Tag: cannabis

High Times acquired by Lucy Scientific in all-stock deal

Lucy Scientific Acquires High Times Intellectual Property, Including Existing Licensing Agreements in All-Stock Transaction

 The Transaction includes international and domestic rights of the brand High Times, Cannabis Cup, and 420.com brands, and its respective domain names

VANCOUVER, British Columbia, September 7, 2023 – Lucy Scientific Discovery Inc. (“Lucy” or “the Company”) (NASDAQ: LSDI), a leading psychotropic innovator announces the acquisition of the intellectual property (IP) of High Times, the most recognizable and iconic brand in the cannabis industry. This acquisition provides a stream of high-margin licensing and royalty income from the well-regarded High Times, Cannabis Cup, and 420.com brands, including their respective domain names. 

Lucy will issue 19.9% of its outstanding stock to High Times and make payments semi-annually for the next 5 years based on EBITDA generated from the acquired IP, which can be settled with either stock or cash at Lucy’s option. Additionally, Lucy will license the right to operate retail stores and manufacture and sell THC products in the United States back to High Times, in return for a license fee of $1.0M per year, increasing to $2.0M per year upon Federal legalization. The transaction is subject to customary closing conditions and is expected to close within two weeks.    

Lucy will be acquiring brand rights with plans to monetize the IP through current and planned royalty agreements by further extending and enhancing the existing domestic and international licensing arrangements currently held by High Times, including consumer products and merchandise. The Company intends to preserve the essence of the High Times, Cannabis Cup, and 420.com brands while identifying new avenues for growth and development. 

The Company expects the acquisition of High Times IP, including, the 18 licensing agreements across various product categories  it will acquire, to add at least $10M of revenue and $5M of EBITDA to its 2024 results and provide a solid foundation of growth as cannabis becomes legal around the world.

Richard Nanula, CEO and Executive Chairman at Lucy Scientific Discovery Inc., commented, “Lucy expects this acquisition to drive high margin revenue quickly and sustainably across the cannabis sector around the world. This is a great opportunity to grow the market presence of the nearly 50 year old High Times brand globally through licensing and online distribution.  We are confident that this opportunity can add significant value for our shareholders.”

Adam Levin, Executive Chairman of High Times added, “Over the past few years, we have been building the consumer products offerings for High Times and there is no better partner than Lucy to drive our iconic brand forward.  This transaction will open up tremendous new opportunities to grow and expand the High Times brand led by Richard Nanula, who has decades of experience with some of the biggest consumer brands and companies in the world. We are delighted to become large Lucy shareholders.” 

About Lucy Scientific Discovery Inc.

Lucy Scientific Discovery Inc. (NASDAQ: LSDI) is a Nasdaq-listed company with holdings and operations in a variety of psychotropic businesses. The company holds a Controlled Drugs and Substances Dealer’s License granted by Health Canada’s Office of Controlled Substances. Lucy Scientific Discovery Inc. and its wholly-owned subsidiary, LSDI Manufacturing Inc., operate under Part J of the Food and Drug Regulations promulgated under the Food and Drugs Act (Canada). This specialized license authorizes LSDI to develop, sell, deliver, and manufacture pharmaceutical-grade active pharmaceutical ingredients (APIs) used in controlled substances and their raw material precursors. With a focus on pioneering innovative therapies for patients in need, Lucy Scientific Discovery Inc. is dedicated to advancing the understanding and applications of psychotropic medicines, improving mental health outcomes, and enhancing well-being for individuals worldwide.

About High Times:

Since its founding 46 years ago, High Times has grown to be one of the world’s most well-known cannabis brands – championing the lifestyle and educating the masses on the benefits of this natural flower. From humble beginnings as a counterculture lifestyle publication, High Times has evolved into growing a network of cannabis dispensaries, the host and creator of events like the Cannabis Cup, the producer of globally distributed merchandise, participant in international licensing deals, and provider of content for a multitude of fans and supporters. In 2020, High Times began acquiring retail dispensaries, for the first time directly touching the plant it had been promoting for over 40 years. Today the brand owns 8 retail stores, as well as several cannabis brands.

Marijuana Cannabis Stocks with the Biggest 5 Year Sales Growth

The following is a lost of stocks in the cannabis and marijuana industry, with their sales growth over the last five years.

The following is a lost of stocks in the cannabis and marijuana industry, with their sales growth over the last five years.

They are listed in increasing order.

CompanySymbolSales Gr past 5 yrs
Scotts Miracle-GroSMG14.5%
Village FarmsVFF17.8%
OrganiGramOGI66.8%
TilrayTLRY98.2%
HexoHEXO131.2%
CronosCRON166.5%
AuroraACB179.4%
Innovative Industrial PropertiesIIPR263.8%

Marijuana Provided Over 4500 Missouri Jobs Last Year

by Fred Fuld III

The cannabis industry is helping out the economy of Missouri.

Last year, marijuana businesses provided over 4,500 jobs throughout the state, all legal of course. These jobs included retail sales clerks, managers, security, and deliverers.

The state has reported that the number of people working in medical marijuana facilities has increased by over 2000% in one year.

Missouri citizens voted to legalize medical cannabis in November of 2018.

It will be interesting to see if the publicly traded marijuana stocks increase the number of employees also, helping out the U.S. economy.

Why You May Have to Sell Some of Your Stocks before Sept. 28

by Fred Fuld III

Some brokerage firms, such as E*TRADE, have sent out notices that they will no longer handle the trading of certain pot stocks and other companies which trade on the Pink Sheets, that are considered “Pink No Information”. This would go into effect on September 28, 2021.

Last year, the SEC came out with a ruling that would prohibit broker-dealers from publishing quotations for an issuer’s security when issuer information is not current and publicly available.

Pink No Information means that the company is unwilling or unable to provide current financial disclosure information. Fortunately, most pink sheet stocks do not fall into this category. As a matter of fact, I could find only one marijuana stock that falls into this category. This could be because the SEC has already suspended over 70 of these stocks in various industries back in February and March of this year. Many of these stocks were involved in “pump and dumps”.

There may be other cannabis stocks that are Pink No Information, but it is hard to tell just from the name of the company, and there are over 250 stocks that I would have to go through. Also, you may want to check your Pink stocks on September 27 to see if they have fallen into this category.

The other two types of Pink Sheet stocks are Pink Current Information and Pink Limited Information. Current means all financial information is up to date. Limited means that the company may be behind in its reporting due to bankruptcy or financial reporting issues. This SEC ruling does not affect stocks in these two categories, at least yet.

Some brokers, such as Firstrade, have said that it also affects Grey Market and Expert Market stocks.

On Tuesday, September 28, 2021, new amendments to Rule 15c2-11 under the Securities Exchange Act of 1934 go into effect that will impact the market for certain over-the-counter (OTC) securities classified as Pink No Information, Grey Market, and Expert Market OTC securities (collectively, “Impacted OTC Securities”).

The Grey Market is for stocks that have been suspended from trading or can be for pre-IPO stocks. The Expert Market is for private transactions between broker dealers and professional investors.

To find out what category your Pink Sheet stocks fall into, or any other OTC stock for that matter, you can enter the stock ticker symbol at OTCMarkets. This site provides information on all over-the-counter and Pink Sheet stocks.

You can also look up all the No Information stocks by going to the Stock Screener at OTCMarket, go to the Markets section at the top and choose Pink No Information.

At the time this is being written, there are 2,391 stocks in the Pink No Information category. There are also 825 Expert Market and 3,270 Grey Market stocks.

You should be aware that you aren’t required to sell these stocks. It’s just that if you ever wanted to sell the stocks, who are you going to sell them to, if all brokers will prohibit the buying of any of these securities. In addition, there won’t be any price quotes for the stocks.

So remember, check your portfolio on September 27 since this goes into effect on September 28. Also, keep in mind that any of the companies on the list may get their filings with the SEC updated by the deadline.

Cannabis Legalized in Five More States, Marijuana Stocks Take Off

by Fred Fuld III

In case you missed some of the propositions in the latest election, five more states have just followed the lead of Colorado, California, and many other states. The legalization of cannabis propositions have all passed. The five states are as follows:

South Dakota – Approved the medicinal use and recreational use of marijuana.

Mississippi – Approved the medical use of marijuana.

Montana – Approved the recreational use of marijuana.

Arizona – Approved the recreational use of marijuana.

New Jersey – Approved the recreational use of marijuana.

So what has this done for the cannabis stocks? It took investors a few days to process (and a few days for most of the votes to come in), but most of the marijuana stocks skyrocketed on Friday.

Here are just a few that got high:

  • Aurora Cannabis (ACB) +56.1%
  • Akerna (KERN)  +32.6%
  • HEXO (HEXO) +23.5%
  • Tilray, Inc. (TLRY) +23.2%
  • Green Organic Dutchman Holdings (TGODF) +20.8%
  • WeedMD Inc. (WDDMF) +19.8%
  • Flower One Holdings Inc. (FLOOF) +18.9%
  • Cronos Group Inc. (CRON) +16.2%
  • Sundial Growers Inc. (SNDL) +13.6%

It will be interesting to see which ones maintain their strength. Some may get higher and higher, others may go up in smoke.

Disclosure: Author didn’t own any of the above at the time the article was written.

 

 

Marijuana Cannabis Stocks that Pay Dividends

by Fred Fuld III

In case you missed the MoneyShow presentation on Marijuana Stocks that Pay Dividends, attached is the slide show from the presentation.

To access the slide show as a pdf file, click on the link below:

Marijuana Stocks that Pay Dividends

None of the stocks mentioned in the presentation are recommendations, just suggestions to do further research.

Disclosure: Author owns IIPR.

High Yield Cannabis Stocks

by Fred Fuld III

During the last twelve months, many of the cannabis stocks, such as (TLRY) and Canopy Growth (CGC), have been hit hard with some stocks, such a Tilray (TLRY) dropping 76% and Canopy Growth (CGC) down 54%. Some investors and traders think that the marijuana stocks may have hit bottom and there may be some buying opportunities.

However, if  you are a relatively conservative investor, you probably want to receive a dividend in return for the risk you are taking. Luckily, there are some cannabis stocks that provide investors with a decent dividend yield.

One example is Scotts Miracle-Gro Company (SMG), which has a couple divisions in the marijuana industry. Its Hawthorne Gardening Company division purchased General Hydroponics which manufactures and sells products for marijuana growers. Scotts has also invested in the hydroponics company AeroGrow International (AERO) which sells products to the small scale grower. Scotts’ current yield is 1.92%. Last August, the company raised its dividend to 58 cents per share, an incense of 5.5% over the previous quarter. The dividend has increased on an annual basis since 2015. The stock has a trailing price to earnings ratio of 15 and a forward PE of 22.

AbbVie Inc. (ABBV) is a seller of Marinol, also known as Dronabinol, a form of tetrahydrocannabinol, one of the main psychoactive ingredients of marijuana. The company has been paying quarterly dividends and has increased the annual dividend every year since 2013. AbbVie’s annual forward dividend yield is 5.77%. The company just raised its dividend to $1.07 per share per quarter, a 9.3% increase. The stock trades at 37 times trailing earnings and 8.5 times forward earnings.

Innovative Industrial Properties Inc. (IIPR), which trades on the New York Stock Exchange,  owns, manages, and leases real estate to state licensed cannabis growing businesses. The company has increased dividend every quarter for the last four quarters, the latest dividend increasing my 28%. The company pays a dividend yield of 4.25%. The stock trades at 62 times trailing earnings and 20 times forward earnings.

Horizons Marijuana Life Sciences Index ETF (HMLSF) is an exchange traded fund that invests in many companies involved in the marijuana industry. It has a yield of 12%, based on its latest quarterly payment of $0.202 per share. The reason why the dividend income is so high is because most of the income comes from fees and interest from securities lending. This ETF’s largest holdings are:

  1. CANOPY GROWTH CORP.   13.42%
  2. CRONOS GROUP INC.   11.01%
  3. GW PHARMACEUTICALS PLC.   10.12%
  4. TILRAY INC.   9.05%
  5. APHRIA INC.   8.98%
  6. AURORA CANNABIS INC.   6.51%
  7. SCOTTS MIRACLE-GRO CO.   6.49%
  8. CHARLOTTES WEB HOLDINGS INC.   6.21%
  9. INNOVATIVE INDUSTRIAL PROPERT.   3.11%
  10. ORGANIGRAM HOLDINGS INC.   2.61%

Altria (MO) is primarily in the tobacco business, as it manufactures and markets cigarettes and smokeless tobacco. The company invested over a billion dollars in Cronos Group (CRON), the Canadian marijuana company. The stock pays a generous yield of 7.0%.

Molson Coors (TAP) is the seventh largest beer maker in the world. The company is in partnership with HEXO (HEXO) to produce cannabis-infused beverages in Canada. Molson Coors yields 4.05%.

Constellation Brands (STZ), which produces and markets beer, wine, and liquor, has a major ownership of shares in the Ontario, Canada based cannabis company Canopy Growth (CGC). Constellation has a dividend yield of 1.56%.

To be blunt about it, here’s the straight dope. Maybe some of these stocks will get high, and give you a smoking portfolio from this budding industry. You may even hit the jack pot. Just make sure you weed out the bad stocks, because if you don’t, your portfolio will take a hit and go up in smoke.

Don’t forget to read:

Exclusive Interview with Chet Billingsley CEO of Mentor Capital on the Marijuana Industry

Is Apple Getting into the Marijuana Industry?

Disclosure: Author owns CGC and IIPR.

Top Cannabis Tax Selling Stocks for a January Bounce

by Fred Fuld III

Many of the cannabis related stocks have been burned during the last year, which makes them possible tax sale opportunities.

A tax selling stock is a stock that is currently selling for a low price due to heavy year-end selling for tax purposes, but was trading at much higher levels earlier in the year.

As the year-end approaches, many investors employ the technique called tax harvesting , which is the selling of loser stocks to offset any gains that may have been established during the year.

With all the heavy selling, the price of the stocks that have had big drops tends to drop far more than what would normally take place during the rest of the year.

So traders and investors are on the lookout for stocks that are heavily hit, hoping for a significant bounce in January, once the tax selling is over.

So if you are looking for these types of stocks, here is a selection of some marijuana stocks that have dropped by over 15% year-to-date, with five of then sinking by more than 50%.

Stock Symbol YTD Return
Aphria APHA -17%
Aurora Cannabis ACB -28%
Cannabis Sativa CBDS -78%
Canopy Growth CGC -28%
Cronos CRON -25%
Hexo HEXO -38%
Mentor Capital MNTR -60%
Sundial Growers SNDL -55%
Terrra Tech TRTC -59%
Tilray TLRY -69%

Hopefully some of these stocks will get high in January.

Disclosure: Author owns CBDS, CGC, MNTR, and has a long option position in ACB.

Top Marijuana Cannabis ETFs

by Fred Fuld III

If you think that marijuana is a growth industry and you aren’t sure which is the best cannabis stock to invest in, you have an alternative. Or maybe you are looking for an easy way to play the tax loss pot stocks.

The alternative is investing or trading a cannabis ETF, of which there are several.

The largest one by market cap and volume is the ETFMG Alternative Harvest ETF (MJ), which also happens to be the oldest, founded in 2015. The ETF has an expense ratio of 0.75% and pays a high yield (no pun intended) of 4.99%. Its two largest holdings are GW Pharmaceuticals (GWPH) and Cronos (CRON).

The other cannabis related ETF that pays a yield is the AdvisorShares Vice ETF (ACT), however, marijuana stocks make up a limited amount of the portfolio as it also invests in alcohol and tobacco companies. It pays a yield of 1.56%.

A purer play is the AdvisorShares Pure Cannabis ETF (YOLO), which was founded this year. Its largest holding is Village Farms International (VFF) and the second largest is Innovative Industrial Properties (IIPR).

The following is a list of all the major cannabis ETFs.

Fund Name Symbol Expense Ratio Yield Founded Largest Holding 2nd Largest Holding
AdvisorShares Pure Cannabis ETF YOLO 0.74% 2019 VFF IIPR
AdvisorShares Vice ETF ACT 0.99% 1.56% 2017 TMO ABT
Amplify Seymour Cannabis ETF CNBS 0.75% 2019 GWPH CGC
Cambria Cannabis ETF TOKE 0.42% 2019 MEDIF GWPH
ETFMG Alternative Harvest ETF MJ 0.75% 4.99% 2015 GWPH CRON
Global X Cannabis ETF POTX 0.50% 2019 GWPH APHA
The Cannabis ETF THCX 0.70% 2019 MEDIF GWPH

Let’s hope your portfolio gets high with one of these ETFs.

Disclosure: Author didn’t own any of the above at the time the article was written.