Lawmakers hit a few speed bumps on their way to banking reform in the cannabis industry, and Health Canada released the first phase of their findings after a year-long review of the Cannabis Act.
And while Terrascend (TSX:TSND,OTCQX:TSNDF) had good news for shareholders to report during their first Investor’s Day at the TSX, Aleafia Health announced a pending sale.
Finally, Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) follows Terrascend to the Toronto Stock Exchange.
Curaleaf announces plans for TSX listing
Following Terrascend’s successful bid to list on the Toronto Stock Exchange, US-based cannabis company Curaleaf announced its application on October 10.
According to multiple media reports, Curaleaf, which has headquarters in New York, previously stated back in May 2023 that it had ‘intentions’ to transfer its listing to the TSX from the Canadian Securities Exchange, but required the consent of its shareholders. On October 3, the company satisfied one of the TSX’s listing requirements by closing an offering of subordinate voting shares. Curaleaf received gross proceeds of C$16.2 million, with Canaccord Genuity (TSX:CF,OTC Pink:CCORF) acting as the underwriter and bookrunner.
Although the company has filed the application, its listing has yet to be confirmed by the TSX. Like Terrascend, Curaleaf may be required to undergo further restructuring before its application can be approved.
Health Canada releases Cannabis Act review findings
A little over a year after the government of Canada commenced its legislative review of the Cannabis Act, Health Canada released its findings in a 113-page preliminary report titled ‘What We Heard’ on October 10.
The review, which was written into the Cannabis Act legislation but was launched a year later than anticipated, examined the impact legalization has had on youth, the economy, illicit market activity and Indigenous and rural communities. However, the main focus of the review was to assess whether harm reduction had been achieved thanks to legalization.
According to the report, the findings indicated that legalization had made an impact on illicit sales but that further measures perhaps should be considered in order to reduce harm. In particular, some panel advisors suggested that stricter age limits should be in place. Additionally, despite consumer requests that THC limits (especially on edible products) be increased, health experts agree that the current precautionary approach is in the best interest of public health.
Looming government shutdown hampers hopes of the SAFER Banking Act passing before 2024
After the SAFER Banking Act finally landed on the Senate floor in September, supporters were hopeful they would see the first step toward federal reform, possibly even before the end of 2023. However, that optimism may have come too soon.
Complications in Washington can very likely impede the Act’s once seemingly straightforward path toward legislation, the most recent of which being House Speaker Kevin McCarthy’s dismissal from his position on October 5. As of October 13, no replacement had been appointed. In the meantime, a growing list of federal duties is pushing the Act to the bottom of the pile.
Importantly, Congress needs to pass a spending bill before November 17 in order to prevent a complete government shutdown. If a shutdown were to happen, there would be no vote on the Act, but a House Speaker must be chosen before a spending bill can be decided upon. Adding to the complication, the top Republican nomination for Speaker is Ohio Representative Jim Jordon, who is opposed to any kind of reform of cannabis policy.
To make matters worse, according to Marijuana Moment, Senator Steve Daines has said he plans to stall the vote until he is certain it can pass in the House of Representatives, which it has already done seven times but not as it is currently written. Amendments made to the bill in order to get it passed to the Senate did not sit well with some members of the House, and as the Act lost a supporter with the dismissal of McCarthy, it is unclear if the Act can pass a House vote for an eighth time.
Cannabis company news
- Aleafia Health, which filed for bankruptcy protection back in July, announced a successful bid by Red White & Bloom Brands (CSE:RWB) to purchase the company. The transaction has been submitted to the court for approval on October 27. Should approval be granted, according to a press release, the finalization of the sale should take place no later than November 22, 2023.
- Terrascend has raised its guidance for Net Revenue from US$305 million to US$317 million, representing a year-over-year growth of 28 percent. In addition, the company has adjusted its EBITDA from US$50 million to US$63 million, a difference of 62 percent. The announcement was made on October 13 during Terrascend’s first Investor’s Day held at the Toronto Stock Exchange.
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Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
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