Photographer: Ivan Valencia / Bloomberg
Photographer: Ivan Valencia / Bloomberg
A double dose of good news last week provoked a quick response from the marijuana industry many-state operators moving to intensify their business and fast.
On the morning of January 6, when the results of the Georgia Senate race turned in favor of Democrats and New York Governor Andrew Cuomo proposed legalizing marijuana in his state, The directors of Curaleaf Holdings Inc. they suddenly 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 raised more than $ 200 million by the time offering more shares on the Canadian stock exchange.
“It was very unexpected in Georgia. That’s why we pulled the trigger as fast as we could to prepare for what we believe will be a dynamic 2021 year, “President Boris Jordan said in a telephone interview.
He anticipates that Curaleaf will want money for acquisitions, as the industry is consolidating faster than expected. He also sees states under greater pressure to allow medical and adult use after the transition of the nation to the democratic party. In New York alone, Jordan said Curaleaf must quadruple in size to meet demand.
Although the industry was expected to gain momentum this year, developments were moving faster than expected. For now, The STATES Act, which would give states more legal authority to set their own rules on marijuana, is seen as the most likely federal regulation to be adopted soon – as opposed to MORE Act, which would completely decriminalize cannabis. The STATES act could be approved either in the second half of 2021 or in the first half of 2022, according to Cowen analyst Vivien Azerbaijani.
Jordan, meanwhile, said he did not expect the MORE Act to be passed until the next administration, but now he believes it could happen by the end of President Joe Biden’s four-year term.
Cannabis stocks have risen from a brighter perspective. An industry index rose 16% last week.
Green Thumb Industries Inc., one of the largest in the United States many-State operators also believe the expansion is accelerating due to recent news, CEO Ben Kovler said in a telephone interview. With potential access to capital markets earlier than expected, Kovler said the company is considering refinancing its current $ 100 million debt, which has an interest rate of 12%.
“We could create an additional $ 100 million in air by underfunding at 6%,” he said. This could then be invested back into the business and potentially increase the share price. The staff is also on the agenda. “We have hired over 1,300 people in 2020 and we expect this to be higher in 2021,” Kovler said.
The Green Thumb is also stepping up its efforts to register on U.S. stock exchanges, Kovler said. Companies have largely exploited markets in Canada, rather than the United States, where they have been shunned by concerns about legal risks due to the federal ban. But Kovler said opinions were changing.
“I don’t think there is a legal issue that prevents this,” he said. “I think the NYSE and the Nasdaq should list the cannabis companies. Otherwise, it is a massive transfer of wealth to Canada. “
QUOTE OF THE WEEK
“I think now, after Covid, and with this democratic dominance in the US government, we will start to see positive moves in the approach to US legalization – and this is something that will support global legalization,” said Oren Shuster, CEO and co-founder of IM Cannabis Corp., said in a telephone interview. IM Cannabis operates in Germany, Israel and Canada.
WEEK NUMBER
- $ 300 million: the amount of annualized tax revenue that New York could generate from recreational cannabis use, according to Cowen’s Azerbaijani.
WHAT YOU NEED TO KNOW
- Amsterdam wants restricts tourists from its cafes selling cannabis as part of a plan to address the flow of hard drugs and organized crime related to the marijuana trade.
- Cuomo will do it announces its plan to legalize marijuana as part of the state in 2021.
- A Democratic Senate is seen as. raising the prospects for legal cannabis and accelerating bank approval for industry.
event
Monday 1/11
Tuesday 1/12
Thursday 1/14
- Aphria Inc. reports second quarter earnings before the market opens.