Weekly Wrapup: Beyond the headlines of the week ended May 17, 2019

TGIF! Here’s a recap of the top newsmakers and deals that caught our eyes here at Investor Intelligence this week – plus a look at what we’ll be watching for next week.

Wall Street’s watching

Wall Street analyst Vivien Azer at New York-based Cowen initiated coverage this week of Greenlane, a Florida-based distributor of medical and recreational marijuana vape products.

The company, which launched its IPO in April to list on the Nasdaq under GNLN, sells its products across North America and internationally. It posted nearly $50 million in revenue in the first quarter – but a net loss of $17.7 million.

Azer forecasts 2019 revenues of $214 million for Greenlane, with projections for annual revenue to hit $600 million by 2023.

The company’s compound annual growth rate of 27% “outpaces all of the high-growth traditional CPG companies under our coverage,” she noted in a research paper to clients this week.

Azer has an outperform rating on Greenlane with a target price of $21 a share.

The stock currently trades below $17, which “represents an attractive buying opportunity,” Azer said.

Checks and balance sheets

ICYMI: Several big cannabis companies posted earnings this week, including Tilray and Aurora Cannabis. Both Canadian giants posted big gains in revenues, but losses widened for varying reasons, including ramped-up spending on expansions into recreational and international markets.

To date, Canada’s top five licensed producers – including Aphria, Canopy Growth and Cronos – have not turned a profit.

Meanwhile, Tilray’s CEO Brendan Kennedy landed himself a No. 2 spot on Bloomberg’s roundup of highest-paid CEOs with an eye-popping executive compensation package worth $256 million in 2018. That should be an interesting topic during the company’s annual shareholder meeting on May 30.

Curated with you in mind: Other top stories worth your time

  • Treasury Secretary Steven Mnuchin may be open to a bipartisan solution to marijuana firms’ banking woes, but he doesn’t believe cannabis businesses should have the ability to receive federal “opportunity zone” tax credits.
  • Nearly $290 million was raised through equity deals last week – just two weeks after the second-highest week of the year for raises ($473.5 million).
  • Acreage Holdings (CSE: ARCG.Uagreed to sell cannabis-related real estate to a newly formed real estate investment trust (REIT), GreenAcreage Real Estate Corp., under a leaseback agreement between the companies.
  • Harvest Health & Recreation (CSE: HARV) closed the initial tranche of its previously announced private placement for gross proceeds of $100 million.

Next Week:

  • Canadian licensed producer 48 North is set to report earnings after the markets close Monday. A conference call to discuss results is planned Tuesday at 8:30 a.m. ET.
  • Also, don’t miss the next Investor Intelligence Executive Webcast on Tuesday, May 21, at 1 p.m. ET. I’ll be talking with Codie Sanchez of Cresco Capital Partners – and a regular contributor to Investor Intelligence! Learn more here.

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With that – enjoy the weekend!

Sincerely,

Lisa Bernard-Kuhn

Editor, Investor Intelligence