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TOP NEWS OF THE WEEK

Billionaire investor Cooperman questions GTI’s lack of insider buying 

Outspoken billionaire investor Leon Cooperman didn’t mince words when joining Green Thumb Industries’ analyst call following the results of the company’s first-quarter results on Wednesday. Cooperman, whose ownership in GTI either through his personal holdings or through the Omega Advisors hedge fund that he controls isn’t disclosed on Bloomberg, lambasted company management for their lack of insider stock buying. “Are we just waiting for legalization as the only lever to pull, to turn around sentiment, or basically are there things the company can do in their control,” Cooperman asked GTI CEO Ben Kovler. “I look at Bloomberg and I see two or three pages of insider selling. I see no insider buying. If you think this story is so good, why we're not seeing any insider buying?” 

According to Bloomberg, there have been seven notable dates where GTI executives have sold shares in the company, compared to five times executives have purchased GTI shares. Kolver currently owns roughly 455,000 shares in the company, worth about $7 million, and has sold about 2.36 million shares over the past year while buying just 9,385, according to Bloomberg data. 

Kolver told Cooperman that there’s “no real insider selling” in the company and that he continues to have a bullish view in GTI as well as the broader cannabis industry. He noted that getting U.S. investors access to U.S. pot stocks would also help benefit the company. “To be really totally candid with you, influencers in New York like yourself who have a voice with the New York Stock Exchange and the NASDAQ will not let us be listed. This is leading to real damage in the industry,” Kovler said. 

To which Cooperman replied: “I take my battles with Elizabeth Warren and that's about it. I'm not looking for more battles, but thank you and good luck.”

Cannabis-focused event and retreat centre opens doors in Alberta

The first cannabis-focused event and retreat education centre in Canada recently opened its doors, hoping to be one of the initial wave of tourism-centred establishments catering to the country’s legal pot market. The MaryJane Manor in Mossleigh, Alta. is run like a bed-and-breakfast facility, but is also age-gated to ensure that youth won’t be able to partake in any cannabis-related events, according to a report published by Anchor Media. Serena Donovan, who owns and operates the facility, renovated an old hotel in Mossleigh and decided that she wanted to make a safe space for people to discuss and enjoy cannabis. “It’s a different crowd and it’s a different vibe,” she said. Cannabis tourism in Canada has largely failed to take off since legalization occurred more than three years ago, due to strict regulations and licensing requirements that have so far kept potential participants on the sidelines. 

Switzerland to begin adult-use cannabis sales trial in August 

Switzerland will begin selling recreational cannabis this August in a trial program that will involve just 400 people, Forbes reports. The trial program will take place in Basel, the country’s third-largest city, and attempt to find information on the effects of controlled access to cannabis as well as consumer behaviour and public health. The cannabis sold will be sourced from Pure Holding AG, a Swiss-based company, and cost between $8 and $12 per gram, depending on the product and the level of THC, Forbes said. The program will undoubtedly be closely watched by other major European nations that are also looking to relax cannabis regulations. Germany plans to soon regulate recreational cannabis usage, while France has begun its own medical cannabis trial program.

CannTrust changes corporate name to Phoena, CEO eyes return to public markets 

It’s a new start for the company formally known as CannTrust. The company announced on Tuesday that it plans to change its corporate name to Phoena Holdings, a name said to be inspired by a plant’s “phenotype”. The company, which recently exited creditor protection, aims to seek a listing to return to public markets later this year when a full audit of its financials is completed, Phoena’s CEO Greg Guyatt told BNN Bloomberg. As well, Phoena plans to engage in some potential M&A in Canada while eyeing potential moves in the U.S. and further abroad, although Guyatt did not provide specifics. A trial where four former CannTrust executives will face a number of charges tied to the growing of unlicensed cannabis in one of the company’s former facilities is scheduled to begin in October. 

ANALYST NOTE OF THE WEEK

Analysts weigh in on Hifyre April data

Canada’s smaller cannabis producers continue to steal market share away from their larger counterparts, according to analysts who poured over April sales data from Hifyre.  

Hifyre expects that $379 million of cannabis was sold in April (Statistics Canada will have more accurate data out on June 21), a monthly increase of five per cent while sales eked a one per cent gain in the first quarter. The month benefitted from the unofficial 4/20 holiday that helped lift sales.  

“It’s a couple years late and a billion dollars short, but the recent uptick in growth shows the industry is progressing,” said CIBC Analyst John Zamparo, in a note to clients. 

Interestingly, in a sign of how volatile the entire market is, Zamparo notes that some brands that have materialized overnight now command over $40 million in sales, while more established brands in the market may experience a sudden drop in sales. “It is for this reason that we believe M&A is taking time to play out,” he noted.

Despite continuing to see their share of the market slide, major players like Canopy Growth, Tilray, and Hexo all reported modest sales gains in the month, while the biggest winners are reportedly Decibel Cannabis, Cronos Group, and Organigram. 

Hexo continues to lead the Canadian market with a 9.0 per cent share of the market while seeing sales move up 0.8 per cent in the month, the Hifyre data shows. Tilray and Organigram are tied for second place with both holding an 8.3 per cent share, while Canopy Growth and Pure Sunfarms make up the rest of the top five with 6.9 per cent and 6.4 per cent share, respectively. 

BMO Capital Markets Analyst Tamy Chen notes that dried flower sales now make up 43 per cent of the market, down from a commanding 52 per cent in May 2021 as more consumers opt for convenience and other product factors. Pre-rolls have largely benefited from the shift away from dried flower, rising to 26 per cent of the market from 21 per cent, Chen said. Vape products remain flat with 18 per cent of the market, while edibles have become slightly more popular, with a seven per cent share. “Unfortunately, the hope for beverages to become a larger category that brings in new cannabis users has still not materialized,” she added

CANNABIS SPOT PRICE

$5.18 per gram

-- This week's price is up 0.4 per cent from the prior week, according to the Cannabis Benchmark’s Canada Cannabis Spot Index. This equates to US$1,831 per pound at current exchange rates.

WEEKLY BUZZ

US$3 billion

– The amount of cannabis excise tax revenue raised by the 11 U.S. states in 2021 that have legalized recreational marijuana, according to the Institute of Taxation and Economic Policy. That’s an increase of 33 per cent from a year earlier and has outperformed alcohol excise taxes by 20 per cent during the same time span.