Canopy Growth Corp (WEED)

[sneakypete]

More food for thought....

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*MKTSHEL-2159160&symbol=*MKTSHEL®ion=C

LW Capital Pool Inc. (LWI) will soon complete its acquisition of Tweed Inc., a licensed medical marijuana producer, as its qualifying transaction. The shell has finally submitted a filing statement, and the QT could close by the end of the month. LW Capital IPO shareholders should be able to sell at a profit once the company resumes trading, but they will not be the only ones celebrating. All the hopeful marijuana companies listed on the TSX-V -- and there are many of them -- will be following the leader closely.

LW Capital will roll back its shares 1:5 and then issue 32,042,612 postconsolidated shares to Tweed shareholders etc, etc. We have covered the details of Tweed's structure and share issuances several times, most recently in the Shell Summary for March 19, 2014. Since then, the Federal Court of Canada has introduced a wrinkle to Tweed's revenue expectations. Health Canada had previously said that on March 31, 2014, all personal-use production licences to grow medical marijuana would expire. That meant licensed tokers with plants in their basements would have to start buying from a commercial producer such as Tweed. But last Friday, in response to a motion brought by a group of medical marijuana patients, the Federal Court of Canada issued an injunction to preserve the status quo (no licences will expire) until the patients can be heard in court. The judge concluded some patients will not be able to afford marijuana because the commercial producers will charge a premium. The government, which designed the new law in an effort to stop home grow-ops, argues that there is no constitutional right to cheap medicine. There is no date for a trial yet. As well, the Vancouver Police have said they are not about to start shutting down personal-use producers as long as they are operating safely. The police said in a statement to The Vancouver Sun, "From our policy and our perspective, if these places are operating in a professional, safe manner -- and obviously the criminal element of the sale of marijuana is illegal -- and if there is no additional element that would cause us concern for public safety, then we use our discretion not to enforce certain drug laws."

Tweed said that as a result of the injunction, some potential customers will postpone registering to buy its weed, but there are still many patients who previously purchased from Health Canada, and they will have to switch to a commercial producer. Tweed and the other licensed producers are not allowed to advertise but they are allowed to have a website, sponsor medical education conferences and, most interestingly, promote their pot to doctors. Drug companies have a favourite way of promoting products to doctors -- samples. The friendly salesmen from the medical marijuana companies can look forward to the warmest of warm greetings by all the doctors' staff, and in many cases by the doctor himself.

So far, Tweed has sold $13.92-million worth of private placements as it prepares to go public, and as of yesterday had about $8.49-million in working capital. It anticipates spending $3.2-million of that working capital in the next 12 months, but has not published a projection for its revenue. Tweed will be the first publicly traded Canadian pot grower with a licence from Health Canada. Some of the juniors that have issued press releases announcing their intentions to get into medical marijuana include Supreme Pharmaceuticals Inc. (SL: $0.04), Maple Leaf Green World Inc. (MGW: $0.03), Windfire Capital Corp. (WIF: $0.135), Satori Resources Inc. (BUD: $0.095), Prominex Resource Corp. (PXR: $0.03), and the list goes on.

Frank Giustra's PNO Resources Ltd. (PNO) fell two cents to 13 cents on 35,900 shares. Mr. Giustra has been a seller of PNO this year. In January, he sold 38,500 shares at 24.6 cents each, and this month he has already sold 503,400 shares between 14.4 and 17 cents. He now controls 671,500 of PNO's 7,441,642 shares, bringing his total position below the 10 per cent disclosure mark. When Mr. Giustra's group acquired control of the shell in early 2007, investors rushed to buy the stock, paying between 38 cents and 75 cents for the first four months. Since then, nothing has happened at PNO other than a few director changes, a name change and a 1:10 rollback. Ouch.