Small cannabis companies getting ‘squeezed’ in Pennsylvania
Independent medical cannabis operators in Pennsylvania say falling prices and consolidation are taking a toll and are asking regulators for help, per MJBizDaily.
MSOs are preparing for the potential of adult-use legalization by buying up smaller companies. Those that haven’t been acquired are struggling to stay afloat.
“The biggest losers are the mom-and-pops,” said lawyer Steve Schain. “A large, publicly traded multistate operator can survive a long period of time without being profitable, and a stand-alone cannot.”
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HIT THE BREAKS
Cannabis cultivation moratorium could be coming to Michigan
Michigan’s Cannabis Regulatory Agency (CRA) is considering a moratorium on cannabis cultivation, reports WXYZ.
Prices of cannabis flower have decreased by 44% in the state due to a glut of supply.
“The agency has been hearing concerns that the supply of marijuana produced by licensed growers exceeds, or may soon exceed, consumer demand,” said the CRA in a statement. “The concerns include that the wholesale price of flower is lower than the cost of production — or will be when harvests are highest in October.”
Aurora Cannabis goes into the veggie business
Edmonton, Alberta-based Aurora Cannabis has announced it is acquiring 50.1% of Langley, BC vegetable and flower company Bevo Agtech for $45 million, per MJBizDaily.
As part of the deal, Bevo Agtech transform Aurora’s Sky greenhouse into a vegetable-focused facility, and will eventually acquire it should they reach goals.
“The ability to get access to cash flow today is going to be really important for a competitive position going forward to be sustainable long term,” said Aurora’s head of corporate development and strategy, Casey Squires. “The idea that we can do that with these guys, and have that incremental boost, is core to [the deal].”
EU STOCK REVIEW
IIROC clamps down on naked short selling, Tikun Olam gets EU-GMP certified
The Investment Industry Regulatory Organization of Canada is banning short selling, per BusinessCann’s European Cannabis Stocks Review.
The practice, which involves essentially betting against the success of a company by borrowing shares, selling them and then hoping to buy them at a lower price, has been blamed for poor-performing cannabis stocks.
In other news, Israel’s Tikun Olam was EU-GMP certified in Germany for cannabis production, export and marketing. As a result, its stock price rose by 30%.
The news is “the company’s most important strategic move to date and is a true breakthrough for our company and the entire Israeli cannabis industry,” said CEO Avinoam Sapir.
See the full rundown here.