Happy Friday,

As if you didn’t get enough Cultivated in the last 48 hours, here’s another one!

Many of you have asked me to make these newsletters shorter and more digestible, so I’m trying to publish more frequently.

On busy weeks, I’ll move towards a Wednesday/Friday/Sunday schedule, with Sundays being longer feature stories, analysis, interviews, or op-eds, and weekdays as regularly scheduled programming.

It’ll be a bit dependent on news flow.

I might only publish once on slower weeks, but up to three times on busy ones.

It makes my job easier to hit that publish button more frequently, though I don’t want to overwhelm your inbox.

Let me know what you think.

-Jeremy

💡What’s the big deal?

It’s been a busy summer so far for cannabis markets.

I’ll give you a rundown of what you might’ve missed since we’ve been off, starting with the biggest news.

What happened: Cannabis company TerrAscend, which does business in both Canada and the US, got a coveted listing on the Toronto Stock Exchange.

Its first day of trading was on July 4.

Why it matters: If you’ve followed my reporting for a while, you’ve heard me say this ad nauseam: Any company that grows or sells cannabis in the US wants, desperately, to “up-list” to a major exchange to access deeper-pocketed investors.

The Nasdaq and NYSE are nonstarters, because of federal illegality. But the TSX has cracked the door open.

Right now, these companies — TerrAscend and its competitors, known as multi-state operators or MSOs — are forced to trade over-the-counter in the US, and on the secondary Canadian Securities Exchange.

So, why’s that a problem?

These exchanges are far less liquid than the TSX.

And no long-term institutional investors, like giant pension funds or asset managers, will touch US cannabis companies with a ten-foot pole.

A TSX listing could, theoretically, change all of that.

It brings both credibility, liquidity, and gives major investment banks and custodians more cover to work with the industry.

It doesn’t mean they’ll come rushing, but it will surely help.

TerrAscend’s executive chairman, Jason Wild, tweeted that Morgan Stanley removed all restrictions from the stock.1 

The final word: TerrAscend’s deal structure is complex, and not easily replicable.

I’m not sure a TSX listing will fix everything plaguing the cannabis industry, but expect a flood of companies to follow TerrAscend’s footsteps if this works out.2

What else?

What happened: Altria-backed Canadian cannabis company Cronos Group is up for sale, Reuters reports.

Multi-state operator Curaleaf is, reportedly, among the interested parties.

Why it matters: Cronos has struggled to turn a profit or build a competitive cannabis business in Canada since Altria, the maker of Marlboro and other tobacco products, invested $1.8 billion in 2019.

Curaleaf’s response?

We’ll “refrain from commenting” on market rumors, thank you very much.

But, but, but: Putting together a deal would be challenging for Curaleaf. There are both regulatory and pricing issues.

First, the deal would need some sort of carve-out to allow Cronos to maintain its Nasdaq listing while being owned by a company openly flouting US federal law.

That could look something like a reversed Canopy-Acreage deal, but I don’t know, I’m not a lawyer.

Second, it’s unlikely Curaleaf would be willing to pay enough of a premium that Altria and other shareholders would accept.3 

I’d guess that whoever is looking to scoop up Cronos would want a discount, not a premium, in the first place.

Still, Cronos does have an attractive $836 million in cash on its balance sheet, per filings.

🥊 Quick hits

Cannabis companies Columbia Care and Cresco Labs missed the June 30 deadline to close their blockbuster deal. It’s unclear what’ll happen next, but both companies said they’ll continue to work “amicably” on closing.

New York’s $200 million social equity fund for cannabis entrepreneurs is finally full. Chicago Atlantic is investing up to $150 million on top of the $50 million already secured, Governor Kathy Hochul announced.

Canadian cannabis company Tantalus Labs laid off the majority of its employees and is restructuring.

Cannabis brand Cookies is getting sued again. Cookies founder, CEO, and rapper Berner was named directly in the suit. It’s the third suit against Cookies this year — one was settled out of court, and another is ongoing.

Canopy Growth’s stock has had a wild few weeks. It’s up over 50% in the past five days, though still down 71% this year. Eight Capital put a $0 price target on the stock on July 5.

The SEC has ordered Sol Global founder Andrew DeFrancesco to pay about $1.3 million in disgorgement, as well as a $1.7 million civil penalty over filing misstatements, a pump-and-dump scheme, and other stock fraud, according to Green Market Report. DeFrancesco is barred from serving as a director of a public company.

🗣️ Quote of the day

“A consequence of living in the gerontocracy of Congress is a boomerfied view of drug policy,” says Florida Rep. Matt Gaetz.

Gaetz commented to Marijuana Moment after the Republican-controlled House blocked Gaetz’s amendment that would end cannabis testing as a requirement for military enlistment in the National Defense Authorization Act.

Republicans blocked a slew of cannabis and psychedelics-related amendments from the NDAA.

🔗 Links, links, and more links

States are sharing key medical cannabis data with the federal government to aid the Biden Administration’s review over whether to remove cannabis from the Controlled Substances Act, reports Marijuana Business Daily.

Republicans and Democrats are in a stalemate over the SAFE Banking Act, Politico reports.

Cannabis advertising is expected to hit $2.5 million next year, but there’s still uncertainty over how big social media platforms will handle it, Digiday reports.

📉 Charted

This comes from The Stash newsletter. The industry’s struggles in a nutshell.

😎 One fun thing

Say what you will about cannabis executives, but they’re never boring. Executives at cannabis company MariMed staged a “Boston THC” party as a protest against the industry’s hated 280E tax.

Yes, they dressed in colonial garb, yes, they rented a tall ship, and yes, they threw wooden boxes labelled “weed” into the harbor.

See for yourself: