Harvest Health & Recreation buys MJardin cultivation facility as MediPharm receives license amendment
In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back at the sale of a cultivation facility, the receipt of a license amendment and analyst views.
MJARDIN TO SELL CULTIVATION FACILITY TO HARVEST: MJardin Group (MJARF) announced Thursday that it has entered into a definitive agreement with Harvest DCP of Nevada, a division of Harvest Health and Recreation (HRVSF) to sell all of its interest in GreenMart of Nevada. Harvest will buy Greenmart, which possesses a Nevada marijuana cultivation facility license and operates the cultivation facility in Cheyenne, for a total consideration of $35M in cash. Mjardin will use the proceeds of the transaction to reduce its debt obligations and for working capital requirements for its 2020 plan.
MEDIPHARM RECEIVES LICENSE AMENDMENT: MediPharm Labs (MEDIF) announced Monday that its subsidiary, MediPharm Labs, received a license amendment from Health Canada allowing for production to begin in the recently expanded area of its specialized manufacturing facility in Barrie, Ontario. The amendment increases MediPharm's licensed facility footprint by around three times to a total of approximately 25,000 sq. ft., allowing it to use more of its manufacturing space for cannabis activities. The expanded facility will enable MediPharm to directly increase its GMP capacity for the international medical market. Further, it said the expanded facility will immediately allow MediPharm to produce greater quantities of GMP product, as it can now move non-GMP activities, such as vape pen filling, into its newly licensed area.
GREEN THUMB LAUNCHES ADULT-USE SALES IN ILLINOIS: Green Thumb Industries (GTBIF) announced Thursday that it opened its 40th store, Rise Joliet, the first adult-use only store in Illinois. GTI has six open stores in the state including The Clinic Effingham and 3C Naperville, which will currently only offer sales to customers with a valid Illinois medical marijuana card. The Clinic Effingham is expected to begin adult-use sales later in January pending a special use permit hearing. Naperville will hold a non-binding voter referendum on adult-use sales in March, and until then the store will only be open to registered medical patients. Rise Quincy will be an adult-use store and is expected to open within several days pending final actions by the state.
ANALYST SAYS PELTZ NEEDS TO URGE DISCIPLINE AT AURORA: Cantor Fitzgerald analyst Pablo Zuanic said on Thursday he thinks it is time for Nelson Peltz, who is being paid as a consultant at Aurora Cannabis (ACB), to call for the same type of greater financial discipline at the company that the shareholder activist previously advocated for at companies like Heinz (KHC), PepsiCo (PEP) and Mondelez (MDLZ). Zuanic, who thinks Aurora's below-peer valuation reflects no optionality from the entry of a consumer packaged goods investor or from the increased financial discipline a new CEO could bring, kept an Overweight rating on the shares, though he lowered his price target to C$5.00 from C$5.85.
ZYNERBA ASSUMED WITH BUY: Roth Capital analyst Scott Henry assumed coverage of Zynerba (ZYNE) on Tuesday with a Buy rating and $12 price target, saying the company is an emerging pharmaceutical company focused on cannabinoids. The analyst highlighted the company's four key program approaching either clinical readouts or FDA meetings in first half 2020, and believes expectations are low, creating a compelling risk/reward for investors.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Aleafia (ALEAF), Aphria (APHA), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), Delta 9 (VRNDF), DionyMed Brands (DYMEF), Elixinol Global (ELLXF), General Cannabis (CANN), Greenlane (GNLN), GrowGeneration (GRWG), Harborside (HSDEF), Hemp Inc. (HEMP), Hexo (HEXO), India Globalization Capital (IGC), Indiva (NDVAF), ICC International Cannabis (WLDCF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MedMen Enterprises (MMNFF), Organigram (OGI), Origin House (ORHOF), Planet 13 Holdings (PLNHF), Real Brands (RLBD), Sproutly (SRUTF), Sunniva (SNNVF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Vireo Health (VREOF), Wayland Group (MRRCF), WeedMD (WDDMF) and Westleaf (WSLFF).