CAOA Comment Deadline
The comment deadline for CAOA (senate cannabis bill) is Wednesday.
Missouri Legalization?
Fair Access Missouri filed paperwork with the secretary to petition for a ballot initiative to legalize marijuana in the state. The group is focused on criminal justice reform and expunging records of those with low-level marijuana offenses. The initiative includes a 6% retail tax, which will generate millions for the state. Local governments would also be able to collect a 3% tax on sales. The group will need to collect 175,000 signatures to qualify for the November 2022 ballot. This will require significant effort as that is about 3% of the entire population of Missouri. If passed, Missouri will become the 20th state in the US to have legal recreational cannabis.
HEXO
HEXO is down 58% in 3Q21 and now down 34% YTD. The company announced the real with Redecan after a 458% move higher in 4Q20 on the back of hope for US legalization in 2021. Consensus estimates have moved lower for the combined company in June and are likely still too high. The company announces the completion of the acquisition of all of the outstanding shares of the entities that carry on the business of Redecan, Canada’s largest privately-owned licensed producer. At closing, HEXO paid the selling shareholders of Redecan $400 million in cash (subject to certain customary closing adjustments) and delivered 69.7 million newly issued common shares of HEXO. As the CEO of HEXO said, "this is an exciting day for HEXO, but even more so for Redecan employees and investors as they now have liquidity. The completion of this transaction is aligned with our corporate growth strategy. It will further strengthen our position as a leader in the Canadian cannabis industry, bolstering the combined company as we look towards becoming a top-three global cannabis products company and continue on the path towards positive EPS. Why does every unprofitable Canadian cannabis company think it will be a global play when it can't make money in its home market?
