Aurora Cannabis Inc. shares rose Tuesday, after the Canadian company said it has entered a multiyear, multimillion-dollar agreement with mixed martial arts organization UFC to research the effect of hemp-derived CBD products on athlete recovery and wellness.
The companies have agreed to conduct the research at UFCâ€™s Las Vegas institute, setting up clinical studies to evaluate CBD, a nonintoxicating ingredient in cannabis and hemp, as a treatment for pain management, inflammation, injury/exercise recovery and mental well being. Aurora shares ACB, +2.00% ACB, -0.77% Â rose 3%.
CBD is widely held to have benefits for all of those indications, although there is not a great deal of research to back up the claims, as MarketWatchâ€™s Sarah Toy reported last week. The substance is also caught in regulatory limbo ever since the passage of the 2018 Farm Bill, which fully legalized hemp but moved regulation of CBD to the Food and Drug Administration.
The FDA has said it would not allow companies to add CBD to food or beverages until a regulatory framework has been created. Thatâ€™s because CBD is the main ingredient in the only cannabis-based drug to win FDA approval, Epidiolex, a treatment for severe childhood epilepsy developed by GW Pharma PLC.
The FDA appears ready to allow CBD to be added to cosmetics and topicals for now, although it will not allow companies to make claims regarding their efficacy in treating serious illnesses. Last month, the regulator charged three CBD companies with violating the Federal Food, Drug, and Cosmetic Act and the Federal Trade Commission Act for putting unapproved human and pet drugs into interstate commerce and making unsubstantiated health claims about them, according to Cannabis Law Report.
â€śThe FDAâ€™s tripartite assault, coupled with its landmark FTC prosecutorial alliance, sent shock waves through both the hemp and legalized Marijuana industries,â€ť said Cannabis Law, noting that health and wellness and food and drinks are what makes CBD attractive to consumers.
Cannabis Watch: All of MarketWatchâ€™s coverage of cannabis companies
Canopy Growth Corp. shares CGC, +3.98% WEED, +0.47% Â rose 2.6%, after it named Constellation Brands Inc. STZ, +0.96% Â executive Mike Lee as interim chief financial officer, replacing Tim Saunders, who will remain at the company as an adviser. Lee will become permanent CFO once Health Canada completes a security clearance that is required for all officers of the company. Constellation Brands invested $4 billion in Canopy last year, arming the Smiths Falls, Ontario-based company with a war chest to expand its business.
In regulatory news, the National Cannabis Industry Association is holding a legislative briefing Wednesday on the Secure and Fair Enforcement (SAFE) Banking Act, a bipartisan bill aimed at providing protections for banks that serve the cannabis industry in states that have legalized.
Speakers include Colorado Democratic Rep. Ed Perlmutter, one of the sponsors of the bill, along with representatives of the banking industry and individual cannabis companies.
For more on this topic, read: Push for legislation allowing banks to serve the cannabis business is gaining momentum
Shares of 48North Cannabis Corp. NRTH, +15.84% Â rose 21%, after the company posted earnings for its fiscal third quarter, showing a net loss of C$1.47 million ($1.1 million) on revenue of C$689,203. The company said it has received an outdoor cultivation license from Health Canada for a 100-acre organic farm in Brant County, Ontario, that it said will be one of the biggest-ever licensed cannabis operations in the world. The company expects to have more than 45,000 kg of dried cannabis in 2019 across its three facilities.
Organigram Holdings Inc. US:OGRMF was up 4.1% on its first day of trade on the Nasdaq exchange.