operates in Germany, Israel and Canada.
NAME OF THE WEEK
- $ 300 million: The amount of annualized tax revenue New York is expected to generate from recreational cannabis use, according to Cowen’s Azer.
WHAT YOU NEED TO KNOW
- Amsterdam vol restrict tourists from their cafes selling cannabis as part of a plan to combat the flow of hard drugs and organized crime related to the marijuana trade.
- How will he do it announces its plan to legalize marijuana as part of the 2021 State Act.
- It looks like a democratic Senate raise the prospects for legal cannabis and accelerate bank approval for industry.
EVENTS
Monday 1/11
Tuesday 1/12
Thursday 1/14
- Aphria Inc. reports second quarter earnings before market opening.