1 - CBD Market Fluctuations
This week’s “good read” on the subject of cannabis stock fluctuations in the immediate wake of the news came from Investors Business Daily, a good round up of winners and losers, both from the midterms themselves and from Sessions’ farewell.
The market decided this was good news for certain listed stocks, those tied to the Canadian industry leaders in cannabis. Cronos, a cannabis group based in Toronto and distributing globally, went from 9.09 at the closing bell on Tuesday to 9.79 at the same bell on Wednesday, the day of Sessions’ departure. Canopy Growth, the industry giant, moved likewise upward. It closed Nov. 6 at 43.41. It closed the next day at 45.64.
Tilray, finally, a pharm and cannabis company based in British Columbia, had closed on election day 106.8. But it closed on the following day, Nov. 7th, dramatically higher: 139.60.
But it has to be added that the buzz got harsh; these stocks lost those gains soon thereafter on missed sales expectations. Further, a Citron Research report from earlier this year making the case for shorting such stocks, Cronos in particular, still hangs over the party.
2 - Predicting a Shake Out in the Cannabis Industry
Recommended read number two comes from Bloomberg.
A shake-out is inevitable. One doesn’t have to be an Andrew Left to reach that conclusion. Indeed, Brad Olesen, of Bloomberg, has run a fine interview with Jakob Ripshtein of Aphria about the present state of the industry, in which Ripshtein says that after the shakeup “there will be a group of companies at the top, the big producers, and some smaller producers at the bottom, like craft beer.” But some in the middle “will be very challenged to stay around.”
3 - On-demand Medical Marijuana Delivery Service Expands Beyond California
Four years ago, Eaze, the corporate alter ego of Keith McCarty, launched the first on-demand medical marijuana delivery service. The idea was to allow each patient a “consistent, comfortable experience,” by way of a mobile app that connects patient with dispensaries.
The experiment was a success. Eaze became known as “the Uber of weed.” In 2015, a group of VC firms including one backed by Snoop Dogg offered it $10 million in Series A funding.
The company has long talked about breaking out beyond the confines of California. The week, it announced the means for the breakout. It is launching Eaze Wellness, an online marketplace that will ship hemp-derived CBD products to customers in 41 states and DC. The press release says it is going to “take the guesswork out of CBD.”
If you wish to go beyond the company’s own press releases in order to understand the history of this company, I would suggest two still-insightful articles in the archives of two esteemed business publications. In 2015 Ryan Mac, of Forbes, wrote “I Got a Medical Prescription and Pot in Minutes without Leaving my Couch.” More recently, Sarah Buhr, of TechCrunch, wrote “Eaze is moving into recreational marijuana delivery with $27 million in new funding.”
But the ‘new news,’ to repeat, is that Eaze latest move, Eaze Wellness, takes it out of the ‘weed’ category (a term that most linguists would probably understand as referencing THC). It wants to bring its reputation and know-how to the world of hemp-derived CBD and thereby to much of the country.
4 - Leafly Offers Tips on “Sorting Through the Noise.”
Leafly, the huge consumer-oriented cannabis website, has an informative post up, by their staff writer Molly Brown, discussing “essential tips for buying hemp CBD products.”
Ms Brown observes that there is an abundance of “noise” in the retail environment (I couldn’t agree more), with all the products from topicals to tinctures, and she offers to help potential buyers sort through it.
She recommends buyers go “full spectrum,” as distinct from CBD isolate. Full spectrum oil means oil that contains more than just the CBD, where the “more” generally includes the terpenes, BDG, and BDN, maybe even some THC, through usually less than 0.3% of the latter.
Another tip: find out where the hemp was grown, and opt for US grown product. US growers abide by FDA rules. Further, if you want to go further and research the particular grower, that’ll be easier if you’re staying domestic.
Third and fourth: read customer reviews and look at the lab tests.
Brown’s fifth tip: check the other ingredients, including flavors and sweeteners. With CBD oil, as with so much that is offered for consumption in the 21st century marketplace, there is a lot of “junk” that one might be well advised to avoid, such as artificial sweeteners.
Brown also suggests buyers ask for CBD that has been extracted using the CO2 method, rather than the cheaper and dirtier ethanol method. Ethanol extraction can destroy some of the health benefits.
Finally, Brown says buyers should check labels about dosage. The key number is the milligrams of CBD involved in the product per dose. New users might want to start with tinctures, 2 to 3 milligrams per day, through drops or sprays on the tongue.
5 - Mother Jones puts out a valuable warning to the “hipsters.”
Finally, for our survey this week, there is a well-written piece at the Mother Jones site offering words of skepticism.
The story, with Jackie Flynn Mogensen byline, says that CBD has great “potential,” but the research is still being done, and it almost surely doesn’t have the range of wonder-drug uses that “hipsters” are attributing to it.
Further, the velocity with which such research moves forward is slow, given continued Schedule I status in the US. The federal government only fast tracks research into a Schedule I substance if the research concerns the treatment of grave illnesses. This means that breakthroughs on the issue of whether CBD is a solid anti-anxiety drug will have to come from Israel, or elsewhere.
Fortunately, some companies (like Breath of Life Pharma) are prepared to do the research, and to move to a welcoming jurisdiction for this purpose, so the work will go on.
Molly Brown, “Essential Tips for Buying Hemp-Based CBD Products,” Leafly, November 14, 2018.
Sarah Buhr, “Eaze is moving into recreational marijuana delivery with $27 million in new funding,” TechCrunch, 2017.
Eaze Press Office, Eaze Launches New CBD Marketplace,” BusinessWire, November 14, 2018.
Ryan Mac, “I Got a Medical Prescription and Pot in Minutes without Leaving my Couch,” Forbes, June 30, 2015.
Jackie Flynn Mogensen, “Sorry, Hipsters, CBD Will Not Solve All Your Problems,” Mother Jones, November/December 2018.
Christine Owram, “Cannabis Industry is Facing a Shakeout, Aphria Founder Says,” Bloomberg, November 13, 2018.
Bill Peters, “Marijuana Stocks Sky High on Election Results, AG Jeff Sessions Resigning,” Investor’s Business Daily, November 7, 2018.
Yardena Schwartz, “How the Booming Israeli Weed Industry is Changing American Pot,” Rolling Stone, August 24, 2017.
Unnamed, “Cronos: The Dark Side of the Cannabis Space,” Citron Research, August 30, 2018.