Good morning.
Today at 10 AM, Jeremy and Jay are joined by SphereX chief revenue officer Ryan Hunter, one of Colorado’s largest cannabis brands.
Find us on YouTube, LinkedIn, or Jeremy’s X page.
Let’s get to it.
-JB, JR, ZH
Today’s newsletter is 936 words or about an 8-minute read.
💡 What’s the big deal?
HOSTILE
Curaleaf launches hostile bid for Aurora
What happened: U.S. cannabis firm Curaleaf plans to launch a hostile takeover bid of Canadian counterpart Aurora, after Curaleaf says "repeated attempts" to engage Aurora CEO Miguel Martin were left on read.
The deal makes sense on paper, but actually getting it over the finish line is another story. $CURLF ( ▲ 5.27% ) $ACB ( ▲ 20.59% )
What they’re saying: "Our proposed acquisition of Aurora would create the largest cannabis platform in the world and cements our global leadership position," Curaleaf CEO and Chairman Boris Jordan said on X. Aurora didn't immediately comment on the deal.
What’s in the deal: The deal would see Curaleaf acquire Aurora for $4 per share, implying a 45% premium on the 30-day average of Aurora's share price. The deal works out to roughly $270 million on a fully diluted basis.
Aurora's TSX-listed shares surged about 21% on the news, indicating that long-suffering shareholders like the idea.
The company, one of the earliest publicly traded Canadian cannabis operators, is down more than 99% from its all-time high of over $1,200 per share in 2018, when Canada became the first large economy to federally legalize cannabis. Curaleaf shares are up about 5% as of Tuesday afternoon.
Why it matters: The deal makes sense on paper. It's all about global distribution, which is becoming a highly lucrative segment for the better-performing operators.
Canadian producers can ship raw cannabis into Europe's lucrative medical markets because Canada legalized federally and its regulations are stable. American operators can't. Cannabis is still federally illegal in the U.S., so product grown in Arizona or New Jersey can't legally cross a border.
That's why Curaleaf's international arm grows in Portugal, Spain, and Canada rather than exporting from its U.S. footprint.
-JB
🗯️ Quotable
“We’d have to pivot yet again,” Omar Ansari, the founder of Minnesota’s Surly Brewing said of the looming ban on hemp-derived THC drinks. “Sometimes you run out of things to pivot to.”
Ansari estimates that Surly brewing is about 60% hemp THC drinks as consumers shift away from craft beer. Now, that business might go away if lawmakers can’t find a solution. Read the full story here.
⏩ Quick hits
Michigan dispensary chain closes five stores, blames 24% wholesale tax 💰
Higher Love Cannabis Co. is shuttering five of its nine Upper Peninsula dispensaries, citing the mounting burden of the state's new wholesale tax. Michigan cannabis sales are already down 5.3% for the first half of the year, and one consultant says the tax has accelerated a wave of closures and job losses across the state.
Virginia hemp businesses sue to block new THC cap ⚖️
Seven Virginia hemp companies are suing to stop a state budget provision that kills the 25-to-1 CBD-to-THC exception, a change set to take effect Aug. 15 with no transition period. One plaintiff says it'll wipe out 95% of her revenue overnight, and Virginia's own regulated cannabis market isn't scheduled to open until mid-2027.
Texas THC ban stays in place after judge rejects emergency motion ⚖️
A federal judge denied hemp businesses' bid to temporarily block Texas's THC ban, ruling they hadn't shown irreparable harm. The broader lawsuit over the ban, which reclassified delta-8, delta-10, and other hemp derivatives as Schedule I, is still pending, and cannabis experts say more than half the THC products on Texas shelves could disappear if it isn't overturned.
📈 Insights
NJ & NY Ping Ping: The August East Coast 8th Index
This month’s East Coast 8th Index shows movement in the East Coast’s most important markets, with New York heading up while New Jersey hit a new low. Here’s what else Lit Alerts’ data show:
New York Reclaims Top Spot: New York ($37.16) reclaimed its position as the highest-priced market in the index after a modest $0.18 month-over-month increase.
New Jersey Hits New Historic Low: New Jersey dropped $0.49 month-over-month to land at $36.74, establishing a new all-time low for the Garden State and relinquishing the top price spot.
Connecticut Reaches Index Floor: Connecticut extended its downward trajectory, dropping $0.21 to hit a new all-time index low of $32.03.
Maryland Bounces Back: Maryland reversed its July dip, ticking up by $0.41 to $33.15 per eighth.
Massachusetts Flatline: Massachusetts remained ultra-stable, inching up just $0.09 to $23.10 per eighth as the region’s established budget benchmark.
🚀 Deals, launches, partnerships
NFP acquired Frontier Risk's cannabis insurance business, bringing SVP Eric Schneider into NFP's Life Sciences practice. Congrats to James and the team!
💰 Earnings
Vireo and Organigram were up yesterday:
Vireo posted Q2 GAAP revenue of $209.3 million, up 335% year-over-year, as the company's acquisition spree turned it into a 10-state operator racing toward 270 dispensaries. $VREOF ( ▲ 3.76% )
Organigram's Q3 net revenue jumped 49% to $105.8 million, with the company's April acquisition of German cannabis firm Sanity Group contributing roughly C$40 million of that. $OGI ( ▲ 17.14% )
Aug. 12
Marimed
Ascend Wellness
Aug. 13
Chicago Atlantic - 9:00 AM
⏪In case you missed it
Jeremy joined Greg Dunaway on the Corner Office podcast, to chat about the Senate’s hemp stalemate, corporate lobbying in cannabis, and what comes next. Watch it here:
📰 What we’re reading