Cannabis Day: Canopy Growth Corp, Aurora Cannabis Inc, Liberty Health Sciences, MedMen Enterprises, FSD Pharma

Canopy Growth Corp (TSE:WEED) (NYSE:CGC) (FRA:11L1) kicks off the cannabis industry news day with its announced acquisition of Lesotho (pronounced LAY-soo-too) based Daddy Cann Lesotho PTY Ltd., a cannabis producer in the tiny African nation that is surrounded by South Africa.

This is the third time a Canadian LP has established a partnership within the country, with Aphria and Supreme Cannabis Company both holding assets there.

“Lesotho is Canopy Growth’s first step into Africa and we look forward to working with the strong local team at Highlands to establish production and distribution capabilities consistent with Canopy’s global standard for high-quality, regulated medical cannabis products,” said Mark Zekulin, President, Canopy Growth.

Bruce Linton alluded to the interest in Africa during an exclusive interview on Midas Letter LIVE!, saying “Southern Africa I think is going to be interesting and you know we cover off on a bunch of places. Asia at large and China specifically obviously there’s a lot of hemp.”

The company does business under the trade name “Highlands” and puts Canopy now on 5 continents.

Aurora Cannabis Rolls Out New Cannabis Products

Aurora Cannabis Inc (TSE:ACB) (OTCQB:ACBFF) (FRA:21P) said today they were bringing a  whole new product offering to market that focused on extremely high-THC potency dried flower. At 35% THC content, Aurora Frost promises customers who seek extreme concentration of THC and its effects an experience that is tantamount to the most potent marijuana available in natural form.

According to the company’s press release, “Aurora Frost products are produced from premium whole flower. The products, generally known throughout the industry as kief, consist primarily of trichomes, the resinous glands rich in active pharmaceutical ingredients, including terpenes, flavonoids, and cannabinoids, such as THC and CBD.

“Successfully developing a proprietary, fine trimming and GMP compliant technology needed to produce these high-quality products at commercial scale, provides us with are markable advantage in addressing this niche of the cannabis market,”said TerryBooth, CEO. “Aurora now makes this high potency medical cannabis available to its patients, reflecting the Aurora Standard of innovation and patient care.”

Liberty Health Sciences partners with Isodiol

Liberty Health Sciences Inc. (CSE:LHS) (OTCQX:LHSIF) announced it was teaming up with Isodiol International Inc (CNSX:ISOL) (OTCMKTS:ISOLF) (FRA:LB6A) to offer Isodiol’s medical cannabis products to Liberty Healgth’s patients in Florida and Massachusetts.

    • The agreement with Isodiol allows Liberty to license and produce the

 

    following products:

  • Isodiol’s BIOACTIVE CBD
  • Isodiol’s CannaCeuticals
  • Isodiol’s IsoDerm
  • Isodiol’s IsoSport products
  • Isodiol’s Rapid Cream
  • Isodiol’s Rapid Patch
  • Isodiol’s Pot-O-Coffee

“Isodiol is excited to partner with a company that is equally committed to bring health and wellness to consumers around the globe,” said CEO of Isodiol, Marcos Agramont.

“Florida and Massachusetts will further expand the marketplace for Isodiol and we look forward to establishing a long-term partnership with Liberty with further expansion down the road.”

Midas Letter’s Ben Smith covered Isodiol in depth in April this year here.

Quinsam Capital Reports Earnings of $0.05 per share

Quinsam Capital Corporation (CNSX:QCA) (FRA:0Q4), the hybrid investment issuer overseen by Bay Street veteran Roger Dent, has published Q1 financials that are impressive, to say the least.

The company announced net income of $4.9 million ($0.05 per
share) in Q1/2018 versus $0.00 per share in Q1/2017, which represents an “extremely
strong return on the company’s assets”, according to the press release.

It goes on to predict a “strong” quarter for Q2, noting, “the company’s
$875,000 investment in Dosecann Inc. completed in January 2018 has triggered
significant appreciation due to the acquisition of Dosecann Inc. by Cannabis Wheaton
Income Corp. at a price which was over twice our effective cost. We have also seen
gains on listings by Xanthic Biopharma Inc., Empower Clinics Inc. and Khiron Life Sciences Corp. One of our larger investments (in C21 Investments Inc.) is expected to be trading before the end of the quarter.

MedMen Enterprises Sets Sail on the CSE

MedMen Enterprises Inc (CNSX:MMEN) launched itself on the Canadian Securities Exchange at a valuation somewhere in the neighbourhood of $2.2 billion, and traded 1,726,715 shares closing the day at $4.95 a share, down ~12 percent from its opening price of $5.62.

The company’s outsize valuation is complicated for retail investors who will be putting money into a company that is effectively controlled by the two founders, with a share structure that subordinates all equity investors in Class B shares to the “super voting” shares of Adam Bierman and Andrew Modlin, who started the company 8 years ago.

The company’s stores are often compared to Apple’s iconic stores, and are known for the positive, hip and friendly environment targeting a wider swath of the cannabis curious population who seek a more refined retail experience.

FSD Pharma Launches with 1.3 Billion share monster

FSD Pharma Inc (CNSX:HUGE) also saw its first day of trading in a share structure that is, well, just like its trading symbol: Huge. There are over 1.3 billion Class B Subordinate shares which means they are in effect, of no consequence in any vote against the 15,000 Class A voting shares, each of which have 276,660 votes for a total of 4,149,900,000 votes.

The structure is hugely disadvantageous to holders of the Class B Subordinate shares, which are the only shares trading and available to the public. That did not, however, stop FSD Pharma from trading 113,136,361 shares in volume, and closing 29.4 percent lower than its opening price of $0.17 a share on its first day. The stock closed at $0.12 a share.

In my opinion, participating in a publicly traded entity that is effectively controlled by a minority group is extremely risky, since there is no mechanism to vote down any measure that might be in service of the interests of the minority group, and against the interests of the larger one.

That these structures are permitted to be called “public” companies, is, in my view, a regulatory shortfall.

How can you protect your interest if your vote doesn’t matter?

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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