Cannabis Weekly Round-Up: TD Updates Cannabis Reccomendations

This past trading week (July 2 – 6) a new report indicated Toronto-Dominion (TD) Bank had reversed its stance on recommending cannabis stocks.

A closer look at the cannabis companies that were awarded a supply agreement with Alberta and market updates completes this Cannabis Weekly Round-Up.

This past week the Investing News Network (INN) shared a report showing TD decided to add 13 cannabis stocks to its list of allowed stocks to recommend by its advisors. In April The Globe and Mail reported the Canadian bank had actually backed away from recommending cannabis stocks.

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According to the report the stocks TD will be recommending must trade on the Toronto Stock Exchange (TSX) or TSX Venture Exchange (TSXV) and have absolutely no exposure into the US cannabis market, due to its illegal status federally. These restrictions explain the reason this list does not include Aphria (TSX:APH) and Aurora Cannabis (TSX:ACB), two leading cannabis companies with a combined market cap of nearly C$ 8 billion.

“Our most recent update reflects our ongoing evaluation of this emerging market,” a TD spokesman told The Globe and Mail. “We expect our views will continue to evolve and develop with the industry.”

Market updates

In June INN reported on a ruling from the Arizona Court of Appeals in a case involving the status of hashish (cannabis resin extracts) under the Arizona Medical Marijuana Act (AMMA) and its effect on the public companies operating in the state. The ruling denied recognition and protection for the extracts under the legalizing act. On Friday (July 6) MPX Bioceuticals (CSE:MPX), one of the operators with a large presence in the state issued a statement on the ruling.

The company cited a response from the Arizona Department of Health Services regarding the decision from the appeals court and said it expects the ruling to be met with either an appeal or direct legal action.

“The intent of the AMMA, was to protect from prosecution patients utilizing marijuana or cannabis for their medicinal needs. This most recent court ruling is in direct conflict of this protection afforded by the AMMA,” MPX said.

INN also reported on the first analyst note on Sunniva (CSE:SNN), a cannabis company with interests in California and Canada, from Canaccord Genuity. Analyst Matt Bottomley gave the company a “Speculative Buy” rating on its stock and a one year price target of C$ 7.80. As of 12:21 p.m. EST, during Friday’s trading session, Sunniva is valued at a price of C$ 8.01 per share, as of 12:21 p.m. EST.

“Although we believe our individual valuations are built on relatively conservative assumptions, the core value driver of our model rests in the assumed market penetration Sunniva will ultimately be able to secure in California and Canada,” Bottomley wrote.

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Alberta confirms which cannabis producers earn supply agreements

Similar to how Manitoba unveiled the winners of supply agreements for legal cannabis, Alberta has revealed which companies will be providing the province with its adult-use cannabis during the first year of sales. The list included a variety of cannabis producers across the TSX, TSXV and Canadian Securities Exchange (CSE).

Here’s the list of the public companies obtaining a supply deal:

The nature of some of these deals is set to evolve as transactions between companies are expected to be completed. Hiku Brands (CSE:HIKU) is in the process of merging with WeedMD and Aurora will acquire MedReleaf. Aurora, a company with operations in Alberta, earned the biggest supply agreement with the province, the company will provide 25,000 kilograms of legal product during the first six months of sales.

“Alberta offers a unique opportunity for quality-driven brands as it is one of the most sophisticated private retail markets in the country and its approach to retailing cannabis recognizes that ensuring quality and offering a selection of products are critical steps towards impacting the illicit market,” John Fowler, CEO of Supreme Cannabis, said in a statement.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Supreme Cannabis Company, Emblem, Hiku Brands and Maricann are clients of the Investing News Network. This article is not paid-for content.

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