Breaking Down a Wild Week in the World of Weed Stocks

Cannabis staples JVA and HEXO both reported earnings this week

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Welcome back to our weekly series, Schaeffer's Cannabis Stock News Update, where we recap what happened in the world of marijuana stocks last week and look ahead to how the cannabis industry continues to take shape in 2021.

Investor interest in the cannabis industry is growing at an explosive rate, and the leading players continue to break through legal barrier after legal barrier, especially in the United States. More than 40 U.S. states legalized recreational and/or medical marijuana by the end of 2020. Now, more and more companies are starting to see the opportunity in cannabis cultivation, marketing, distribution, and technology.

This week, we saw a lot of legislation momentum across multiple U.S. states. Over in Rhode Island on Monday, a bill for the adults-only usage of cannabis reached General Assembly floor for the first time ever. Rhode Island Governor Dan McKee is eager to sign the bill into law. The bill will provide guidance for the retail licensing with a focus on using a specific social equity assistance fund.

Louisiana Governor John Bel Edwards signed a marijuana decriminalization bill on June 14. What is specifically being decriminalized in the state of Louisiana is the possession of a small amount, defined as under 14 grams, of cannabis for personal use. Violations of this law will simply result in fines, not jail time.

Here is a quick roundup of major (and action-worthy!) cannabis stock news this week:

Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) announced the appointment of Steven Schoch to the Company's Board of Directors and as Chair of the Audit Committee on June 14. Mr. Schoch brings more than 20 years of financial and operational leadership and expertise across various areas in biopharmaceuticals, media, and technology, including building and scaling businesses and leading innovation. ARNA was last seen trading around $65.97.

On June 15, The Supreme Cannabis Company, Inc. (TSX:FIRE), announced that it had been granted the final court order from the Ontario Superior Court of Justice approving the plan of arrangement with Canopy Growth Corporation (NYSE:CGC), Canopy will acquire all of the issued and outstanding common shares of Supreme for consideration consisting of 0.01165872 of a Canopy common share and $0.0001 in cash in exchange for each Supreme Share held, which was previously announced on April 8. CGC was last seen down 3% to trade at $23.19.

Coffee Holding Co., Inc. (NASDAQ:JVA), a fairly new player in the cannabis stocks arena, announced its operating results for the past three months and six months on June 14. Net sales totaled $14.4 million for the past three months, a decrease of $5.6 million or 28%, from $20 million last year. According to the CEO, "We are currently planning our official initial launch of our CBD infused brands during our third fiscal quarter of 2021. We have identified at least 27 states, that subject to certain restrictions, will allow sales of CBD beverage products as we prepare our go-to-market strategy for our CBD infused brands." JVA was last seen down 2.9% to trade at $5.25.

On June 14, Cronos Group Inc. (NASDAQ:CRON) and PharmaCann Inc, one of the largest vertically integrated cannabis companies in the United States, announced that the companies have entered into an agreement under which a wholly-owned subsidiary of CRON has purchased an option to acquire an approximately 10.5% ownership stake in PharmaCann on a fully-diluted basis. CRON is down 1% to trade at $8.48.

HEXO Corp. (NYSE:HEXO) reported its financial results for the third quarter of fiscal 2021 on June 14. Total net sales declined $10.2 million from the previous quarter. HEXO's total net loss remained flat quarter-over-quarter. HEXO kicked off trading this week ahead of earnings at $5.97 after a gap down from last week's closing price of $6.60. HEXO stock was trading around $6 most of the week, but is down 7% to trade at $5.66 as the week ends.

Innovative Industrial Properties, Inc. (NYSE:IIPR), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced on June 15 that its board of directors has declared a second quarter dividend of $1.40 per share of common stock, representing an approximately 6% increase over IIPR's first quarter dividend payout of $1.32 per share of common stock, and an about 32% increase over IIPR's second-quarter of 2020 dividend of $1.06 per share of common stock. IIPR was last seen trading at $186.32.

Amyris, Inc. (NASDAQ:AMRS), a leading synthetic biotechnology company that develops synthetic cannaboids, announced on June 15 that AMRS has executed a binding term sheet for the acquisition of award-winning, clean wellness company OLIKA Inc. On June 17, Amyris also announced its partnerships with the UNCF (United Negro College Fund) and 10,000 Degrees® to establish a $180,000 scholarship fund to support black and African American students pursuing higher education across STEM (science, technology, engineering, and math), business, and marketing studies. While AMRS took a dip mid-week this week, Amyris stock has breached the $16 level in today's negative price action.

In other cannabis news unrelated to the stock market (so far), 'Tiger King' star, Joe Exotic, announced that he will be releasing a cannabis line from prison. Paul Pierce, a former player on the Boston Celtics, also announced he will be launching a cannabis brand himself.


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