Below is a brief excerpt from a complimentary research note written by our Cannabis analysts Howard Penney and Daniel Biolsi. We are pleased to announce our new Sector Pro Product Consumables Pro. Click HERE to learn more.
We now have three large cannabis companies (GTBIF, CGC, & TCNNF) with nearly billion-dollar shelf offerings.
All three companies are also very close and actively involved in the new formation of the USCC (U.S. Cannabis Council), a nonprofit organization that "aims to advance social equity and racial justice and end federal cannabis prohibition."
This group was formed in early February, just a few short days (maybe hours) after meeting three top Democrats. The coalition brings several major North American cannabis industry stakeholders together to convince policymakers in Washington D.C. to bring about legalization.
Last night after the close, CGC filed a $2.0 billion shelf offering. The question we are asking is, why do they need the money? The Transaction with Acreage to enter the USA is for a predetermined ratio for the stock, so no cash is needed?
STZ has $5.0 billion of warrant that can be converted for cash, but STZ does not have that much cash on the balance sheet. One can conclude that CGC believes that we are close to having a deal in Washington for them to enter the USA.
This means that they might be looking at another US company to buy, as the Acreage assets are marginal at best. TRSSF is the logical pick, given they currently own 20% of the company.
Another interesting story came out yesterday about Washington insiders buying stock. Congressman John Yarmuth (D-KY), the chairman of the Budget Committee, has recently purchased several cannabis industry stocks while championing legalization legislation that could increase their value.
According to a filing with the Clerk of the House Representatives, obtained by website Popular Information through CongressTrading.com, Yarmuth purchased three cannabis industry stocks on November 5: Canopy Growth Corporation, Aurora Cannabis, and Tilray.
The law only requires Yarmuth to report the range of the purchase price. The Congressman purchased between $1,000 and $15,000 of each stock.
New disclosures filed on February 19, Yarmuth reported he purchased an additional $1,000 to $15,000 shares of each of the three stocks — Canopy Growth Corporation, Aurora Cannabis, and Tilray — on February 12.
On December 3, Yarmuth promoted his cosponsorship of the (MORE) Act, which would decriminalize and deschedule cannabis in the United States.
The formation of a new lobbying group, billion-dollar shelf filings, and washing insiders buying cannabis stocks all feel like we are about to experience a seismic shift in Cannabis Reform in DC.