Hashish traders have warmed to this a part of the market – new hashish corporations

You are reading an issue of this week’s issue of New Cannabis Ventures’ weekly newsletter, which we’ve been publishing since October 2015. The newsletter contains unique insights to help our readers stay on top of things, as well as links to the week’s most important news.


Nine months ago we indicated a recovery in interest in secondary cannabis stocks. One of the big surprises for us in our eight years in the industry has been how long this has been. For many reasons, investors in the past have been more interested in direct cannabis operators than companies that offer goods and services that enable those companies to operate. Some of the leading ancillary companies had the highest returns in 2020, including GrowGeneration (881%) and Innovative Industrial Properties (141%).

Subsidiary companies have characteristics that make them potentially attractive to investors. Since they don’t grow, process, or sell cannabis, subsidiary companies have three advantages over direct operators. First, they are not subject to 280E taxation. Second, many of them can trade on higher-level exchanges. Third, subsidiary companies are not constrained by interstate trade restrictions and can more easily achieve economies of scale. In fact, the current state-to-state regulatory environment may provide an opportunity for ancillary companies to help their customers. Another benefit of investing in side businesses is that you can get into the industry without having to select the winners.

Several new additional investment options have emerged in the past few months. This week, AFC Gamma became the second cannabis-focused REIT to go public on NASDAQ. Earlier this year, Agrify, a developer of growing solutions for indoor farming, also went public on NASDAQ. Earlier this month, Medical Outcomes Research Analytics reverse merged with Helix Technologies and enrolled on NASDAQ to create Forian, which is focused on data and analytics. urban-gro, which provides engineering and design services to producers, was admitted to NASDAQ by the OTC when it raised $ 62 million in a public offering. In December, equipment supplier Hydrofarm went public on NASDAQ. While the deal is still ongoing, WeedMaps is going public with the merger with SPAC Silver Spike.

These stocks have generally performed well since going public or moving to the higher market, and trading volumes have also been high. We believe the success of these side companies will encourage more companies to consider going public. Dutchie’s capital increase announced earlier this week valued the private company at $ 1.7 billion, adding to investor interest in the additional subsector.

We are encouraged to see interest in side businesses increasing as we believe it will provide investors with additional opportunities to participate in the growth of the industry. We also believe that the capital raised and used by ancillary companies will help make the industry more efficient as these companies innovate and create solutions to the challenges operators face.

urban-large engineers & designs powerful cultivation systems

With the construction of over 300 controlled environment farm facilities spanning over five million square feet, urban-gro continues to serve MSOs as well as Canadian LPs that require GMP certification. The company, now listed on NASDAQ, sees insurmountable demand for sustainable, environmentally controlled farm facilities and has seen sales growth in 2020 despite the impact of Covid-19.

Keep yourself up to date by visiting the Urban Gro Investor Dashboard that we maintain for you as clients of New Cannabis Ventures. Click the blue Follow Company button to stay updated on the progress.

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With best regards,

Alan & Joel

Alan Brochstein, CFA

Alan is based in Houston and leverages his experience as the founder of the online community 420 Investor, the first and largest due diligence platform focused on publicly traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to seek new ways to connect the industry and fuel its sustainable growth. At New Cannabis Ventures he is responsible for content development and strategic alliances. Before focusing on the cannabis industry in early 2013, Alan worked as an independent research analyst in 1986 after having worked in research and portfolio management for over two decades. Alan is a prolific writer with over 650 articles published since 2007 on Seeking Alpha where he has 70,000 followers. He is a frequent speaker at industry conferences and a frequent source for media such as the NY Times, Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | E-mail

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In this article:

afc gamma, AFCG, Canopy Growth, CCHW, CCHWF, cdxx, CGC, Choice Consolidation Corp. Gti, gtii, romj, romjf, Rubicon Organics, the parent company, TPCO Holding Corp., ugro, urban-gro, WEED

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