The Talking Hedge

Weed Talk News is a weekly Cannabis news roundup published every Friday delivering the most current cannabis events with high visibility news contributors from Illinois, Michigan, Vermont, New Jersey, New York, Washington, DC, Canada, Boston, and more! Anchored by Emmy winning talk show host Jimmy Young, founder of Pro Cannabis Media.

Episode 908 The #TalkingHedge discusses state news topics with Pro Cannabis Media......

https://youtu.be/ivQ4D2sC5Bo

A positive historical relationship exists between cannabis stock prices and the percentage of stock used in M&A deals. 

Recently the percentage of stocks considered during an M&A process have ebbed & flowed with the stock market. Over the last six months,70%+ chose to use equity, an indication of what's believed to be an emerging trend of higher stock components.

A counterintuitive trend is emerging with increased equity issuances given the fact that cannabis stocks are now at multi-year lows.

Viridian Capital Advisors believe several factors are driving this upward trend:

Target companies are increasingly looking at the stock merger consideration as an attractive investment.

There is also a trend towards larger public deals.

The valuation gap is another critical consideration. It doesn’t matter that the stock price is lower as long as the price of target company's stock (or private company) is lower. It is not the absolute value; it’s the gap.

Finally, we believe that smaller companies increasingly find it more advantageous to combine with larger companies to achieve economies of scale and lower capital costs. 

Episode 907 The #TalkingHedge looks at Viridian Capital Advisors' Chart of the Week......

https://youtu.be/xN6Melk-IAM

Michael Burwick and Nick Richards of Greenspoon Marder law firm discuss cannabis law and the benefits of section 453, which could dwarf the impact of 280E.

Episode 906 of The #TalkingHedge with Pro Cannabis Media...

https://youtu.be/MSnD2cBglZI

Cannapreneur Partners is building a vertically integrated cannabis company that will be focused on servicing the rapidly emerging east coast market.

Cannapreneur Partners mission is to strategically lead and elevate purpose driven entrepreneurs to create a global impact in their industry. Created by Michael Scott, Cannapreneur Partners will be launching their next venture to connect the industries leading Cannabis entrepreneurs with strategic leadership and capital.

Cannapreneur Partners leads and elevates purpose-driven entrepreneurs to create a global impact in their industry. It has a proven track record of helping entrepreneurs attain success and guiding investors to thoughtfully place capital in the cannabis space

Summary:

TraderExpo in Vegas

Private Equity vs IPO

Banking VS Federal Legalization

MSOs

Regional vs national expansion

Limited license state appeal

Cost of capital

Pot stocks

Massachusetts by the #'s

Tourists products vs local favorites

Cannabis' investor appeal

Crystal ball predictions 

The #TalkingHedge interviews Todd Sullivan of Cannapreneur Partners ...

https://youtu.be/k22fElJ1iiA

Puerto Rico has a thriving medical cannabis program because of the combined efforts of government, advocates and industry professionals who created a legal framework to provide the island’s 3.2 million citizens a new option for managing their health and wellness.

Puerto Rico is a U.S. territory and Puerto Ricans are American citizens but don’t have congressional representation and do not vote in federal elections. And since there can be no taxation without representation, Puerto Rico does not pay U.S. Federal taxes​.

Puerto Rico tax benefits for crypto should be on your radar as well as Act 60, “The Individual Investors Act”. The gains in both your stock & crypto portfolios are considered Puerto Rican sourced income and taxed at a 0% capital gains rate.

Puerto Rico has been working hard to bring new businesses and high net worth individuals to the island, and as a territory, they’re offering tax deals to US citizens that can’t be matched by any foreign country. 

Episode 904 The #TalkingHedge dives into Marijuana Venture’s article...

https://youtu.be/ZfLdCHoaosw

Federal prohibition prevents the US Department of Labor’s Bureau of Labor Statistics from counting state-legal marijuana jobs. 

The 2022 Leafly Jobs Report found 428,059 full-time equivalent jobs supported by legal cannabis as of January 2022. Last year, the cannabis industry created an average of 280 new jobs per day. 

That’s a 33% increase in jobs in a single year. And it marks the fifth year in a row of annual jobs growth greater than 27%. 

Those 428,059 jobs include direct cannabis jobs like cultivation and retail sales—what are often called “plant-touching jobs”—as well as indirect ancillary jobs that serve licensed companies or depend on legal cannabis sales. 

Episode 903 The #TalkingHedge looks at Leafly's report...

https://youtu.be/S2TmI7HqtJ0

Analyst are expecting revenues for the large MSOs to continue to decline, causing a sharp reduction in their EBITDA estimates for Curaleaf (CSE: CURA) and TerrAscend (CSE: TER) and moderate decreases for AYR (CSE: AYR.A), Cresco (CSE: CL), and Jushi (CSE: JUSHF). Estimates for Columbia Care (CSE: CCHW) and GTI (CSE: GTII) are virtually unchanged, and Verano and Trulieve estimates are higher.

Earnings revisions have had little impact on relative performance. Curaleaf, with the most significant downward revisions, actually outperformed Trulieve with the most significant upward revisions.

M&A activity had a significant impact on some of these revisions. Trulieve and Verano completed $1.5B  and $630M, respectively, in acquisitions over the period. But even some major acquirers had their EBITDA revised downward sharply. For example, AYR completed $1.0B in acquisitions, and analysts have revised their 2022 EBITDA projections downward by 8%.

The missing link is margins.

All the companies, except for Curaleaf and TerrAscend, have higher 2022 revenue projections than they did a year ago. Still, every company except Verano (data not available) has lower EBITDA margin estimates for 2022 than they did a year ago. These lower margins more than offset higher projected revenues.

What happened to margin expectations? 

Our guess is that the sell-side equity analysts were just a bit too optimistic and have been forced to rein in their expectations.

Episode 902 The #TalkingHedge looks at Viridian Capital Advisors’ report...

https://youtu.be/uR5WSUQ-YGA

Marijuana legalization through state legislatures heated up in 2021, and that trend likely will continue this year as lawmakers in several states are expected to legalize either recreational or medical cannabis.

The Northeast and mid-Atlantic states are in the spotlight for adult-use marijuana legislative activity, with Rhode Island the top candidate to approve a regulated commercial market, according to industry experts.

Meanwhile, industry officials and advocates are closing monitoring recreational and medical marijuana legalization efforts in other states across the country. 

The expected activity this year follows a strong 2021, when lawmakers in Connecticut, New Mexico, New York and Virginia legalized recreational marijuana markets that eventually are expected to generate more than $4.5 billion combined in annual revenue.

Episode 901 The #TalkingHedge dives into MJ Biz Daily’s article...

https://youtu.be/SVUg802H7ic

Flora Growth (NASDAQ:FLGC), the first plant-touching cannabis company to list as a direct IPO on Nasdaq, operations are set up in Colombia. 

Advantages of Colombia, cost-effectiveness and experience with growing and exporting commodities. Plans for regional and global expansion. Various barriers of entry across sectors and regions.

Interview Outline:

*Acquisition of #JustCBD

*The importance of distribution 

*Building a team during the #GreatResignation

*Capital market challenges & opportunities 

*Value via new emerging markets or distressed assets?

*Stocks prices post Federal Legalization

*Expanding into the U.S. via Mexico from Colombia

*CBD dietary supplements & the FDA

*Global expansion into U.K. and Europe 

*How R&D impacts revenue streams

Episode 900 The #TalkingHedge talks to Luis Merchan CEO at Flora Growth...

https://youtu.be/pOogDbuO7E4

 

British Columbia reached over $550 million in cannabis sales in 2021, the market clearly shows upward growth. With that being said, British Columbia presents unique challenges for both retailers and brands to succeed.

Being a retail operator in any industry is hard work, but the cannabis industry surely presents additional challenges. And finding success in cannabis often means discovering creative ways to overcome these challenges with limited time and resources. 

For example, Canadian retailers will be familiar with the Cannabis Act and the promotional limitations that it brings. This includes prohibiting inducements or loyalty programs, which can make it quite difficult for retailers to leverage traditional marketing tactics to set themselves apart from competitors.

Understanding the value of brand partnerships and how they support creative marketing solutions has become more important than ever for BC retailers - including measuring how effective data solutions can help retail businesses succeed.

Episode 899 The #TalkingHedge looks at Headset’s report…

#CannabisIndustry #CannabisData #MarijuanaData #CannabisAnalytics #MarijuanaAnalytics #CannabisSalesData #MarijuanaSalesData

https://youtu.be/cIAn_5ouJBc