Weed Stocks Rally on Safe News
After a long six long months, the MSOS rallied 5% on the day yesterday on news of the Safe Act being added as an amendment to the National Defense Authorization Act for the fiscal year 2022. An attempt is underway by lawmakers, led by Rep. Ed Perlmutter (D-Colo.), to introduce the SAFE Banking Act as an amendment to the National Defense Authorization Act. The SAFE Banking Act would make it easier for banks to provide financial services to the cannabis industry, and the NDAA is a must-pass piece of annual funding legislation. The cannabis banking bill passed the House in April of this year with bipartisan support. A strong move for the industry to include the language, but the connection is between cannabis and defense funding get lost on some, and Republicans may push back on the move. “That's definitely a possibility: That [Republicans] kind of hold the line on, ‘If it's not germane, then why are we even having this discussion?’” said David Culver, head of government affairs at Canopy Growth Corporation. The founder and former CEO of Bluma Wellness, Brady Cobb, pointed out that many proposed amendments are not surprising for an NDAA bill. It’s common for lawmakers to get their top issues added to anything that must get passed because Congress only considers a tiny fraction of legislation introduced in a given session.
It is unclear if the amendment will be deemed relevant enough to the bill, as this has before tried before and failed. SAFE made an appearance in full in the final HEROES Covid relief package that passed the House last year but never passed the Senate. Republicans criticized Democrats for including cannabis banking in Covid aid legislation. However, a less detailed version of the bill has passed the House multiple times as part of the annual financial services appropriations bill. “We cannot wait any longer to address this issue which is why I’ve continued to look for opportunities to attach the SAFE Banking Act to a larger package,” Perlmutter told POLITICO in a statement. “The NDAA is moving, and I want to include the SAFE Banking Act as part of the negotiations with the Senate.” This might be the industry's last hope before it-terms to get "something passed" since banking has broader support than federal decriminalization, which could bode well for it in the upper chamber as well.
AYR Wellness closed on its New Jersey acquisition.
AYRWF is a LONG
AYR purchased 100% of the membership interests of GSD NJ LLC, one of the 12 existing vertical permit holders in the State of New Jersey and one of the state’s original six alternative treatment centers. GSD has three open dispensaries (the maximum allowed under its permit) and approximately 30,000 sq. ft. of operational cultivation and production facilities. An additional 75,000 sq. ft. of cultivation is under construction. AYR paid $101 million, including US$41 million in cash, US$30 million in exchangeable shares, and US$30 million in the form of a promissory note. In addition, earn-outs based on exceeding revenue target thresholds in 2022 will be capped at a maximum of US$97 million and payable in a combination of cash, promissory notes, and exchangeable shares. Including the maximum earn-out consideration, AYR estimates this represents 4.0x anticipated 2022 Adjusted EBITDA. “We are thrilled to be welcoming Garden State Dispensary to the Ayr team and for the opportunity to serve the New Jersey cannabis marketplace. New Jersey presents a tremendous opportunity for Ayr, with high population density, a noted demand for cannabis, a disciplined license structure, and adult-use sales rapidly approaching. We look forward to introducing the great people of New Jersey to our quality offerings, including key brands such as Origyn Extracts and Kynd premium flower, via our three retail locations and in the broader wholesale market,” said Jonathan Sandelman, Founder, CEO, and Chairman of Ayr.
VFF
Village Farms International (VFF) unveiled new corporate branding and launched a new corporate website. The company said the new branding embodies its evolution over the last four years to a vertically integrated plant-based consumer products company, targeting opportunities in North America and globally with a specific focus on cannabinoids and related health products. "As much as our new branding reflects who we are today, it also encapsulates our plans for the future. We are executing on an aggressive growth strategy to deliver durable shareholder value throughout the near-, medium- and long-terms – one that has already seen our sales1 nearly double since 2017," said CEO Michael DeGiglio.
