Insider Cannabis Newsletter: February 5th

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Happy Friday readers,

This week, the cannabis industry news cycle was dominated by Jazz Pharmaceuticals’ acquisition of GW Pharma for $ 7.2 billion.

I admit – the deal surprised me. I had long anticipated the often-predicted pharmaceutical intervention on cannabis, but I didn’t expect a neuroscience-focused company like Jazz to spend $ 7.2 billion, let alone a 50% premium on the GW Share price to complete the deal.

You can read our report on the deal here, which outlines GW’s 20 year journey from launch to approval of the first (and still only) FDA-approved CBD-based drug.

What else?

Virginia and New Mexico lawmakers are rapidly marching towards legalization as New Jersey stands still. Progressive New York lawmakers have devastated Governor Cuomo’s legalization plan, pledging to bow to the legislature’s democratic super-major to propose their own plan that puts social justice and justice first.

-Jeremy (@jfberke) and Yeji (@jesse_yeji)

Here’s what we wrote about this week:

A biotechnology known for its sleep and brain drugs has just made a $ 7.2 billion bet that medical cannabis is vital to their neuroscientific ambitions

Jazz Pharmaceuticals puts $ 7.2 billion on the future of medical cannabis. The drug maker announced on Wednesday that it will be acquiring GW Pharma, the maker of the CBD-based epilepsy treatment Epidiolex, as part of a cash-and-stock deal. It’s the biggest deal to date with the cannabis industry.

17 top cannabis investors outline how the proliferation of legal marijuana will spark a deal boom and fuel investment in the emerging industry

We asked 17 of the leading investors in the cannabis industry for their forecasts for 2021. They said they expect more states to legalize marijuana, a boom in dealmaking, and a return of investor confidence in the industry, among other things.

Meet the 14 best psychedelics startups that are raising the most cash to develop new ways to treat depression, addiction, and more

Insider identified the top 14 startups working to turn psychedelics into approved drugs for conditions like depression, opioid use disorders, and anxiety. To put this article together, we reached out to companies on our list from last year, used the data provided by PitchBook, and spoke to VCs in the room.

The 14 private companies on this list alone raised over $ 222 million in 2020. Some told insiders they were preparing to go public.

Executive moves

Deals, launches and IPOs

  • Tuscan Holdings, originally a cannabis-focused SPAC, announced that it would merge with EV battery maker Microvast. Read our explainer of the cannabis SPAC landscape here.
  • Bexson Biomedical, an early-stage startup developing ketamine-based drugs for pain management, completed a Series A valuation of $ 4.8 million led by the Noetic Psychedelic Fund.
  • Cannabis marketing platform Springbig announced on Tuesday that it had acquired Canadian cannabis technology company BudTender. The companies have not disclosed the financial terms of the transaction.
  • Jazz Pharmaceuticals acquired cannabis drug maker GW Pharmaceuticals for $ 7.2 billion. The purchase price corresponds to a premium of 50% on the Tuesday closing of GW.
  • The US cannabis company Green Thumb Industries filed an S-1 with the Securities and Exchange Commission in preparation for inclusion on a major US stock exchange.

Politics moves

  • Senate Majority Leader Chuck Schumer, Sen. Cory Booker, and Sen, Ron Wyden, released a joint statement pledging to publish a draft discussion on a comprehensive cannabis reform bill that put restorative justice and public health first stand. This is the first concrete step that Senate Democrats have taken towards cannabis reform.
  • New Mexico lawmakers tabled two separate bills legalizing marijuana this week. Some lawmakers expect a third bill to be tabled this month to address social justice issues.
  • Virginia lawmakers are voting today on a bill to legalize marijuana in the state, making it the first former Confederate state to do so. Governor Ralph Northam said marijuana legalization was a priority for his government.
  • Oregon state officials incorporated the Cannabis Equity Act into state law. The bill, if passed, would include a free, automatic cancellation process and redirect cannabis tax revenue to invest in housing, vocational training, childcare and health for black, Latin American and indigenous people.

Science and Research

  • Recreational marijuana legalization is not linked to increases in drug abuse disorder among adolescents, according to a new study published in the Journal of Substance Abuse Treatment.
  • A new study published in the Journal of Psychoactive Drugs found that cannabis users choose different products depending on their age. Older consumers are less likely to use products such as rolled-up joints, vape pens, groceries and concentrates compared to younger users.
  • A new report from the Cato Institute, led by Harvard economist Jeffrey Miron, found that marijuana legalization in general had “minor effects” on issues such as youth use, traffic safety, crime, and more. The authors note that “the strong claims made by both supporters and critics are vastly exaggerated and, in some cases, completely unsupported by existing legalizations.”

Result preview

It’s winning season from next week. We have the Canadian LPs on tap, and then the US companies will start reporting a week later:

  • Canopy Growth will announce its third quarter results next Tuesday (February 9th). The call will be at 10 p.m. ET.
  • Canopy Rivers will announce its third quarter results next Wednesday (February 10th). The call will be at 9 a.m. ET.
  • Aurora Cannabis will announce its second quarter results next Thursday (February 11th). The call will be at 5:00 p.m. ET.
  • MedMen and Green Thumb Industries will hold profits for the following week.

Chart of the week

According to Nielsen and Hemp Industry Daily, sales of hemp CBD are expected to triple between 2020 and 2025. The projected increase is due in part to the growing popularity of CBD as a dietary supplement and the likelihood of favorable guidance from the FDA and Congress:

Annual estimates of retail hemp-derived CBD sales


Taylor Tyson / Insider

What we read

NY’s Soon Legal Pot Shakes Tax, Social Reform Debate (Bloomberg)

After novelty fades, Canada settles on legal marijuana (The New York Times)

“The industry is now unstoppable”: Democratic control is a big win for marijuana (Politico)

Cannabis Dispensaries Linked To Near A 30% Decrease In Opioid Deaths: Study (The New York Post)

NJ would legally get weeds right after Murphy’s inauguration, right? How the effort has stuttered for 3 years. (NJ.com)

The Kansas governor proposes paying for Medicaid’s expansion by legalizing medical marijuana (The Kansas City Star).

Opinion: NBA Must Permanently End Marijuana Testing (USA Today)