High Five
Midterm aftershocks set the agenda, from a defeated Massachusetts rollback to tax repeal hopes in Michigan, while third quarter earnings land across the majors.
Massachusetts voters reject ballot measure to dismantle the legal cannabis market
Massachusetts voters defeated a ballot measure that would have eliminated the state's recreational marijuana market. The industry mounted a coordinated opposition campaign that pulled operators, advocates, veterans and patients into a single coalition.
Why it matters: A statewide vote to unwind an existing adult use market failed, a signal to operators in every legal state that repeal campaigns face steep odds.
Michigan operators bet a Democratic sweep kills the 24% wholesale tax
Michigan cannabis operators backed Republican John James for governor after he pledged to repeal the state's new 24% wholesale tax, but Democrat Jocelyn Benson won and Democrats now hold a trifecta in Lansing. Industry leaders say they are confident Benson will review the levy, and Democratic senators have already co-signed repeal bills as the $3.17 billion market shrinks under price compression and store closures.
Why it matters: The tax has already produced a double digit sales drop; repeal is the fastest relief available to Michigan license holders.
Earnings day: Trulieve books $230.2 million as Canadian majors report
Trulieve reported third quarter revenue of $230.2 million. North of the border, Canopy Growth posted net revenue of C$81.4 million, up 22% year over year with a net loss that widened to C$40.7 million, and Aurora Cannabis reported C$86 million in net revenue with a C$21.1 million net loss.
Why it matters: Top line growth is back at several majors, but the loss columns show Canadian producers are still paying for that growth.
Brains Bioceutical heads to the Nasdaq in a $750 million SPAC deal
UK based cannabinoid pharmaceutical company Brains Bioceutical will go public through a merger with Armada Acquisition Corp. III at an implied pre money equity value of roughly $750 million, with existing shareholders rolling 100% of their equity into the combined company. The business will operate as Brains Therapeutics and trade under the ticker BAPI.
Why it matters: It would be the first US public market debut for a UK cannabinoid pharma company, a rare new listing in a sector capital markets have mostly abandoned.
Missouri's attorney general sues retailers over marijuana sold as legal hemp
Missouri's attorney general filed lawsuits against a Lawrence County retailer and three others, alleging they sold illegal marijuana products as hemp and falsely marketed themselves as licensed dispensaries. The office also defeated a federal court challenge to its enforcement campaign.
Why it matters: State enforcement, not Congress, is drawing the line between licensed cannabis and intoxicating hemp right now, and Missouri just drew it in court.