International cannabis companies are showing interest in Brazil, both its large consumer market for medicinal products and a proposal that could legalize planting of the crop.
Major producers like Colombia’s Clever Leaves and Canada‘s Canopy Growth are developing and selling medicinal cannabis products to a Brazilian consumer segment estimated at 10 million to 13 million people. This results from a 2019 regulatory change allowing the import, sale and manufacturing of such products.
But permission for cultivation of hemp and cannabis in Brazil would be a bigger prize. If granted, the industry could blossom in four to five years, based on the experience of other countries such as Colombia.
“By 2025, I would like to be planting hemp in the interior of Pernambuco,” said José Bacellar, founder of Canada‘s VerdeMed, referring to a northeastern state known for illegal marijuana growing.
A proposal that would legalize cultivation was approved in June by a congressional committee. Lawmakers are weighing if it could be fast-tracked to the Senate for approval. If passed there, President Jair Bolsonaro would have to sign it into law.
While Bolsonaro’s far-right positions may seem an unlikely match for the bill, the proposal has support from some members of the powerful farm sector, a key constituency that helped him win the 2018 election.
SILICON VALLEY OF CANNABIS
In the quiet town of Viçosa in southeastern Brazil – which some call the Silicon Valley of cannabis – researchers are developing a hemp variety better suited to the tropics.
If the law is changed and research is successful, Brazil could become a top grower of cannabis and hemp, experts said.
Sérgio Rocha, director of ag-tech startup Adwa which is developing the hemp strain for Brazil, said about 3 million square kilometers (1.2 million square miles) of land would potentially be suitable for cultivating the new variety.
Brazil could overtake China, the world’s largest hemp producer, which has about 670 square kilometers (259 square miles) planted.
“Using a part of Brazil’s agricultural land would be enough to give the country the title of world’s largest producer and exporter of hemp fibers, seeds and flowers for medicinal and industrial purposes,” said Dennys Zsolt, an agronomist specializing in the plant.
Brazil bans growing of Cannabis sativa L, the plant that produces hemp and marijuana. Hemp, which has less than 0.3% of the psychoactive compound THC, contains CBD or cannabidiol. This non-intoxicating ingredient has been touted as beneficial for many health conditions including childhood epilepsy.
Growing the plants in Brazil would lay the foundation for a vertically integrated industry. A stable source of the raw material would support manufacturing of medicinal cannabis products, growth of a retail market and exports. Recreational cannabis would remain illegal.
Gabriela Cezar, chief executive of New York-based Panarea Partners investment banking firm, sees Brazil playing a leading role in hemp in Latin America, a region she calls the “epicenter of world hemp production.”
Panarea plans to form a Brazilian cannabis company focused on pharmaceutical products for pets while seeking to broker more cannabis deals in Brazil.
Among Brazil’s advantages are lower growing costs because its warm climate allows plants to grow outdoors compared to greenhouses in some countries. Stable hours of sunlight due to Brazil’s proximity to the equator are another plus.
Canopy Growth is “actively monitoring the advancement of hemp regulations in Brazil,” David Culver, the company’s vice president of global government relations, said.
But nothing is certain without the change to Brazil’s law, though some signs suggest the prospects are favorable. When Rocha spoke to a congressional committee about hemp in 2019, he was surprised that conservative lawmakers were not hostile.
“After I finished presenting the maps and hemp’s potential, I was applauded,” he said.
Although the farm caucus has not taken a formal position, members of the group said a majority in both houses of Congress back the proposal. The farm caucus controls slightly fewer than half the seats in the two chambers, and the law requires approval by a simple majority.
Center-right lawmaker Fausto Pinato, a member of the farm caucus, said he supports the bill. “If you are authorizing the sale, why not cultivation?,” he said.
(Reporting by Ana Mano in São Paulo, Jimin Kang in Seul and Maximilian Heath in Buenos Aires; Editing by Cynthia Osterman)
What China developer Evergrande's debt crunch means for U.S. investors: Ed Yardeni – CNBC
A debt crunch involving China’s second largest properly developer has caught investors’ attention in the past week.
Evergrande, the Shenzhen-based company, is facing a default on its debt burden of roughly $300 billion. The crisis has echoes to the Lehman Brothers bankruptcy, which marked its 13-year anniversary last week, a development that at the time sent shockwaves through global markets.
Ed Yardeni, president of Yardeni Research, says it’s unlikely Evergrande will have a fallout quite as severe as the Lehman bankruptcy when the global economy and credit markets collapsed. Instead, he sees it as analogous to a different event a decade even earlier.
“If it’s similar to anything, it’s similar to Long-Term Capital Management, which is the calamity that occurred in 1998 but that was dealt with very quickly by the Federal Reserve and the major banks and it didn’t have any global implications,” Yardeni told CNBC’s “Trading Nation” on Friday.
Like with hedge fund Long-Term Capital Management, Yardeni sees government intervention in Evergrande preventing any collapse and contagion.
“The reality is it is too big to fail, and I think the Chinese government is going to intervene big time. I don’t think they’re going to save management… but it will be restructured and in a way that won’t harm the economy too much over there and won’t affect the global economy or financial markets the way Lehman did,” said Yardeni.
Even if a crisis tied to Evergrande is avoided, Yardeni does not see Chinese markets rebounding anytime soon. He says Evergrande is just one reason for investors to avoid the region.
“If you’re invested in Chinese stocks, there have been lots of reasons to get out, quite honestly,” said Yardeni. “The Chinese Communist Party which runs the government over there has been meddling, intervening in the markets, interrupting corporate governance, telling companies how they should manage their businesses. And so I think it’s a good opportunity here just to lie low. I would not be buying on the dips in China.”
Beijing has tightened regulations on industries such as technology and private education in recent months. That increased scrutiny has taken their markets and U.S.-listed Chinese stocks lower.
Continued uncertainty in China could be a benefit for U.S. markets, he adds.
“There are lots of global investors that want to be invested in areas where they feel comfortable, where there’s corporate governance rules, where there’s contract laws that are obeyed. I think a lot of money that has gone global and might have been tempted to go to China may very well come to the U.S.,” he said.
Yardeni has a 5,000 price target on the S&P 500 for the end of 2022, though he says the benchmark index could reach that level sooner. The S&P 500 closed Friday at 4,433.
Big gap between Pfizer, Moderna vaccines seen for preventing COVID hospitalizations – Yahoo News Canada
Amid persistent concerns that the protection offered by COVID-19 vaccines may be waning, a report released Friday by the Centers for Disease Control and Prevention finds that America’s workhorse shot is significantly less effective at preventing severe cases of disease over the long term than many experts had realized.
Data collected from 18 states between March and August suggest the Pfizer-BioNTech vaccine reduces the risk of being hospitalized with COVID-19 by 91% in the first four months after receiving the second dose. Beyond 120 days, however, that vaccine efficacy drops to 77%.
Meanwhile, Moderna’s vaccine was 93% effective at reducing the short-term risk of COVID-19 hospitalization and remained 92% effective after 120 days.
Overall, 54% of fully vaccinated Americans have been immunized with the Pfizer shot.
The surprising findings came as a Food and Drug Administration advisory panel recommended against offering booster doses of the Pfizer vaccine to all Americans ages 16 and older. In a striking rebuke, 16 of 18 experts told the agency it had not mustered enough data to make a third shot the norm.
In lengthy briefings to the panel, representatives from Pfizer pointed to clinical trial results involving 306 mostly healthy participants to argue that a booster “restores” the 95% vaccine effectiveness rate seen earlier in the pandemic.
Company officials also touted evidence from Israel, which rolled out boosters after seeing a rise in hospitalizations among people who were fully vaccinated. Those hospitalizations dropped dramatically after third doses were given, Israeli scientists have said.
But panel members made clear that despite Pfizer’s aggressive stance, it had not gathered enough evidence that a third shot was safe for young people and for those at lesser risk of becoming severely ill with COVID-19.
“We need age-specific data” on the safety and protective benefits of a further booster, said Dr. Ofer Levy, a panel member who directs the Precision Vaccines program at Boston Children’s Hospital.
FDA clearance for booster shots for everyone 16 and older would be seen as something “close to a mandate,” said Dr. Eric Rubin, a panel member and infectious-disease expert at the Harvard T.H. Chan School of Public Health. Rubin worried that such a move could redefine what it takes to be considered fully vaccinated against COVID-19.
“None of us are there yet,” he said.
But others apparently are. Dr. Anthony Fauci, President Biden’s top advisor on vaccines, has come out strongly in favor of booster shots, saying before Friday’s vote that a failure to endorse the shots “would be a mistake.”
And in mid-August, Biden himself said his administration would begin making booster shots available the week of Sept. 20 to those vaccinated for at least eight months.
Biden cautioned at the time that his plan was contingent on FDA approval. But his announcement stoked concerns of political meddling in a matter that required the unhindered evaluation of scientists.
“This should demonstrate to the public that the members of this committee are independent of the FDA,” Dr. Archana Chatterjee, dean of the Chicago Medical School, said after the vote. “In fact, we do bring our voices to the table when we are asked to serve on this committee.”
The panel unanimously agreed that a third shot of the vaccine now sold under the brand name Comirnaty should be offered to select groups: individuals 65 and older, people at risk of developing severe disease, and those, including healthcare workers, whose occupations put them at high risk of infection.
Dr. Peter Marks, who leads the FDA’s evaluation of drugs and vaccines, told panel members that the agency could give its blessing to booster shots with an emergency use authorization — a regulatory step that falls short of the full approval Pfizer had sought.
The company issued no statement Friday in response to the panel’s vote.
Researchers in the United States have been warning for months that the immunity afforded by COVID-19 vaccines might be waning. The CDC reported that in late July, close to three-quarters of the 469 people swept up in a Massachusetts outbreak were fully vaccinated. And the agency has launched several studies aimed at detecting changes in vaccine effectiveness in healthcare workers and others who were vaccinated early.
But virtually all of those infections appeared to be mild. And health officials eager to induce vaccine skeptics to step up for their shot — including Fauci and Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention — have repeatedly praised the vaccines for keeping most fully vaccinated people out of hospitals.
The new report on waning vaccine efficacy challenges that expectation.
Researchers from around the country found striking differences between two mRNA vaccines long thought to be interchangeable.
When the Moderna vaccine received emergency use authorization in December, the company reported that 30 people in its clinical trial developed severe cases of COVID-19, including nine who required hospitalization. All 30 patients were in the placebo group, resulting in a vaccine efficacy against severe disease of 100%.
Ten people in Pfizer’s initial clinical trial developed severe cases of COVID-19. Nine of them were in the placebo group, including seven who were hospitalized, resulting in a vaccine efficacy against severe disease of 88.9%.
Once the Moderna and Pfizer vaccines were rolled out to the public, their records of preventing COVID-19 hospitalizations in the first four months were neck and neck — 93% and 91% effective, respectively. But the degree of protection diverged after that.
When they focused specifically on the period 120 days beyond the second dose, the study authors found that the Moderna vaccine remained 92% effective at preventing COVID-19 hospitalizations. But the equivalent figure for the Pfizer vaccine was 77%.
The results were published in the CDC’s Morbidity and Mortality Weekly Report.
Both the Pfizer and Moderna vaccines are based on mRNA technology, which delivers temporary instructions to the body’s muscle cells that help it learn to recognize the spike protein, a key part of the coronavirus’ structure. But “they’re actually not necessarily interchangeable,” said Dr. Timothy Brewer, a professor of medicine and epidemiology at UCLA.
Each vaccine is formulated and administered differently, Brewer said, and those differences could affect the strength and duration of the two vaccines’ protection.
Moderna’s shot contains 100 micrograms of vaccine, more than three times the 30 micrograms in the Pfizer shot. And Pfizer’s two doses are given three weeks apart, while Moderna’s two-shot regimen is administered with a four-week gap.
Brewer also pointed to evidence that the Moderna vaccine seemed to elicit higher levels of a key antibody than the Pfizer vaccine.
“We know from other studies the neutralizing antibody levels will decay over time, so starting at a higher level will mean that you have farther to go before you decay to a point where efficacy drops off,” he said.
Dr. Robert Murphy, who directs Northwestern University’s Institute for Global Health, said the Pfizer vaccine’s reduced protection against severe disease may bolster the case for boosters for all who got the vaccine, not just the specific groups identified by the FDA advisory panel.
“Based on the data I have seen, persons who received the Pfizer vaccine would benefit from a booster dose at this time,” he said. “I don’t see why we have to wait until the younger people get sick and become hospitalized.”
But Dr. Arnold Monto, who chairs the FDA advisory panel, applauded the agency’s willingness to withhold a full-throated call for boosters until a stronger case can be made. And he suggested that as more evidence accumulates, boosters for all might still get the nod.
“That’s the beauty of the emergency use authorization,” said Monto, an epidemiologist at University of Michigan. “It can be changed based on changing data.”
This story originally appeared in Los Angeles Times.
CN Rail to slash capital spending, resume stock buybacks as shareholder battle looms – The Globe and Mail
Canadian National Railway Co. has moved to fend off a battle for control of the company’s boardroom, rolling out a list of investor-friendly plans Friday that includes share buybacks, layoffs and reduced spending.
CN unveiled the changes, including the sale of non-rail businesses and other steps intended to boost profit and improve productivity, as it defended its actions in the failed takeover of U.S. railway Kansas City Southern.
CN’s announcement came less than a day after its second-largest investor, TCI Fund Management, gave the company 21 days to call a shareholder meeting at which TCI plans to oust CN’s chairman, chief executive officer and two directors.
Mathieu Gaudreault, a CN spokesman, said the company received TCI’s meeting requisition notice and will respond later.
British billionaire Chris Hohn, who owns TCI, said CN is poorly run by people with little or no rail experience. Mr. Hohn said the failed attempt to buy Kansas City Southern underlined CN’s “flawed decision making” and “a basic misunderstanding of the railroad industry and regulatory environment.”
Ben Walker, a partner in TCI, dismissed CN’s Friday announcement as “reactive” and said it does not change the plans to wage a boardroom fight. The dissatisfaction with CN’s leadership precedes the failed KCS bid, he said, pointing to CN’s underperformance in recent years compared with its rivals.
“A lot of the things they’re doing should have been done already as part of a continuous improvement plan and efficiency optimization,” Mr. Walker said by phone. “We’re hopeful that shareholders will vote for our slate of independent, high-quality nominees.”
KCS agreed to a cheaper bid from rival Canadian Pacific Railway Ltd. and is awaiting regulatory approval.
On a conference call with analysts Friday, CN executives defended their handling of the KCS bid and said the company’s management and board were the best people to lead the company.
“We have the right leadership team and management team to execute our strategic plan, both in the short term and the long term,” said Jean-Jacques Ruest, CN’s chief executive officer. “We have a vision for the industry which is forward-looking, not backward-looking.”
Mr. Ruest said the non-rail businesses that could be sold or shut down include its Great Lakes commodity ships, freight forwarding business and Winnipeg trucking company TransX Group, which CN bought in 2019.
“There is no sacred cow at CN,” Mr. Ruest said on the call. “Do they fit in the long-term strategy? Do they also contribute to feeding the beast or bringing business to the railroad?”
CN said it will eliminate 650 management jobs and 400 unionized positions in train operations.
Walter Spracklin, a Royal Bank of Canada stock analyst, said CN’s “strategic refocus” was inevitable.
“It is clear to us that CN’s operating efficiency has deteriorated over the past several years and the company has gone from industry leader to industry laggard,” Mr. Spracklin said. “That said, as an early pioneer of [precision scheduled railroading], we believe the company has the potential to achieve … efficiency levels that are among the best in the industry.”
TCI’s nominees to CN’s board include former CN and Union Pacific Railroad executive Jim Vena as CEO.
The US$40-billion hedge fund, launched in 2003 by Mr. Hohn, owns more than 5 per cent of CN’s shares, worth about $4-billion. TCI is also the largest owner of CP shares, at 8 per cent, and owns almost 3 per cent of Union Pacific.
In 2008, TCI led a boardroom fight at U.S. railway CSX Corp., replacing four of 12 directors.
Among the steps CN announced Friday:
- Resuming share repurchases to reach $1.1-billion by the end of January, 2022;
- Increasing shareholder returns, including share buybacks of $5-billion for 2022;
- Replacing two directors in 2022, including chairman Robert Pace, whose planned retirement was previously announced;
- Improving the operating ratio, which compares sales with costs, to 57 per cent; and
- Increasing train length and speed.
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