This Bud’s For You
THIS BUD’S FOR YOU
Three companies — Molson Coors, Constellation Brands and The Shellow Group — are at the forefront of their fields in the effort to bring legal marijuana products to America
The American brewing giant Molson Coors (owner of Milwaukee-based Miller Brewing Company) has entered into a joint venture with the Quebec-based corporation Hydropothecary (HEXO)—one of the many Canadian pot companies now traded on an American Exchange In fact, in the past year, the dysfunctional marijuana dis-regulation continues at a pace that one can only keep up with by reading daily subscriptions to www.fool.com, www.seattletimes.com, www.forbes.com, www.fda.gov, and www.washingpost.com. Attorney Robin Shellow of Milwaukee-based law firm The Shellow Group, is currently the tip of the spear in the Federal Court for the Eastern District of Wisconsin, with a case that has far-reaching implications for the future legality or validity of the marijuana market in America.
The U.S. Food and Drug Administration (FDA) has decided that marijuana is not a restricted controlled substance and has approved Epidiolex (cannabidiol) [CBD] oral solution, made by GW Pharmaceuticals, for the treatment of seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients two years of age and older. It is the first FDA approval of a drug for the treatment of patients with Dravet syndrome. It is also the first FDA-approved drug that contains a purified drug substance derived from marijuana. According to the public information officer at the Drug Enforcement Agency (DEA), we will have to re-schedule marijuana within the next 90 days.
The confused regulation of marijuana has reached a tipping point where the intervention of the Courts is necessary. The dysfunction related to marijuana regulation was, in part, better articulated by the mainstream press, also known by some in the government as fake news.
Additionally, yet another cannabis stock has hit NASDAQ named Tilray (TLRY) and, despite Government response, one cannot answer the question of whether those persons who bought stock in the initial public offering are violating federal drug statutes and money laundering statutes. Now one might think that the answer to these questions of legality and enforcement might be answered quite simply—these are Canadian stocks. However…
“…wait—plot twist—Tilray is actually owned (82 percent) by Seattle-based weed company Privateer Holdings. Privateer is not the only American company doing the old switcheroo to make a greenback off the green. For example, New York-based Constellation Brands, the liquor giant behind beverages Corona and Black Velvet Whiskey, owns part of Canadian company Canopy Growth.”
This green rush to market is also having trickle down effects upon companies only affiliated with the growth of marijuana. Recently, the North American Marijuana index–one of the sources that now follows the IPO’s for new pot stock – listed Miracle Gro and Kush Bottles as the two best long-term investments under the category of ancillary marijuana stocks.
In the last six months I have undergone a sea change regarding ALL marijuana offenses. This change did not occur because it is now legal in some fashion in 30+ states. On February 28, 2018, a marijuana stock called Cronos was the first marijuana stock to list on NASDAQ. Cronos was shortly followed by companies called Canopy Growth, Aurora Cannabis and Tilray. I have yet to figure out how an American can buy and sell marijuana stocks owned by American investors but whose companies are registered as Canadian and selling to American markets, but cannot buy or sell or grow marijuana. The green wave has begun in earnest and so too has the corporate litigation and regulation that surrounded the tech boom. Whether it is cases filed in district courts surrounding the patenting of a brand or the copyright of a name, Canadian companies with American owners—selling to American companies in states where pot is legal and poised to dominate market share in the US due to the massive investments being made by giant American beverage corporations, for instance – are reaping huge profits off the back of what is still considered a Schedule I controlled substance. Constellation Brands, the largest American distributor of alcoholic beverages, initially invested 190 million dollars in Canopy Growth. Last week, the business press was aflutter with the news that the figure had now grown to 3 billion dollars as Constellation Brands poured 3 billion dollars into the THC-infused beer business.
Whatever success Molson Coors, Anheuser-Busch, Corona and other American corporations achieve in their forays into the Canadian marijuana marketplace, and however the Courts in places like the Eastern District of Wisconsin choose to rule on whether these marketplaces will expand south of the Canadian border, the continued trend towards dis-regulation, medicalization and/or legalization of marijuana and its derivatives will continue. The genie is out of the bottle, and a trail of smoke is billowing forth behind him.