Anne-Marie Fischer, Author at Green Market Report

Anne-Marie FischerAnne-Marie FischerNovember 12, 2018
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6min1250

Early insights reveal out-of-stocks remain elevated in Canada’s first 3 weeks of legalization

An analysis of the e-commerce platforms of Alberta, British Columbia, New Brunswick, and Newfoundland & Labrador, represented approximately 65% of the Canadian population, shows that Canadians are taking full advantage of the products available from their provincial retailers.  

The report released by Cowen & Co.’s  Vivien Azer focused on the issue of out-of-stock rates as Canada falls deeper into its market shortage following legalization on October 17 while providing an up-to-date profile on the who and what of legal cannabis from Health Canada.  

The Out-of-Stock Issue

Out-of-stock levels across suppliers show that the product shortage is nothing to scoff at, as supply fell far short of the demand for Canadians accessing legal cannabis immediately after legalization took effect.

Overall, out-of-stock levels remain flat from the prior week at 57%. For Canopy Growth (NYSE: CGC), out-of-stock rates fell to 54% from 65% in the prior week. Tilray’s (TLRY) out-of-stock rates remained flat. Aphria (APHA), which is still recovering from dips in its inventory levels, continues to see out-of-stock rates climb.

Canopy and Tilray Rate an Outperform

Canopy Growth, which had the second highest number of products offered (169 SKUs), rated an outperform with an C$82 price target.

Tilray’s product SKU data was not able to be obtained because the company doesn’t have supply agreements with three of the four analyzed provinces. Tilray also rated an outperform at a C$172 price target.

Market Leading Products

Azer notes that in the provinces examined, loose leaf cannabis is making up 80% SKUs noting that this is likely due to the unavailability of other products like concentrates on the legal market. High-THC flower, made of 20% THC or higher, and oil-based products measured at 20 mg/ml, are proving to be popular products for both offerings and consumer take up. While the purchase of flower (i.e. bud) is most common, pre-rolls are also proving popular with the out-of-stock levels increasing for these particular products; out-of-stock rates for pre-rolls outweigh those of flower.

With the rise in popularity of CBD, out-of-stocks for these products rose to 100%; CBD-focused and CBD-balanced products were sold out at 67% and 61% respectively.

The report noted that oils and capsules make up only 8% of SKUs on the market with these out-of-stock rates climbing faster than other categories.

Capsules carry the highest out of stock rates 75%, but this data is based on a small sample.

The Price Factor

Azer notes that 70% of flower SKUs are priced at $11, while the data is showing that people are willing to pay more for premium pre-rolls, at the equivalent of $10 per gram. Products in the higher end price range (up to $20/pre-roll) are proving to be bigger sellers than those of a lower price category (as low as $12/pre-roll).

As Canada adjusts through its growing pains, we can expect firms like Cowen & Co. to keep a close eye on the who, what, and how much of Canadian cannabis.

Profile of Canadian Cannabis Users

Azer’s report revealed some interesting statistics from Health Canada about cannabis use amongst Canadians. It’s showing a decline in use among 15-19-year-olds by 7%, while use among 20-24 and 25+ is increasing. At the same time, alcohol use among these latter two groups is decreasing.

Females are trailing men at 11% in reporting instances of cannabis use, in comparison to 18% of men, but that gap is beginning to close as more women turn to cannabis. Interestingly, alcohol use among women is on the increase along with a reported increase in women using cannabis.

More incidences of cannabis use were reported in British Columbia over any province; with Ontario falling slightly under the provincial average, and Quebec reporting the lowest incidences of cannabis use in the country.

 


Anne-Marie FischerAnne-Marie FischerNovember 9, 2018
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7min3250

“Beverage companies are already placing bets on cannabis-infused beverages,” says Ryan Smith, CEO of LeafLink, and industry-leading B2B e-commerce platform, “They present an exciting new frontier.”

While places like Canada have started off slow in allowing regulated products into the market, places like California have an already thriving infused food and beverage market, with products like colas to infused drops to kombuchas to functional beverages flying off the shelves and into the hands of the health-conscious consumer.

A Notable Rise in Popularity

Infused-beverages sales in legal states are on the rise and are demonstrated by year over year results. Flowhub, a POS company, has indicated that beverage sales have increased 88% year over year from 2016 to 2017, with that trend seemingly continuing in 2018. When Flowhub compares data from the first half of 2018 against data from the second half of 2017, beverage sales have increased 18%.

According to LeafLink, these are the industry leading beverages:

  1. Pearl 20 Minis by Tarukino in California
  2. Sprig Lemon Tea 20mg CBD & Sprig Original 10mg THC by Sprig in California 
  3. Orange Kush Soda 10mg by Keef Cola by K.I.N.D. Concentrates in Arizona
  4. 100mg Passionfruit by HIGHDRATE by Evergreen Herbal in Washington
  5. “Yippee Ki-Yay” – High Energy Blend Drops by ZOOTS by Bronnor in Colorado
  6. “Waking Giant” – 10 mg (Sativa) by Mirth Provisions in Washington

“Purchasing trends on our platform have shown an accelerating shift toward branded, consistent products that resemble recognizable consumer packaged goods,” says Smith of the growth in popularity in cannabis-infused beverages. “They are incredibly discreet, hide the taste of cannabis well, and provide a fast-acting dosage without the guesswork of a typical edible,” adds Smith.

A Health-Conscious Driven Demand

Move over kombucha! As a representative for mood33, a cannabis-infused “functional beverage” herbal tonic company says, “We know that the modern consumer is actively searching for ways to reduce their alcohol consumption and the adverse effects that come with overconsumption, drunk driving, and hangovers.”

“Once consumers realize that cannabis can be consumed like an alcoholic beverage via products like mood33, we will see even more demand for cannabis beverages – as we expect the cannabis beverage category to consist of 20-25% of the overall market share within the next 5-7 years due to these developments and elements of market/category maturation,” mood33 adds.

The news has been rife with beverage companies eyeing the cannabis market, with the likes of Coca-Cola and now Pepsi moving in on the promises for infused beverages. Earlier this year, Constellation Brands (STZ) made a huge investment into Canopy Growth Corp (CGC) that Moody’s referred to as a speculative bet.

These investments and partnerships “have brought tremendous awareness to the nascent cannabis beverage category, and we predict every sophisticated cannabis company will have a cannabis beverage program in the coming years,” says mood33.

mood33 is hyper-focused on providing a cannabis beverage consumption experience for everyday people: the stressed-out soccer mom, the overworked professional, the sore runner, and the health & wellness/fitness maven.

The Global Future for Cannabis-Infused Beverages

The deals being made between cannabis and food and beverages industry big-wigs are something to pay attention to. While cannabis-infused beverages are not permitted in Canada’s legal market yet, these deals indicate that cannabis-infused beverages can have a global demand outside of established legal markets.

“There is great opportunity for the Canadian industry to offer a wider variety of products to serve patients and consumers with different preferences, while capitalizing financially,” says LeafLink’s Ryan Smith, “The demand for non-smokable product categories like beverages will only increase as long as people pursue the wellness benefits of cannabis.”

As for mood33’s plans, they want to see cannabis-infused beverages hit the mainstream: “we are eager to help develop a national framework where manufacturers and marketers can develop mainstream inspired, regulated cannabis food and beverage products that could one day sit on a Whole Foods shelf.”

 


Anne-Marie FischerAnne-Marie FischerOctober 31, 2018
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9min4530

Cannabis could be the issue that tips the ballots towards certain candidates around the U.S. as the country heads into mid-term elections on November 6.

Up for vote will be all 435 seats in the House of Representatives, 35 of the 100 seats in the U.S. Senate, 39 state governorships, and various state and local elections as Americans exercise their democratic right of the vote.

Many are calling these elections the “tipping point” for cannabis, with 4 states going to vote on major cannabis laws, and cannabis measures showing up on local ballots across states. As an example, California itself, which legalized cannabis recreationally earlier this year, will still have 82 ballot measures across the state related to cannabis.

Not sure about your state? Green Market Report offers Bill Track 50, a state-by-state overview of the bills across each U.S. state.

Major Changes for 4 States

The whole country will have their eyes on four states who may or may not join the 30 states who have legalized medical cannabis and 9 states (plus Washington, D.C.) who permit recreational cannabis.

On November 1 in Michigan, Proposal 1 will show up on the ballots across the state. Proposal 1 is worded as follows: A proposed initiated law to authorize and legalize possession, use and cultivation of marijuana products by individuals who are at least 21 years of age and older, and commercial sales of marijuana through state-licensed retailers. Proposition 1 would allow the purchase and possession of cannabis for adults over 21, and will allow cultivation of up to 12 plants for personal consumption. The Proposition also includes a 10% excise tax dedicated to implementation costs, clinical trials, schools, roads, and municipalities where marijuana businesses are located. 

Having failed to implement the medical cannabis laws in 2016, North Dakota is going full stop on their path to legalize cannabis across the board. Proposition 3 legalizes the use, sale, possession, and distribution of marijuana for anyone 21 years or older.  For anyone under the age of 21, the law creates a new specific subset of non-felony penalties. Additionally, the law legalizes “paraphernalia” for marijuana exclusively. Finally, records are expunged for anyone that followed the new law even if it occurred in the past, except for cases of someone being under the age of 21. The Proposition focuses heavily on the harmful effects of alcohol and opiate abuse in comparison to cannabis and seeking a relief of cannabis-related penalties.

In a previously conservative cannabis state, Utah is finally moving to legalize medical cannabis through Proposition 2. Led by the grassroots Utah Patients Coalition (UPC), there was enough signatures collected to add medical cannabis to the ballots for this November across the state. Proposition 2 namely seeks to protect terminally and seriously ill patients with specific debilitating medical conditions from arrest and prosecution if using medical cannabis pursuant to their doctor’s recommendation as well as allow a patient who needs assistance to designate a caregiver to help the patient to obtain and administer their medication among other cannabis-related rights unseen before in the state.

Finally, Missouri is also adding medical cannabis to the ballot. In the state, voters will be able to choose from several different medical cannabis measures that will appear on their ballots. All three measures would provide general legal protections to patients and create regulated systems of cannabis production, processing and retail sales. One proposed constitutional amendment would allow medical cannabis doctors to recommend cannabis for any medical condition to see fit. Another constitutional amendment limits doctors to prescribing per a list of qualifying conditions. Another statutory amendment would tax medical cannabis at 2% while limiting cannabis prescriptions to qualifying conditions. Ballot measures like these allow citizens to vote in the more conservative state to levels where they are more comfortable. Baby steps, right?

Other States to Watch

The gubernatorial race in Florida may determine the outcome of the future of the legalization of recreational cannabis in the Sunshine State, following a strong emergent medical legalized market. Both governor candidates Andrew Gillum and Ron DeSantis may not have similar ideas when it comes to health care, climate change, and gun control, but they both aren’t opposed to full cannabis legalization, with Gillum being more fervent in his support.

Voters in 16 counties around Wisconsin will see a question on their ballot regarding cannabis policy similar to “do you believe that marijuana should be legalized and regulated like alcohol?”, which will possibly forward cannabis progress within the state.

6 municipalities in Ohio – Dayton, Fremont, Garrettsville, Norwood, Oregon, and Windham – will be able to vote on the decriminalization of cannabis.

Engaging Youth Through Cannabis Laws

This year, cannabis has been put on the table yet again in big ways and is proving to be a strategy to engage young voters. These elections are pretty monumental, actually, because for the first time Millennials will surpass Baby Boomers as the largest generation eligible to vote. There are 8 million more voters eligible in the USA to vote now than there were when President Donald Trump was elected to office.

Young voters are said to be what can tip the election, as long as they get to the ballot box.

With 2 in 3 people or 66% of people now supporting the legalization of cannabis in the United States, we could expect to see a pro-cannabis result come in across the board as individual states administer their midterm election votes.

Become Informed on Cannabis Progress in Your State

Two helpful resources have been designed to help people understand the cannabis initiatives happening within their state.

Green Market Report offers Bill Track 50, which is an up-to-date, state-by-state overview of the bills being supported across each U.S. state. The interactive map allows you to click on each state to see that state’s trending bills, along with an up to date accounting of actions on the bill and a list of sponsors.

The National Cannabis Industry Association has released a Congressional Scorecard that shows state-by-state the voting history of members of the House of Representatives on marijuana-related appropriations amendments that were considered between 2014 and 2016 as well as identifying cosponsors of the legal cannabis industry’s priority legislation in both the House and Senate.

Cast Your Vote

Voters have a democratic choice on which side of the cannabis movement they choose to be on. My Bookie.ag is an online sportsbook where people wager more than just sports bets but also weigh in on important political and legislative issues as well. The platform was excited to announce that their online community bet 2 to 1 that cannabis would be federally legalized by 2020 in the United States.

Your important vote on November 6 can get the country one step closer.


Anne-Marie FischerAnne-Marie FischerOctober 29, 2018
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3min3460

As everyone who owns a cannabis retail store knows, compliance is key to running a successful legal cannabis business, and tech companies have seriously stepped up to make compliance a seamless process.

Metrc, is a well-known seed-to-sale traceability platform that helps cannabis companies manage their inventory and the movement of cannabis products through the supply chain. Operating in Colorado, Oregon, Alaska, Maryland, Michigan, Ohio, Massachusetts, Montana, Nevada and Louisiana, and Washington, D.C., Metrc helps fulfill state reporting requirements and has become known as the “de facto track-and-trace system” for government entities that regulate the legal cannabis markets.

Metrc announced its first outside round of funding in the form of $50 million from Tiger Global Management and Casa Verde Ventures, the 3-year-old, cannabis-focused venture firm co-founded by notorious cannabis enthusiast and investor Snoop Dogg, but managed largely by Goldman Sachs and Nomura Securities alum Karan Wadhera.

The partnership between Tiger Global Management and Casa Verde Ventures, where each entity “shares deal flow quite regularly”, funded Point of Sale software company GreenBits, which is designed to integrate into seed-to-sale systems like Metrc.

Metrc was formerly part of Franwell, focusing on cold chain management and fresh foods, which helped gain the supply chain management knowledge and expertise needed to transition into seed-to-sale traceability for cannabis.

Metrc CEO Jeff Wells says that the over 100-employee company plans to “look to expand our regulatory focus,” with the $50 million investment, including potential expansion into “other regulated markets and products that need the type of tools that Metrc has created.”

“Compliance is the backbone of the cannabis industry. If a license holder isn’t compliant, their business will cease to exist,” said Karan Wadhera.

 


Anne-Marie FischerAnne-Marie FischerOctober 18, 2018
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5min4310

As the clock rolled onto 12:00 am in Newfoundland, eager cannabis users lined up around city blocks as the first legal cannabis was sold within the country of Canada on legalization day, October 17.

Cannabis is now legal for production, sale, consumption and personal growing in Canada, but early critics of Canada’s legalization warn that we should be wary of the “green rush”.

Rollercoaster Stocks

Shares of Canadian companies Canopy Growth (CGC), Cronos (CRON), and Tilray (TLRY) have been soaring all year, but saw a plunge on Wednesday with the turn of legalization, causing critics to warn that the hype doesn’t meet the promise for profits.

Other stocks such as Aurora Cannabis (ACBFF), and Aphria (APHQF) took a plunge in light of recent news that big consumer products like Coca-Cola and Marlboro respectively have been poking their noses into cannabis looking to cash in.

Despite estimates that Canada’s recreational market could be worth $4.3 billion within the first year, critics scoff at the idea that the cannabis boom is akin to the dot-com boom of previous decades. Paul Rosen, CEO of Cronos joked to CNN earlier this week that not every cannabis company will become the Google of cannabis; with some having to settle for Ask Jeeves status.

Customer Feedback on Pricing

“An eighth cost me $56!,” said Emily, who logged on early on Wednesday to the Ontario Cannabis Store’s online shop. “The prices alone may keep me in the grey market”. Another Ontario consumer purchased 2 (yes, only two!) pre-rolled joints for $30. While there is certainly a privilege of purchasing legal cannabis, the high pricing and Harmonized Sales Taxes make a “dime bag” feel more like a hefty investment.

Of course, one of the goals of The Cannabis Act is to stamp out the black market and ensure that “keeps profits away from organized crime”, as Prime Minister Justin Trudeau puts it.

It was recently announced to Access to Cannabis for Medical Purposes (ACMPR) patients that prices for medical cannabis would go up by $1 per gram (or the equivalent of 10% of the purchase price) and would be subject to higher taxation. Licensed Producers like Emblem are working to resolve these issues to make cannabis remain accessible to ACMPR patients.

Product Shortages

Winnipeg’s Delta 9 cannabis store reported that within the first minute of online sales, there were 100 orders and that sales for the day totaled $50,000. Products sold out within the first few hours.

“[All cannabis is] all sort of spoken for across the entire country,” said Living Skies Cannabis, a Saskatchewan-based retailer who was ready to open their doors, but had no inventory to offer customers.

The Alberta Liquor and Gaming Commission’s website was so overloaded that it failed to load for some consumers, with 11,000 customers in the queue waiting to purchase cannabis at one time. The platform had to tweet that they’d be back up and running soon.

For the largest consumer province in Canada, Ontario Cannabis Stores’ website ran smoothly, but consumers saw the availability of products dwindle throughout the day.

It was estimated just days before legalization that Canada’s cannabis supply could meet only 30-60% of demand, causing the black and grey markets to continue to thrive as people continue to get cannabis from their pre-legalization sources.

Time to Iron out the Kinks

We’ve gotten through the first day of legal cannabis in Canada. This is the dawning of a new Canada, where certain privileges are granted, while others are taken away. It may be a while before we can properly assess the social and economic impact of legal cannabis in Canada, but at least this is a start.

 


Anne-Marie FischerAnne-Marie FischerOctober 17, 2018
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9min6980

It’s been gracing the front of almost every newspaper, on the tongues of this year’s political candidates, and becoming the topic of choice around the water cooler: The end of cannabis prohibition in Canada has finally come.

Canada is now the first G7 country to legalize cannabis on the federal level, making it legal to sell cannabis across the country to adults over the age of 19 (or 18 in Quebec and Alberta).

Cannabis has been under prohibition in Canada since 1923 when it was included in the Narcotics Drug Act Amendment Bill, and later in the Act to Prohibit the Improper Use of Opium and other Drugs. Rising in popularity in Canada in the 1930s and experiencing a resurgence in the 1960s, Canadians have been fighting for the decriminalization of cannabis since 1972.

Canada never decriminalized cannabis.

Cannabis was made legal for medical purposes in 2001 with the passing of the Marijuana for Medical Purposes Regulations, evolving into what is now known as the Access to Cannabis for Medical Purposes Regulations (ACMPR). It wasn’t until Justin Trudeau took the office of Prime Minister in 2015 that the legalization of cannabis was on the table, and Bill C-45 or “The Cannabis Act” passed in Canada’s Senate on June 7, 2018.

As of today, it is now legal to purchase, grow, and use cannabis in Canada.

What does this mean for Canada and the lives of every day Canadians? Here are some important aspects of what Canada’s legalization truly means for Canada and its citizens:

Purchasing Legal Cannabis

While all Canadians will be able to log on to their respective provincial government’s sales portal, not all Canadians will have the opportunity to visit a brick and mortar shop today. For instance, in Ontario where Doug Ford recently reversed the Liberal’s position on keeping cannabis in the public realm, there will be no brick-and-mortar stores where there was once the promise of 40+ Ontario Cannabis Stores. In Northwest Territories, there will be no legal cannabis stores open amidst concerns of the potential for cannabis addiction.

Age to Purchase Cannabis

In every province other than Quebec and Alberta, the legal age to purchase cannabis is 19 (18 in the aforementioned provinces). Recently, as Quebec changed the provincial government, there have been threats to raise the legal purchase age in Quebec to 21 amidst growing concerns about the age to purchase legal cannabis being too low, in light of the fact that the human brain is still in development until the age of 25.

Possession of Cannabis

As of today, all adults who are legal to purchase cannabis may possess up to 20 grams of legal cannabis, dried or in equivalent non-dried form. You may also share (but not sell) up to 30 grams with another person. According to the Government of Canada, 1 gram of cannabis is equivalent to: 1 gram of dried cannabis, 5 grams of fresh cannabis, 15 grams of edible product (although edibles won’t be sold in Canada yet), 70 grams of liquid product, .25 grams of concentrate, or 1 cannabis plant seed.

Federal law does not limit the amount of cannabis that may be possessed within a single private home.

Growing Cannabis

As of today, every household in Canada will be able to legally cultivate up to 4 plants for personal use, with the exception of Manitoba and Quebec. In British Columbia, it’s law that plants must be hidden from public view. The right to cultivate up to 4 plants per household cannot be transferred from one household to another.

International and Domestic Travel

There’s been a bit of a back and forth about the issue of Canada-U.S. border crossings, and there had been a strong threat that would disallow any workers from the Canadian cannabis industry from entering the U.S. Last week there was a bit of a relief as it was announced that workers would “generally” be allowed to enter the U.S., as long as they didn’t have a history of use with the plant. The issue of denying anyone who has ever used cannabis is still a topic of debate.

Domestically, while it’s forbidden to pack bags of cannabis in a plane’s cargo, each person can legally fly within Canada with 30 grams of cannabis.

Driving Under the Influence of Cannabis

Canadians who use cannabis better be prepared to follow similar practices to driving while under the influence of alcohol. Driving under the influence of cannabis has become a hot topic within Canada’s law enforcement, as well as a heated human rights issue as Canadians feel stigmatized and punished for cannabis use.

According to Canada’s Department of Justice, those who are caught driving a motor vehicle with 2-5 nanograms of THC in their system could face a maximum fine of $1,000. If caught with over 5 nanograms, it’s a mandatory $1,000 fine for the first offense, a mandatory 30 days imprisonment for a second offense, and a mandatory 120 days imprisonment for a third offense.

The Dawning of a New Era?

Some early and current critics of Canada’s legalization see the confines of legal cannabis in Canada to be echoing of prohibitionist sentiments. We will have to wait to see how legal cannabis in Canada unfolds, as truly, it’s something this country is new at, truly, all Canadians are completely unsure of how it will turn out.

Let’s just take a collective deep breath in of our legal cannabis, and hope for the best.

 


Anne-Marie FischerAnne-Marie FischerOctober 12, 2018
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4min5910

Leamington, Ontario based Licenced Producer Aphria (APHQF) is reporting a solid start to the fiscal year 2019, and a 35% increase in grams sold in Q1-2018, despite some recent labor pool-related setbacks that resulted in a “rebalancing of inventory”.

Aphria reported revenue for the three months ending August 31, 2018, at C$13.2 million, representing a 10% increase over the prior quarter’s revenue of C$12 million and a 117% increase over the same period of 2017, which was C$6.1 million. They attribute this growth in revenue to an increase of wholesale orders and 100kgs of dried cannabis and cannabis oil that was sold to third-parties for clinical trial purposes.

Not all reports by Aphria were positive, showing a loss in the first quarter of 2019 due to a labor shortage in Leamington, Ontario. The first quarter of 2019 saw an adjusted gross margin of 63.6%, with an adjusted gross profit of C$8.4 million, compared to C$9.4 million with an adjusted gross margin of 78.7% in the prior quarter.

During this period, Aphria had to make the decision to dispose of 13,642 plants prior to harvest due to a “lack of qualified local labor”, leading one week’s crop rotation in the Aphria One greenhouse to outgrow its optimal harvest period. Without labor to harvest the plants, the company made the tough call to dispose of the affected plants to ensure that the next week’s harvest would be grown in optimal conditions.

Aphria acknowledges that had this loss not occurred, the gross profit margin would have been higher. This incident prompted Aphria to go on a hiring streak, doubling their greenhouse staff for their planned expansion to be fully operational by the end of Q2-2019.

Net income for the three months ending August 21, 2018 was C$21 million or C$0.09 per share as opposed to C$15 million or C$0.11 per share in the prior year, with the company attributing this increase to their long-term investment portfolio, including their investments in Liberty Health Sciences and Hiku Brands Company Ltd, as well as an increase in value of biological assets as a result of expansion projects.

Earlier this week, Aphria was in the news as rumors that tobacco giants Altria (makers of Marlboro cigarettes) were in talks with Aphria for a partnership, which Aphria later denied. “That there is no agreement, understanding or arrangement in place with a potential investor at this time. Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements,” they said in a statement.

This morning, Aphria invited those interested to attend a conference call, for which an audio replay will be available until November 9. For more information visit www.aphria.ca.

 


Anne-Marie FischerAnne-Marie FischerOctober 12, 2018
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3min3500

Earlier this week Cresco Labs LLC announced plans for a reverse takeover of Vancouver-based Randsburg International Gold Corp [NEX: RGZ.H], a move that will allow Cresco to go public and seek approval to list its common shares on the Canadian Securities Exchange (“CSE”).

The proposed takeover will be structured as an amalgamation, arrangement, takeover bid, share purchase, or similar form of transaction. The transaction will require Randsburg to change its name to Cresco Labs Inc, consolidate its outstanding common shares, replace all directors and officers of the company with those nominated by Cresco, and create a new class of non-participating super voting shares that will be issued to certain principals of Cresco.

“The Canadian market has been very supportive of the U.S.-based cannabis companies and we look forward to having expanded access to capital that will help us accelerate our strategic growth plan,” said Cresco’s CEO Charles Bachtell.

Cresco is currently operating in six states as a cultivator, processor and distributor. They are responsible for bringing some of the most recognized cannabis brands to market, including Cresco (elevated everyday cannabis), Mindy’s Edibles, RESERVE, and remedy.

Earlier this month, Cresco announced that they recently closed a funding round that resulted in $100 million in capital, that will be used to expand to the 31 states that offer some form of legalized cannabis program. “This capital raise demonstrates our commitment to growing our national footprint and establishing dominant brand presence in key markets across the country,” Bachtell said of the recent fundraising success.

Cresco is one of the largest cannabis companies in the United States, with operations in Illinois, Ohio, Pennsylvania, Nevada, California, and Arizona. Cresco prides itself not only on its operations and brands, but also the education programs that aim to provide customers and physicians with information on cannabis in a straightforward and intuitive way.

Further details on the reverse takeover of Randsburg by Cresco will be included in a subsequent listing statement to be prepared and filed with the Canadian Securities Exchange and in subsequent news releases.

 


Anne-Marie FischerAnne-Marie FischerOctober 3, 2018
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5min1840

PRØworks brings new leadership that brings “cannabis from the black market to the supermarket”

PRØHBTD, which markets itself as the “premier online destination for modern cannabis enthusiasts” has just announced a new consulting arm PRØworks, that brings a heap of experience from the mainstream CPG and entertainment worlds to the table.

PRØHBTD has been recognized for producing digital and online content and representing over 60 of the cannabis industry’s most recognizable brands like Defonce.

“Our company’s mission is to bring cannabis from the black market to the supermarket,” said PRØHBTD CEO Drake Sutton-Shearer, “This requires enterprise-ready capabilities that business leaders can engage with to help them understand the complex and challenging world of cannabis”

This new arm of their company brings four notable executives to the consulting team of PRØworks, creating a wrap-around consulting strategy for brands they work with.

Craig Binkley, a veteran of Coca-Cola with a strong portfolio of global work will help companies understand the cannabis consumer, product, and market to inform and support their strategic initiatives. He specializes in transformational marketing that will undoubtedly bring an asset to PRØHBTD clients as they navigate how to reach the modern cannabis consumer among strict marketing regulations.

Leading PRØHBTD’s finance team and strategic mergers and acquisitions initiatives are Frank Carrère, former SVP of corporate development at 21st Century Fox and CFO/COO at Fun Technologies. His experience in scaling businesses has contributed to a 20x exit for its investors through a Canadian public listing and is motivated to bring this to PRØHBTD.

Glenn Frese is working with PRØHBTD to help brands build digital and physical marketing programs to connect cannabis brands to global audiences. He brings experience as a former executive at Sony, Maker Studios, and Disney where he has overseen digital and traditional marketing, social media, and direct to consumer initiatives. Frese will oversee all aspects of consumer and B2B marketing, social media, content marketing, events, strategy and lead generation for PRØHBTD and its PRØworks clients.

Stepping into the role of Executive Producer at PRØHBTD is Gary Bryman, who will produce on-demand videos through the PRØworks division called RØCKET. He brings over 20 years of Hollywood production experience, successfully executing of creative content including content for Disney, Universal, MTV, ABC, NBC, Netflix, and ads for Super Bowl XXXVII.

In June, PRØHBTD announced plans to go public in Canada after raising $12 million through fundraising, following acquiring seed funding totaling $4 million. The company planned to invest their funds into content creation and staffing, which includes this new announcement of hiring these notable executives to represent PRØworks and the PRØHBTD brand.

“We are honored to have these fantastic new folks join us in our journey as we continue to accelerate the mainstreaming of cannabis through audience, content, and products,” says Sutton-Shearer.

Content from PRØHBTD is syndicated across 15 different networks, including Apple TV, Roku, Amazon, Android TV, Dailymotion, allowing cannabis brands to reach 100 million consumers.


Anne-Marie FischerAnne-Marie FischerSeptember 26, 2018

3min3410

We know by now that customers in cannabis retail stores have come to expect loyalty programs, but how are the results actually stacking up in terms of profit?

Recent data provided by SpringBig is revealing the impact of loyalty programs on cannabis retail store customer traffic.

“Smart campaigns that drive store traffic are the single-most effective method to drive increased sales and positive ROI,” says SpringBig CEO Jeff Harris. SpringBig provides loyalty program technology to the cannabis industry, tapping into the point of sale systems like MJFreeway and Green Bits.

Data offered by three cannabis retailers by SpringBig shows insights into the best strategies that have customers signing up for loyalty programs, and actually ensuring they’re coming back.

Uncle Ikes, a Seattle-based retail chain has found that loyalty customers visit 2.4 times more than non-loyalty customers and spend on average $194 in a 6-month period on cannabis purchases. In addition, they spend $25 more per transaction than non-loyalty members.

“Leveraging behavior-based, trigger-based communication ensures that the right message is getting to the customer at the right time,” says Harris.

Remedy Columbia or Maryland uses SMS messaging to reach their loyalty members and found that loyalty members visit 5x more than non-loyalty programs. They report loyalty members spend an average of $150 more than non-members in a 6-month period while spending $10 more than non-members in a visit.

Las Vegas’ Releaf reported loyalty members spend twice as much, $150 more in a 6-month period, and $10 more per transaction than non-loyalty members.

The key to loyalty programs? “Giving members access to a store or chain’s special offers before the general public sees them while being guaranteed best pricing on all specials,” says Harris.

“Being able to offer bonus points for certain product categories and/or brands provides the member with the ability to purchase certain products and earn additional reward currency that they can redeem for free or at a discounted price,” he further explained.

What should be avoided? Points Per Visit programs, according to Harris. “Awarding points per visit versus per dollar spent does not allow the store to properly manage their loyalty program budget and measure ROI,” he said.



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