The Week In Cannabis: Federal Drug Decrim, Connecticut, Louisiana, Big M&A Moves

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U.S. House Reps Bonnie Watson Coleman (D-NJ) and Cori Bush (D-MO), in collaboration with the Drug Policy Alliance, introduced the Drug Policy Reform Act (DPRA): a bill seeking to end criminal penalties for drugs possession at the federal level.

The bill contains suggestions for a more “health-centered approach” and proposes reinvestment in alternative approaches, among many other important provisions.  

“Every 23 seconds, a person’s life is ruined for simply possessing drugs,” said Queen Adesuyi, policy manager for National Affairs at the Drug Policy Alliance (DPA). “Drug possession remains the most arrested offense in the United States despite the well-known fact that drug criminalization does nothing to help communities, it ruins them. It tears families apart and causes trauma that can be felt for generations. The drug war has caused mass devastation to Black, Latinx, Indigenous and low-income communities and today we say, ‘Enough is enough!’”

In Maine, lawmakers approved a similar bill to decriminalize all drugs on Friday.

Louisiana Gov. John Bel Edwards signed off on House Bill 652 to decriminalize small amounts of cannabis possession for personal use.

Possession of up to 14 grams will now be categorized as a misdemeanor rather than a felony. Those caught violating the law face up to a $100 fine without jail time.

Connecticut is on the verge of becoming the latest state to legalize marijuana for adult use, after lawmakers finally sent a cannabis reform bill to Gov. Ned Lamont’s desk on Thursday morning, the 50th anniversary of President Richard Nixon’s declaration of the war on drugs.

Gov. Lamont, who previously threatened to veto it over the eleventh-hour amendment, is now expected to sign the bill that will legalize the use and possession of up to 1.5 ounces of cannabis by adults 21 and older as of July 1. However, the launch of commercial cannabis sales is not expected to begin until May 2022.

Cannabis stocks traded down, underperforming general markets. Over the five trading days of this week:

  • The ETFMG Alternative Harvest ETF (NYSE:MJ): lost 7.5%.
  • The AdvisorShares Pure Cannabis ETF (NYSE:YOLO): fell 7.1%.
  • The AdvisorShares Pure US Cannabis ETF (NYSE:MSOS): dropped 6.6%.
  • The Cannabis ETF (NYSE:THCX): was down 5.4%.
  • The Amplify Seymour Cannabis ETF (NYSE:CNBS): tumbled 5.7%.
  • The SPDR S&P 500 ETF Trust (NYSE:SPY) closed the week down 2%.

Benzinga Cannabis’ content is now available in Spanish on El Planteo.

In the business world, cannabis tech firm WM Holding Company, LLC (NASDAQ:MAPS), known for its Weedmaps brand, started trading on the Nasdaq, following a merger with investment management firm Silver Spike Acquisition Corp (NASDAQ:SSPK). 

Southern Glazer’s Wine & Spirits, one of the top 15 alcohol distributors in the U.S. will soon offer Marley CBD beverages and confections, Benzinga learned exclusively ahead of an official announcement.

The deal between cannabis company Docklight Brands and Southern Glazer’s will originally span across 7 states. The latter will leverage its 42 distribution centers, 14.8 million square feet of warehouse space and fleet of more than 2,600 delivery trucks, to make sure Marley CBD products reach as many consumers as possible.

The companies assure more states will be added in the coming months.

Policy, Science, Data And Advocacy

With cannabis being legal in some form in 47 states and with federal legalization just around the corner, the National Cannabis Industry Association (NCIA) released a summary of scientific, historical and medical uses of cannabis designed to inform policymakers and medical professionals.

Rhode Island’s Senate Judiciary Committee approved an adult-use cannabis bill, marking the first time a cannabis proposal of its nature has ever reached the state General Assembly floor.

California is injecting $100 million into the state’s struggling legal cannabis industry.

A new measure, proposed by Gov. Gavin Newsom, was approved by the California Legislature on Monday and aims to help legal cannabis operators acquire permanent licenses.

According to Newsom’s office, about 82% of the state’s legal operators still hold provisional licenses as of April 2021. These provisional licenses are due on Jan. 1, 2022.

Viola cannabis brand, launched by NBA veteran Al Harrington and named after his grandmother, announced on Wednesday that it has a new incubator partner – Mezz Brands.

Financings And M&A

Hydroponics equipment manufacturer Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM) is acquiring Aurora Innovations, Inc., Aurora International, Inc. and Gotham Properties LLC for $161 million.

Cronos Group Inc. (NASDAQ:CRON) (TSX:CRON) is poised to acquire a stake in PharmaCann for approximately $110.4 million. Under the terms of the agreement, a wholly-owned subsidiary of the Toronto-headquartered company has bought an option to obtain a roughly 10.5% ownership stake in PharmaCann on a fully diluted basis.

Columbia Care Inc. (NEO: CCHW) (CSE:CCHW) (OTCQX:CCHWF) (FSE: 3LP) is poised to secure up to $74.5 million in financing through a private placement of 6% secured convertible notes.

The company also announced it is acquiring Medicine Man Denver for an upfront consideration of $42 million, including $8.4 million in cash and $33.6 million in stock. The move comes months after Medicine Man’s termination of a term sheet agreement with Schwazze (OTCQX:SHWZ) last year.

Berlin-headquartered cannabis company Sanity Group has completed a $44.2 million Series A financing round led by Swiss venture capital firm Redalpine, US-based Navy Capital and SOJE Capital. The round was also supported by GMPVC. 

Acquired Sales Corp. (OTCQX:AQSP) intends to purchase all of the ownership interests in the Irvine, California-based Savage Enterprises for $44 million, in a stock and cash deal.

CBD producer Brains Bioceutical Corp. raised $31.9 million through an investment round. DSM Venturing, the corporate venture arm of Royal DSM, a company focused on health, nutrition and sustainable living, was a lead investor.

Cannabis information platform Leafly aims to raise up to$30 million via a securities offering that includes debt, convertible debt and options to acquire securities.

Terra Tech Corp. (OTCQX: TRTC) will monetize its investment in Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM), which would yield gross proceeds of around $40 million. The original investment in Hydrofarm from November 2018 amounted to $5 million.

CBD company Trait Biosciences Inc. reported Wednesday it has raised CA$31 million ($25.46 million) through a Series A financing round led by the corporate venturing unit of British American Tobacco, Btomorrow Ventures and backed by Gotham Green Partners.

Alternative Finance Network (AFN) facilitated a $3.15 million sale-leaseback transaction for an Oregon cultivation property owned by Stem Holdings, Inc. (CSE:STEM) (OTCQX:STMH). 

“This deal truly illustrates the path toward leveling the playing field for all cannabis businesses for equal access to capital and our ability to assist leading cannabis companies in their search for working capital,” AFN founder Scott Jordan told Benzinga. “I have completed over $70 million in transactions for cannabis companies for equipment, real estate and working capital financing and am thrilled to see this low-rate lending environment and continued growth and expansion in the industry.”

Simplifya, a provider of regulatory and operational compliance software for the cannabis industry, has closed a $6 million Series B funding round led by Blue Zone Wealth Advisors.

Power REIT (NYSE-AMEX: PW) bought a 9.35-acre property in Craig County, Oklahoma via its subsidiary PropCo for a total of $2.65 million.

Cirona Labs raised $1.5 millio in an oversubscribed seed round led by LiDestri Food & Drink, BevSource and Sweetener Supply.

“Consumers are interested in CBD infused products, but many…

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