Q2 STOCKS TO BUY

7 Cannabis Stocks in Focus; All Eyes on Decriminalization Bill

Sundial Growers completed its acquisition of Alcanna

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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, and look at how the cannabis industry is evolving as we make our way through 2022.

The world of cannabis saw massive growth in 2021 and 18 states plus D.C. officially legalized the adult-use of cannabis by the end of the year. Thirty-one states plus D.C. had taken decriminalization measures regarding cannabis by the end of 2021. As of late 2021, marijuana is classified at the U.S. federal level as a Schedule I substance under the Controlled Substances Act. In other words, cultivating, distributing, and possessing cannabis remains illegal at the federal level.

The MORE Act is expected to head to the full House for a vote today. The possibility of federal cannabis legalization in the United States has investors feeling incredibly optimistic about the cannabis industry, contributing to a strong rally in beaten-down marijuana stocks lately. The MORE Act would decriminalize cannabis at the federal level in the United States.
 

In addition, here is a quick summary of the major (and action-worthy!) cannabis stock news from this week:

On Tuesday, The Valens Company Inc. (NASDAQ:VLNS) announced the raising of $22.5 million through an agreement with Stifel Nicolaus Canada Inc. and A.G.P./Alliance Global Partners. These partners have agreed to purchase, on a “bought deal” basis, 10,613,207 units of VLNS at a price of $2.65 CAD per unit. The Valens Company has plans to use the capital raised from this offering to pursue strategic growth initiatives throughout North America.

urban-gro, Inc. (NASDAQ:UGRO) released its financial results for the fourth quarter of 2021 on Tuesday. This report featured record-breaking revenue of $19 million in Q4, a 106% increase year-over-year. UGRO also boasts a strong balance sheet with $34.6 million in cash and zero debt. According to urban-gro, "[We are] very excited to see what lies ahead for urban-gro. Our strong balance sheet and positive cash flow gives us the flexibility to diversify our revenue streams and pursue profitable growth opportunities."

On Wednesday, Greenlane Holdings, Inc. (NASDAQ:GNLN) released its financial results for the fourth quarter of 2021. GNLN reported a 54% increase in total revenue compared to Q4 of 2020, producing a total of $56 million. According to Greenlane, "2021 was one of the most pivotal years in Greenlane’s 17-year history. Not only did we complete our transformational merger with KushCo-creating the industry’s leading ancillary cannabis company and house of brands-but we also strengthened our Greenlane Brands portfolio with the acquisitions of Eyce and DaVinci, which gave us a strong platform entering the new year.”

On Thursday, IM Cannabis Corp. (NASDAQ:IMCC) released its financial results for the fourth quarter of 2021. IMCC delivered a 309% increase year-over-year in revenue, driving $4.9 million CAD just in Q4 of 2021. Additionally, when comparing full year of 2021 to full year of 2022, IM Cannabis reports, “Our revenue growth of 242% to a record of over $54 million in 2021 is a direct result of executing on our strategy to build a world-class operating platform for the premium cannabis market."

Major Canadian cannabis retailer, High Tide Inc. (NASDAQ:HITI), announced the signing of an agreement to purchase Livonit Foods Inc. for $2.8 million CAD on Thursday. This transaction includes two stores in Ontario operating under the Bud Heaven name. The deal - once approved - should close in the next couple weeks.

Sundial Growers Inc. (NASDAQ:SNDL) announced the completion of its acquisition of Alcanna Inc. for a total of $320 million on Thursday. According to Sundial, "We look forward to working closely with the team at Alcanna and applaud James Burns' leadership in repositioning Alcanna's business and helping to develop Alcanna and Nova into first-class retail enterprises over the last several years. While the Alcanna transaction initially appears to be a step towards diversification and vertical integration, we expect to bring focus and specialization to the model as the cannabis industry evolves, including, for example, through potential spinoffs and consolidation of synergistic assets into pure-play businesses."

On Thursday, Canopy Growth Corporation (NASDAQ:CGC) announced the appointment of Judy Hong and Jonathan Di Tosto to its management team, as well as the creation of four new strategic roles within its senior leadership team. According to CGC, "As we enter our new fiscal year and continue our focus on accelerating growth and advancing on our path to profitability, [we] feel strongly that we have the right team and strategy to realize our important ambitions for the benefit of our customers, team members, and shareholders."

 
 

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