Canada is set to make history this week by considering legislation to become the first G-7 country to legalize recreational cannabis.
This development has captured the attention of the market and many investors are focusing on companies levered to this opportunity. We want to highlight three companies that investors should be closely monitored.
Canabo Announces Groundbreaking Results
On Friday, Canabo Medical (CMM.V: TSX Venture) (CAMDF: OTCQB) released the results of an observational study that connected doctor-supervised medical cannabis treatments to a decrease in benzodiazepine reliance among Canadian patients. The team responsible for the report shared its findings with several Canadian medical journals and details are expected to be published in the Dalhousie Medical Journal.
This announcement came after Canabo Executive Chairman Dr. Neil Smith reported the findings during a presentation at the Canadian Consortium for the Investigation of Cannabinoids event in Toronto.
Research conducted over the past year revealed that 40% of patients who were prescribed medical cannabis to treat pain and anxiety eliminated the use of benzodiazepines within 90 days. The number of patients who stopped using benzodiazepines increased to 45% within a year of cannabis treatment.
Canabo has also been collecting data related to the extent cannabis serves as a substitute or an effective complement to traditional opioid therapies. Friday’s report is expected to be the first in a series that examines the role of cannabis in modern therapies.
Horizon’s Cannabis ETF Rallies During First Week
Horizons Medical Marijuana Life Sciences ETF commenced trading on the Toronto Stock Exchange (TSX) last week under the ticker symbol HMMJ and it’s up more than 7% since then.
The Medical Marijuana Life Sciences ETF is designed to be a liquid and investable index of publicly listed life sciences companies and other firms focused on the cannabis industry. The index selects from a universe of publicly-listed North American companies that have operations that may include one or more of the following: biopharmaceuticals, medical manufacturing, distribution, bio-products and other ancillary businesses within the cannabis industry.
The index only includes stocks that meet minimum asset and liquidity thresholds. The index is rebalanced quarterly on a market-capitalization basis and capped so that no single stock can exceed 10% of the portfolio’s weight when rebalanced. As of March 20th, the fund planned to allocate as such:
- Scotts Miracle Gro (SMG): 10%
- GW Pharma (GWPH): 10%
- Insys Therapeutics (INSY): 10%
- Canopy Growth (WEED.TO) (TWMJF): 10%
- Aurora Cannabis (ACB.V) (ACBFF): 10%
- Aphira (APH.TO) (APHQF): 10%
- Cronos (MJN.V) (PRMCF): 7.41%
- Zynerba Pharma (ZYNE): 7.15%
- Cannimed (CMED.TO) (CMMDF): 5.04%
- Supreme (SL.CN) (SPRWF): 3.95%
- Emblem (EMC.V) (EMMBF): 3.8%
- CannaRoyalty (CRZ.CN) (CNNRF): 2.61%
- Emerald Health (EMH.V) (TBQBF): 2.01%
- ICC International Cannabis (ICC) (ICCLF): 1.89%
- Maple Leaf Green World (MGV) (MGWFF): 1.66%
Lexaria and Neutrisci Move Partnership Forward
Today, Lexaria Bioscience Corp (LXRP: OTCQB) (LXX.CN: CSE) and Neutrisci International (NU.V: TSX Venture) (NRXCF: OTCQB) executed its previously announced joint venture to produce and commercialize a line of edible cannabinoid mouth-melt products. The products will utilize Lexaria’s patented technology and Neutrisci’s proprietary pterostilbene tablet form factor.
The joint venture will operate under the name Ambarii Trade Corporation and initial operations will be equally funded by the companies. Lexaria and Neutrisci will contribute their respective technologies through a license agreement and will share profits derived from the JV on a 50/50 basis.
Ambarii intends to secure licensees in California, Colorado and in Canada to manufacture and sell mouth-melt products containing THC. These products will combine the benefits of each of Lexaria’s and Neutrisci’s existing technologies and ingredient mixes. In June, a licensed California entity is scheduled to manufacture and test a THC version of the products.
Ambarii also intends to develop hemp oil-based products for distribution through networks including Neutrisci’s existing network of retail distributors as well as other methods. Initial production runs on these products have already achieved positive results in a human focus group.
This joint venture is attractive and may provide an avenue to create value for shareholders of both companies. Although there are no immediate plans to do so, Ambarii will be structured to allow for a potential future spin-off in the form of a stock dividend,
Important Investor Disclosures
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