Welcome to The Fresh Toast‘s weekly marijuana investor roundup, where you will find the latest news on what is happening in the fast-moving cannabusiness space. Let’s find out what happened this week:
Overall the publicly-listed cannabis industry has ended the week in the red, down roughly seven percent as measured by the Solactive North American Medical Marijuana Index. Although the broader market for cannabis-related stocks has slid, there were a handful of noteworthy developments.
Canadian Cannabis IPO A “Bust”
In recent weeks, a handful of cannabis-related companies have launched share publicly with varying degrees of success. As reported by Business Insider, one of the largest ever initial public offerings (IPOs) of a pot stock was a “bust.”
MedReleaf (TSX:LEAF) debuted on the Toronto Stock Exchange (TSX) on Wednesday morning, plunging 28 percent. Having raised $100 million CAD at a valuation of $900 million CAD, shares were initially set at $9.50. After sliding as low as $6.81 per share, MedReleaf is still trading below $9 per share at the time of writing.
Colorado Cannabis Security Company Acquired
Given the fact that the marijuana industry is still largely cash-based, there is a huge need for cash and product handling/logistics. As banks come around to serving the cannabis community, the need for cash handling services is expected to diminish. With that said, the need for armored cannabis product logistics is not likely to decrease anytime soon. According to Cannabis Benchmarks’ recent marijuana pricing report, the going rate per pound of cannabis is over $1,500 making it one of the most valuable crops out there next to Saffron.
One of the largest providers of lighting and cultivation solutions for the cannabis industry, Helix TCS, Inc. (OTC:HLIX), announced the acquisition of Security Grade Protective Services, Ltd. Security Grade is a Denver, CO based security firm that provides a full suite of solutions for the legal cannabis industry.
Medical Marijuana ETF Going Recreational
Back in March, my beginners’ guide to investing in the cannabis industry mentioned that there was not yet an exchange-traded fund (ETF) to give investors basket-style exposure to multiple cannabis-related companies. As of April, that’s no longer the case! Horizons ETFs Management launched an ETF based on the Solactive index mentioned above, giving investors an easy way to invest in the marijuana industry without having to pick out individual winners.
In anticipation of Canada’s recreational marijuana legalization, Horizons ETFs has decided to cut the word “medical” out of its fund name. The fund will be renamed the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) late next week.
Overall, it was a quiet week in the cannabis world when compared to James Comey’s congressional testimony. While on the topic of political developments, it’s worth noting that the House of Representatives passed the Financial Choice Act earlier this week.
The Financial Choice Act affects the overall investment universe, since it repeals Dodd-Frank. Dodd-Frank was a humongous set of Wall Street regulations that Obama passed after the ‘08 housing crisis aimed at protecting investors and minimizing systemic risk (think dominoes on an international scale).
That’s all for this week’s marijuana business roll-up. Be sure to follow and subscribe so you never miss an important cannabis business update!