Texas legalizes hemp cultivation
Texas legalizes hemp and CBD processing, poised to take advantage of U.S. cultivation demand
Texas became the 43rd state in the U.S. to legalize hemp after Governor Greg Abbott signed Texas House Bill 1325 into law on Monday. The bill effectively legalizes the cultivation and processing of hemp and hemp-derived products, including CBD in the state. Shares of TSX-listed Village Farms International got a brief bump in early Tuesday trading following the news but those gains were later erased. The company is converting half of its 1.3-million-square-foot Texas greenhouse for cultivation of high-CBD hemp and CBD extraction. Texas, which is one of the biggest agricultural states in the U.S., is now poised to take advantage of the massive interest in hemp, which is believed to be worth US$16 billion by 2025, according to Cowen & Co.
Ottawa asks U.S. to keep an eye on cannabis pardons at border
Public Safety Minister Ralph Goodale asked acting U.S. secretary of homeland security Kevin McAleenan to carefully note Canadians that have been pardoned for cannabis possession crimes at border crossings during a meeting in Washington this week, The Canadian Press reports. The request comes ahead of a Parliamentary bill presently under consideration that would ease the pardon process for those convicted of smaller possession charges now that Canada has legalized recreational use. The RCMP has warned Canadians convicted of cannabis-related offences that they could still be refused entry to the U.S., even if they have been granted pardons in Canada, CP notes.
Canopy Growth eyes profitability for Canadian operations within next 18 months: Incoming CFO
How exactly does the world’s biggest cannabis company plan to be profitable? Bloomberg spoke to Canopy Growth’s incoming CFO Mike Lee who said he is assessing ways to raise non-equity financing while ensuring its Canadian business can be steered to profitability, hopefully within the next 18 months. “We’re very clear that when it comes to Canada as a stand-alone business that we expect to be EBITDA-positive in the next 18 months,” said Lee. However, Canopy as a whole will likely generate negative EBITDA for the “foreseeable future.” Canopy is scheduled to report earnings on June 20.
Cresco close to closing Origin House deal, but U.S. antitrust officials seek additional disclosure
Cresco Labs is getting closer to closing its $1.1 billion acquisition of Origin House but it’s still not a done deal just yet. Origin House held a special meeting on Tuesday where shareholders overwhelmingly voted in favour of being acquired by Cresco Labs. However, Origin House said in a statement that the company was required to file a notification to U.S. antitrust authorities in accordance with the U.S. antitrust laws. As well, both companies received a request for additional information from the U.S. Department of Justice’s antitrust division, but didn’t specify what information it needed to provide. The waiting period for U.S. authorities to approve the deal was extended by 30 days, Origin House said. Shares of Origin House fell about 4 per cent immediately after disclosing the additional waiting period time.
Valens triples original extraction supply deal with Tilray ahead of edibles legalization
Valens GroWorks is doubling down on its supply deal with Canadian cannabis producer Tilray. The cannabis processing company will now provide Tilray with extraction for 60,000 kilograms of dried cannabis and hemp biomass, up 300 per cent from its original commitment it made in February. As well, Valens may provide contract manufacturing services for tincture bottles and gel caps for Tilray. The deal comes amid a broad move for cannabis producers to ensure they have enough marijuana extracted supply to handle the expected demand over the next year when edibles and other alternative cannabis products are expected to be made legal for sale in Canada.
-- The amount of cannabis private retail sales in Canada in May, up by 37 per cent from April, according to Cova Software, which provides point-of-sale services for North American cannabis retailers. Cova obtained its sales figures from tracking 219 private Canadian cannabis stores in operation, up from 177 stores the company tracked in April. The data does not include government-run cannabis stores.
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