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Cannabis Summary for March 23, 2020

2020-03-23 19:41 ET - Market Summary

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by Stockwatch Business Reporter

The S&P/TSX Cannabis Index gained 0.51 point to 114.52 Monday, while the Canadian Securities Exchange Composite Index gained 10.7 points to 240.91. United States-based CBD producer Charlotte's Web Holdings Inc. (CWEB) signed a definitive agreement to acquire CBD company Abacus Health products Inc. (ABCS) in an all-stock deal worth about $99-million. The exchange ratio implies a price per Abacus share of $4.39, a nice premium on its $2.85 stock price entering trading today. (Abacus shareholders will receive 0.85 of a Charlotte Web share for each Abacus share held.) The market approved of the move, as Charlotte's Web gained 30 cents to $5.10 on 827,600 shares, while Abacus Health rose 58 cents to $3.43.

Charlotte's Web makes hemp-derived CBD products, ranging from oils to capsules to gummies. Abacus, meanwhile, makes over-the-counter topical CBD products. It has a pain relief product called CBDMedic, which is endorsed by former New England Patriot tight-end Rob Gronkowski. NFL players are famous for playing through injuries and Mr. Gronkowski's career was plagued by injuries, so he was a sensible fit for CBDMedic.

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