Canadian Cannabis Producer Launches IPO
One of the largest medical cannabis producers in Canada, Tilray, a subsidiary of Privateer Holdings, has announced its launch of an initial public offering (IPO) on Monday, July 9. This move occurred shortly after the company applied to appear on the United States’ Nasdaq Global Select Market on July 20. In the announcement, the company made the term details public. “Tilray is offering 9,000,000 shares of Class 2 common stock at an initial price to the public between US$14.00 and US$16.00 per share (approximately CAD$18.40 to CAD$21.00 per share),” the press release stated. “Tilray intends to grant the underwriters a 30-day over-allotment option to purchase up to 1,350,000 additional shares.” Additionally, a preliminary prospectus has been filed to protect “purchasers” from being “subject to restrictions on resale . . . ” Tilray is expected to appear with the ticker “TLRY” and will join large cannabis companies Cronos (CRON) and Canopy Growth Corp. (CGC) on Nasdaq.
Massachusetts Awards First Dispensary with License
The first recreational cannabis dispensary in Massachusetts received a provisional permit from the Massachusetts Cannabis Control Commission on July 2. Some commission members expressed that there is no rush to open up dispensaries. “There is no legislative mandate that pot stores were going to be open on July 1, and we’re doing this the right way, and we’re going to get it right,” Steve Hoffman of the Cannabis Control Commission said. The business, Cultivate located in Leicester, must finish up final inspections and background checks before it can begin operation. The same company also plans to cultivate and process cannabis. As of early July, 32 companies applied for 63 licenses in operation, cultivation, research, manufacturing, transportation and retail cannabis facilities. The Boston Globe reported that impatience is growing due to the slow rollout as state residents are excited to begin the program.
Corona Beer Company Gains $700M in Market Value
Constellation Brands Inc., the owner of Corona beer and Robert Mondavi wine, reported a $700 million gain in market value shortly after announcing its investment into the cannabis industry. Excitement is brewing, with Canada’s recreational cannabis market set to begin on Oct. 17. Last October, Constellation Brands paid C$245million ($186 million USD) for a nearly 10 percent stake in Canopy Growth Corp. Canopy Growth plans on developing a cannabis-infused beverage for the commercial market. “In Q1 we recognized an additional $258 million pre-tax unrealized gain from the change in fair value of the Canopy Growth investment and warrants, bringing the total pre-tax gain on this investment to over $700 million,” stated David Eric Klein, chief financial officer of Constellation Brands. Other U.S. beer companies are interested in the Canadian market as well, including Molson Coors Brewing Co.
Luxembourg Legalizes Medical Cannabis
The geographically-small 98.6-square-mile European nation of Luxembourg legalized medical cannabis, The Luxembourg Times announced June 29. Under Luxembourg’s draft law, pharmacies in four hospitals will dispense medical cannabis-based medicines, originating from Canada. Patients living with cancer, Multiple Sclerosis and neurodegenerative diseases will be eligible to receive a prescription from any general practitioner. “I am pleased that the House has agreed with the bill to legalize access to cannabis for medical purposes,” Health Minister Lydia Mutsch stated. “The medical use of cannabis is an important step in our efforts to reduce the pain and suffering of some patients, where usual treatments do not allow it or more.” A handful of MPs suggested adding more qualifying conditions to the list, including HIV. The draft law will be reviewed in two years, so that lawmakers can judge how well the program is working.
Arizona Dispensaries Ignore Court Ruling Banning Cannabis Extracts
The Arizona Court of Appeals dished out a controversial ruling on June 26, ruling that cannabis extracts are not covered by the state’s medical cannabis program. Business owners in the state are ignoring the ruling, however, and are continuing to sell extracts. The Arizona Department of Health Services issued a statement indicating that it hasn’t arrived at a final decision about whether to allow extracts. “This case arose from a criminal matter and does not directly affect the Department or direct the Department to make any changes to its rules,” a press statement from The Arizona Department of Health Services read. “However, criminal law does take precedence over Department rules. If you need legal advice to determine what products are impacted by this case, you should contact an attorney.” The Arizona Medical Marijuana Act allows for “any mixture or preparation thereof,” but the recent court ruling claims that it only protects edibles.