Photographer: Ivan Valencia / Bloomberg
Photographer: Ivan Valencia / Bloomberg
A double dose of good news over the past week has resulted in a rapid response from the marijuana industry multi-state operators are moving to rush their businesses, and fast.
On the morning of January 6, when the results of the Senate race in Georgia turned in favor of the Democrats, and the governor of New York, Andrew Cuomo, proposed to legalize marijuana in his state, Managers of Curaleaf Holdings Inc. suddenly realized that the company could benefit from extra cash. They went to bankers and lawyers around 11:00 and in less than 24 hours the company raised more than $ 200 million offers more shares on the Canadian Stock Exchange.
“It was very unexpected in Georgia. That is why we have pulled the trigger as fast as we can to prepare for what we think will be a very dynamic 2021, ‘said chairman Boris Jordan in a telephone interview.
He expects Curaleaf to want cash for acquisitions as the industry consolidates faster than expected. He also sees that states are under pressure to allow medical and adult use, among other things. nation’s move to the Democratic Party. In New York alone, Jordan said Curaleaf needs to increase the size of a quadruple to meet demand.
The industry is expected to gain momentum this year, but development has moved faster than expected. For now, the The STATES law, which would give states more jurisdiction to set their own marijuana rules, is considered the most likely federal regulation to pass soon – in contrast to the MORE law, which will fully decriminalize cannabis. According to Cowen analyst Vivien Azer, the STATES law could be approved in the second half of 2021 or the first half of 2022.
Jordaan, meanwhile, said he had not previously expected the MORE law to be passed until the next government, but he now thinks it could take place at the end of four-year presidential election Joe Biden.
Cannabis stocks have risen with the better outlook. An industry index rose 16% last week.
Green Thumb Industries Inc., one of the largest US companies multi-state operators, see expansion also accelerating due to recent news, CEO Ben Kovler said in a telephone interview. As the potential access to capital markets will be sooner than expected, Kovler said the company is considering refinancing its current $ 100 million debt, which has an interest rate of 12%.
“We can create an extra $ 100 million from the air by refinancing 6%,” he said. It can then be reinvested in the business and possibly increase the share price. Clearance is also on the agenda. “We hired more than 1,300 people in 2020, and we would expect it to be larger in 2021,” Kovler said.
Green Thumb is also stepping up efforts to register on U.S. wallets, Kovler said. Companies have largely used markets in Canada, rather in the US, where they have been avoided due to concerns about legal risks due to federal bans. But Kovler said opinions on this are changing.
“I do not believe there is a legal issue preventing this,” he said. ‘I think the NYSE and the Nasdaq should list cannabis businesses. Otherwise, it is a massive wealth transfer to Canada. ”
QUOTE OF THE WEEK
“I think that now, after Covid, and with this democratic dominance in the US government, we will start to see a positive movement in the approach to US legalization – and that is something that will support global legalization,” said Oren Shuster, CEO, said. and co-founder of IM Cannabis Corp, said in a telephone interview. IM Cannabis is active in Germany, Israel and Canada.
NUMBER OF THE WEEK
- $ 300 million: the amount of annual tax revenue New York is expected to generate from cannabis use, according to Cowen’s Azer.
WHAT YOU NEED TO KNOW
- Amsterdam wants restricts tourists from its coffee shops that sell marijuana as part of a plan to tackle the flow of hard drugs and organized crime related to the marijuana trade.
- Cuomo sal announces its plan to legalize marijuana as part of the 2021 state.
- A Democratic Senate is seen as lifting the prospects for legal cannabis and speeding up banking approval for the industry.
HAPPENINGS
Monday 1/11
Tuesday 1/12
Thursday 1/14
- Aphria Inc. report second-quarter earnings before the market opens.