Editor-in-Chief

Debra BorchardtDebra BorchardtSeptember 17, 2020
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4min10

The House will postpone the much-anticipated vote on HR 3884: The Marijuana Opportunity, Reinvestment, and Expungement Act, commonly referred to as the MORE Act. The cannabis legislation became the target of politicization causing sponsors to pull the vote. Earlier this week, Senate Majority Leader Mitch McConnell took a swing at House Speaker Nancy Pelosi, claiming that she wouldn’t “make time for more COVID relief,” but that she would “make time for marijuana.” The legislation, which has Republican sponsors, suddenly became a toxic subject.

It is now expected to be voted on in November. NORML noted that in the past few weeks, the MORE Act had gained dozens of new co-sponsors and likely had the support to pass the House floor with a bipartisan majority vote.

NORML Political Director Justin Strekal said, “This delay by the House does not change the fact that the overwhelming majority of voters support ending the federal prohibition of cannabis, including majorities of Democrats, Independents, and Republicans. This delay does not change the fact that 33 states and the District of Columbia regulate the production and distribution of medical cannabis in a manner that is inconsistent with federal policy, and that one-out-of-four Americans now reside in jurisdictions where adult-use is legal under state law. This delay does not change the fact that voters in several states, including key electoral battleground states for both control of the Presidency and the Senate, will be passing similar state-level marijuana measures on Election Day.”

Maritza Perez, Director of the Office of National Affairs at the Drug Policy Alliance (DPA) said, “Unfortunately, this decision means justice delayed for millions of Black, Latinx, Indigenous and low-income individuals disproportionately impacted by our country’s racist marijuana laws. We cannot continue to force these communities to wait for a ‘politically convenient’ moment while they continue to be robbed of employment opportunities, housing, education, other government programs, and even their children or immigration status.

If members of Congress are serious in their commitment to responding to calls for racial justice, then this vote must take place the moment the House is back in session following the elections. Even with just a six-week delay, approximately 77,000 more people could be arrested on marijuana charges, based on current averages – most of which could have been avoided.”

The MORE Act would:

  • Decriminalize marijuana federally by removing cannabis from the Controlled Substances Act
  • Facilitate federal expungements for minor charges and incentivize state and local governments to do the same
  • Create pathways for ownership opportunities for local and minority entrepreneurs
  • Allow veterans to obtain medical cannabis recommendations from their VA doctors
  • Remove the threat of deportation for immigrants

Debra BorchardtDebra BorchardtSeptember 17, 2020
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4min990

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) waiting until the market closed on Wednesday before telling shareholders it picked up another $20 million from lenders and institutional investors. The deal for MedMen includes 10 million in gross proceeds under a new unsecured convertible facility, plus $5.7 million under its senior secured term loan led by Stable Road Capital and $5 million under its senior secured convertible facility led by Gotham Green Partners.

Just what will this cost? It’s not too far from getting an extremely big credit card. The principal amount of the Incremental Notes will carry an interest rate of 18.0% per annum, to be paid as follows: (a) 12.0% shall be paid in cash monthly in arrears; and (b) 6.0% shall accrue monthly to the outstanding principal as payment-in-kind.

“We are pleased with the continued support from our existing capital partners as we continue our recent track record of execution,” said MedMen Executive Chairman, Ben Rose. “The financing package is a significant milestone for the company and is a reflection of the commitment the Company has made to strengthen the balance sheet, accelerate its path to profitability and sustainability, and focus on its core retail business. We look forward to continuing to expand the MedMen brand.”

On September 16, 2020, MedMen closed on an initial $1 million, and has the right to call additional tranches, totaling a million each, no later than 20 trading days from receiving each tranche. Participating lenders will receive a $468,564 fee with a conversion price of $0.20 per share, consistent with the terms of the Facility. MedMen shares were recently selling at $0.17 per share on the OTC marketplace. MedMen has said it will announce its earnings on September 28 after the market closes.

Company Update

While MedMen has struggled over its leadership problems and mountain of debt, it continues to press forward. The company recently noted that it is has 25 retail stores that are in operation across California, Nevada, Illinois, Florida, New York, and Arizona. On August 3, 2020, the City Council of West Hollywood adopted an urgency ordinance to create a new “Legacy Cannabis Business License” which will permanently allow for both medical and adult-use sales of cannabis by MedMen West Hollywood and the three other pre-existing medical operators, bringing the collaborative efforts between the City of West Hollywood and other related parties to a final resolution.

On August 6, 2020, the Massachusetts Cannabis Control Commission voted in favor of granting MedMen Boston, LLC, a subsidiary of the Company, a provisional adult-used license for its proposed flagship retail location near Fenway Park. A final license for this location is subject to meeting various conditions prior to opening, which is expected to occur in 2021.

“The positive licensing developments in West Hollywood and Boston are a result of the Company’s commitment to meaningful engagement with local regulators and the communities we are privileged to serve,” said MedMen Executive Chairman Ben Rose. “We continue forward momentum as we execute on our turnaround plan, strengthen our retail footprint and improve four-wall economics. Through our focus on retail, we have made significant progress in optimizing our business model and improving our presence as partners and neighbors in our locations as we expand the MedMen brand in existing and new markets across the U.S.”


Debra BorchardtDebra BorchardtSeptember 16, 2020
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5min1010

PharmHouse is costing Canopy Rivers Inc. (OTC: CNPOF) millions as it works to keep it afloat after the company missed its cash flow goals. The problems have led to a deterioration among the partners causing counterclaims of bad behavior. Canopy Rivers said it will act as a debtor-in-possession lender for PharmHouse and will provide up to $7.2 million in DIP financing. This will allow PharmHouse to continue its day-to-day operations throughout the anticipated restructuring. The Joint Venture Partner (2615975 Ontario Inc.) has indicated that it will not contribute financially to address PharmHouse’s near-term liquidity issues.

Canopy Rivers owns 49% in the joint venture of PharmHouse, which was formed in May 2018. The company partnered with Canopy Growth Corporation (CGC) and TerrAscend Canada Inc. which provided strong support for the company’s significant investment in PharmHouse’s automated production facility, as well as its guarantee of the PharmHouse Credit Facility.

PharmHouse has been granted creditor protection under the Companies’ Creditors Arrangement Act. Ernst & Young Inc. has been appointed by the Court to act as the Monitor of PharmHouse in the CCAA proceedings while PharmHouse explores a restructuring of its business and operations. Canopy Rivers said it views PharmHouse’s decision to seek creditor protection as an important step forward in addressing its liquidity and capital resource concerns.

Canopy Rivers said in August that PharmHouse failed to generate cash flows according to the agreed-upon timeline from the Offtake Agreements and the ultimate timing and receipt of cash flows became uncertain, creating liquidity and capital resource issues at PharmHouse.

Accusations Fly

Discussions regarding the potential renegotiation of the Offtake Agreements were unsuccessful and led to a significant deterioration in the relationship between the parties. Earlier this week, Canopy Rivers disclosed that the partner 2615975 Ontario Inc. had made a number of allegations against the it, Canopy Growth Corporation, and TerrAscend Corp. and TerrAscend Canada Inc., including claims relating to bad faith, fraud, civil conspiracy, breach of the duty of honesty and good faith in contractual relations and breach of fiduciary duty, and claims relating to PharmHouse’s offtake agreements with Canopy Growth and TerrAscend. Canopy Rivers said it considered the claim to be completely without merit and intended to vigorously defend its position at the appropriate time and in the appropriate forum.

Impairment Charges

In connection with the Restructuring, Canopy Rivers said it expects to record certain adjustments on its statement of financial position for its upcoming fiscal quarter ending September 30, 2020. In a statement, Canopy Rivers said it expects to record a full impairment charge on its investment in PharmHouse common shares, which had a carrying value of $32.6 million as at June 30, 2020. The carrying value as at June 30, 2020 reflected the cash investment of $11.0 million made by the company in July 2018 and January 2019, the value of non-cash consideration paid to the Joint Venture Partner upon the formation of PharmHouse, and the company’s cumulative share of PharmHouse’s comprehensive loss, as required by International Financial Reporting Standards.

In addition, Canopy Rivers may recognize impairment charges in respect of all or a portion of the balances relating to shareholder loans advanced by Canopy Rivers to PharmHouse, which were recorded at $50.2 million as of June 30, 2020. Furthermore, the company is a guarantor of PharmHouse’s syndicated credit agreement, which provided PharmHouse with a non-revolving credit facility of $90.0 million. If PharmHouse is unable to service its obligations pursuant to the PharmHouse Credit Facility, the company may be required to recognize a financial liability relating to its guarantee.


Debra BorchardtDebra BorchardtSeptember 16, 2020
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3min600

Cannabis technology company Akerna (Nasdaq: KERN) reported that cannabis sales over the Labor Day weekend (September 4-7) exceeded a quarter billion dollars, however, the increase was lower than previous years. Purchases jumped year-over-year by 23% to $245 million. Akerna said this included both medicinal and adult-use sales. Separately, adult-use sales increased by 35% over the holiday weekend.

Friday (September 4) saw the biggest sales day, representing a year-over-year increase of 36%. Likewise, Saturday saw a 36% increase in sales, while Sunday saw the biggest uptick with a 43% increase. Labor Day itself, however, saw an 8% decrease in sales from the previous year. It should be noted that Massachusetts does not allow sales on holidays and dispensaries in the state were closed for the day.

“Though we saw a smaller increase in cannabis sales than in previous years, that was due in part to increased cannabis sales throughout the year,” says Ryan Ballman, Business Intelligence Analyst. “Because of the COVID-19 outbreak, people are purchasing more cannabis than in previous years. Consequently, we do not see as significant a rise in holiday cannabis sales.”

Akerna gave the following additional insights:

Product Sales by Category for Fri-Mon

Flower – 47.4%
Cartridges/Pens – 29.6% (down 2%)
Concentrates – 12.9% (up 2%)
Infused Edibles – 8.3%
Other – 1.8%

Order Sales by Age Group

Under 30 – 30% (up 3%)
30 to 40 – 30%
40 to 50 – 19%
50 to 60 – 12%
60+ – 9% (down 2%)

Overall State Data

As Ballman noted, states are continuing to rack up huge numbers for cannabis sales. Newcomer Illinois collected $19.2 million in tax revenue during August on recreational marijuana sales, up 38% from July, according to the Illinois Department of Revenue. So far in 2020, the state has collected a total of $86 million in taxes. Sales in August hit $63 million, beating July’s reported $60 million in sales. Out of state consumers purchased $17 million of cannabis in August.

The California Department of Tax and Fee Administration (CDTFA) reported revenue numbers for cannabis sales for the 2nd Quarter of 2020. As of August 11, 2020, California’s cannabis excise tax generated $101.8 million in revenue reported on the 2nd Quarter 2020 returns due by July 31, 2020, and the cultivation tax generated $22.9 million. Sales tax from cannabis businesses totaled $83.7 million in revenue for the same period.

Total tax revenue reported by the cannabis industry is $208.4 million for 2nd Quarter returns due by July 31, 2020. Previously reported revenue for 1st Quarter 2020 returns was revised to $205.9 million, which included $107.4 million in cannabis excise tax, $26.9 million in cultivation tax, and $71.6 million in sales tax. The state noted that revisions to quarterly data are the result of amended and late returns and other tax return adjustments.

Colorado reported that it collected $40 million in tax receipts for August and $244 million year to date for 2020 or January through August.


Debra BorchardtDebra BorchardtSeptember 15, 2020
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3min1040

Fire & Flower Holdings Corp. (OTCQX: FFLWF) stock jumped over 6% on news of the company’s rising revenue in the second quarter. The company delivered revenue of $28.6 million including sales of $23.4 million in the retail channel, $4.3 million in the distribution channel, and sales of $0.9 million in the digital retail and analytics channel.

Still, the company reported a net comprehensive loss of $29.1 million, or net loss per share, and on a fully diluted basis of $0.18. the company attributed the loss on expenses of $12.5 million and other expenses of $26.5 million. Other expenses included losses on the revaluation of derivative liabilities of $18.3 million and finance costs of $8.2 million.

“Fire & Flower continues to drive towards delivering positive adjusted  EBITDA and during our second quarter of fiscal 2020, we have made meaningful progress towards this critical goal,” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “We believe the company is well-positioned to expand its footprint in the Ontario market and expects to have access to the necessary capital to support our growth plans. As the cannabis and retail industry continue to adapt to the COVID-19 public health crisis, we will remain on the leading edge of driving consumer engagement in this dynamic environment.”

Looking Ahead

Fire & Flower said that the development of retail stores in the province of Ontario has been affected by the slowdown in the issuance of licenses and store construction due to the COVID-19 public health crisis. The company is currently waiting for licensing at a number of locations in the province and intends to open these stores once final licensing is complete.

Following the end of the quarter, Fire & Flower acquired a flagship downtown Toronto store at 378 Yonge Street. This store is currently open and will be transitioned to the Fire & Flower brand in the coming weeks.

During the onset of the COVID-19 public health crisis, Fire & Flower saw meaningful sales with basket sizes increasing as consumers purchased larger volumes of product. The company said it is now seeing consumer behavior return to normal seasonal levels and increased popularity in large format cannabis products, vapes, beverages, and edibles.


Debra BorchardtDebra BorchardtSeptember 15, 2020
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4min2251

Arizona-based Fibonacci Brands is buying the cannabis company  Darwin Brands from Harvest Health and Recreation (OTC:HRVSF) for an undisclosed amount. Darwin is part of the Arizona Natural Selections company and its products include Caramel Hard Candies, Seriously Good Gummies and award-winning vapes.

In February 2020, Harvest acquired AZ Natural Selections in a deal valued at approximately $30 million, the issuance of a $6.6 million promissory note and it assumed $3.8 million in debt at closing and paid off another $2.9 million at closing. The acquisition provided Harvest with two operational cultivation facilities: a 55,000 sq. ft. indoor cultivation and production facility in Phoenix and a 322-acre site of which 25 acres are zoned for cannabis with 70,000 square feet of greenhouse in Willcox.

“We are thrilled with the opportunity to execute the vision of Darwin: to reintroduce humanity to cannabis, with integrity, so everyone can ‘Enjoy with Confidence,’” says Fibonacci Brands founder James George. “We thank everyone who has supported Darwin over the years, and we are excited to evolve our products to make Darwin even more accessible to the cannabis community.”

Darwin has won Best Vape at the Errl Cup and Best CBD Edible at the 710 Cup. Its brand icon, named Darwin is a lifelike lion dressed in a vintage suit. The company said that production and distribution will soon recommence in Arizona. Should voters enact adult-use consumption through Proposition 207 in November, the company said that Darwin is primed, given its proud roots in the state, brand appeal, quality products, and its “Origin Series,” which ensures new consumers avoid an overwhelming first-time cannabis experience. Deriving its name from a mathematical principle that underlies the structure and beauty of nature, Fibonacci Brands’ vision is to craft an international house of brands that delivers the myriad benefits of cannabis.

“We have a big vision: to provide every consumer that comes into contact with cannabis their best possible experience through products they trust and brands they love, no matter the occasion,” says George. “Our desire to fulfill cannabis consumers’ needs fires our purpose.” The company’s team says it includes veterans of the cannabis and marketing industries who have launched products in global markets, built global brands but does not name these veterans.

Harvest Health Arizona Dominance

Harvest Health is based in Arizona and is one of its largest operators. As of June, the company had 14 retail locations in the state, plus an indoor and outdoor growing facility along with a processing lab. The company’s website currently lists 15 retail locations. When Harvest Health acquired AZ Natural Selections, it was seen as a move to buy up its competition. Harvest and Curaleaf now control one-sixth of the state’s 131 dispensaries and nine MSOs have captured approximately 30% of the market share in the state.

Harvest has been on a dizzying pace for acquisitions and divestments. Earlier this year, the company made fast work of its acquisition of $85 million acquisition of  Interurban Capital Group, which it then sold to another party within two months. However, Harvest Health is tied up in a lawsuit with the original owner of ICG.


Debra BorchardtDebra BorchardtSeptember 14, 2020
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5min1610

 Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF) reported that revenue fell from revenue $25 million in the 2019 second quarter to $21.6 million for the second quarter ending June 30, 2020. The company missed the average estimate for revenues, which was $25.9 million according to Yahoo Finance. The company also missed the earnings estimate of -$0.04 with an reported earnings of -$0.13.

The company blamed the drop on the pandemic saying, “COVID-19 has impacted the Company’s retail and health practitioner channels due to lower foot traffic and temporary location closures under the pandemic. Limited disruption has occurred within production and manufacturing operations, however, the company‎’‎s back office and reporting functions have been impacted and additional time was required for the consolidated second-quarter filing.”

The company also delivered a net loss of $14 million for the quarter versus last year’s net income of $2.2 million for the same time period. On a positive note, Charlotte’s Web did report that strong DTC (direct to consumer) sales largely offset a 54.5% decrease in B2B retail sales which accounted for 28.2% of total revenue in the quarter. DTC net sales grew by 33.6% year-over-year as online traffic and high conversion rates increased through ongoing marketing and social media programs.

“Second-quarter revenue was below expectations due to the impact of COVID-19 on retail sales,” stated Deanie Elsner, CEO of Charlotte’s Web. “However, our DTC sales increased by 33.6%, largely offsetting declines in B2B retail sales.  We made excellent progress building out our infrastructure and expanding our product portfolio with the closing of the Abacus acquisition.  Abacus CBD Medic™ products are now being sold through our online store and we look forward to realizing more cross-selling revenue synergies with Abacus through our FDM partners.”

Rising Expenses

Expansion has cost the company in terms of rising expenses. Operating expenses jumped 82% to $29.5 million over last year’s $16.2 million. The company said that the increase reflected its investments in capacity expansion and transition to a consumer-packaged goods (“CPG”) operating company capable of supporting mass retail channel growth. The increase included approximately $6 million of extraordinary expenses related to the Abacus acquisition and legal fees associated with the brand and intellectual property protection. Subsequent to Q2-2019, operating expenses increased as the company relocated into larger office facilities in Boulder, Colorado, and added senior CPG management to the leadership team along with related personnel. The company said that it is targeting a 10% reduction in expenses to match the falling revenue.

Charlotte’s Web completed the acquisition of Abacus Health Products, Inc. in June with an all-stock transaction. Abacus is a leading provider of over-the-counter topical products for pain relief and skincare containing CBD hemp extracts. In the third quarter, Charlotte’s Web began implementing operating cost synergies with Abacus and will continue through the remainder of the year. Further cost synergies are targeted in 2021 through integration into the Company’s new production and fulfillment center.

The company has been fighting a legal battle over the use of the name Charlotte’s Web. The company does not want any other brands to use the name Charlotte’s Web, while others believe it is just a strain name and that no company should be allowed to own a strain name.

Looking Ahead

Russ Hammer, Chief Financial Officer said, “We are seeing improvements and a stronger back half in our DTC channel, but without a meaningful opening up of the economy and health practitioner channel we expect only flat to modest consolidated net revenue growth for 2020. Our long view market opportunity remains intact and we continue to add new customers, doors, and products. Our Q3 revenues are trending ahead of Q2 sales levels and we anticipate reopening of retail locations in the U.S. will support a positive growth trend. As we see resolutions in COVID-19 and hemp CBD regulations or legislation we can see the category build towards its full potential.”


Debra BorchardtDebra BorchardtSeptember 11, 2020
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4min2500

Biotechnology company Amyris, Inc. (Nasdaq: AMRS) is being sued by biosynthetic cannabinoid company LAVVAN, Inc. for $881 million. The lawsuit is related to Amyris’s use of intellectual property licensed exclusively to LAVVAN, as well as the misappropriation of LAVVAN’s trade secrets. Amyris stock is falling over 10% on the news of the lawsuit to lately trade at $3.14.

In March 2019, LAVVAN and Amyris signed a Research, Collaboration and License Agreement (RCL) and LAVVAN made the initial payment under the Agreement in May 2019. LAVVAN is accusing Amyris of going into competition against LAVVAN versus working with the company as a partner.

“LAVVAN owns exclusive rights to the intellectual property which Amyris is wrongfully using in connection with their development, testing, and production of biosynthetic cannabinoids, including CBG,” said LAVVAN CEO Neil Closner. “Amyris has falsely claimed that our agreement permits them to engage in these activities, but it plainly does not. We are very disappointed that we have had to take this step, but through a history of erratic and egregious conduct, Amyris has demonstrated a willful intention to undermine the agreement. This has left LAVVAN with no choice but to vigorously pursue all legal avenues available to protect its rights.”

The agreement was for cannabinoid development, licensing and commercialization containing $300 million of R&D and milestone payments plus long-term royalties. In 2019, Amyris said it believed it could earn a significant portion of its milestone payments by the end of 2020, with $20-30 million anticipated in 2019, including a $10 million milestone payment that was expected to be recognized in March 2019.

“LAVVAN assembled a world class team and has been eager to lead the multi-billion-dollar biosynthetic cannabinoid market,” Closner stated. “But rather than fulfill its obligations to LAVVAN under the Agreement, Amyris has decided to transform from partner to direct competitor, in flagrant violation of LAVVAN’s rights.” At no point has Amyris achieved a single subsequent milestone under the Agreement, nor has any milestone payment ever been owing by LAVVAN.

Amyris Responds

Amyris responded to the lawsuit by saying that it “Has been deploying its R&D resources in accordance with the RCL Agreement since the start of the collaboration program with LAVVAN and has continued to work toward the collaboration deliverables through 2020.”

The RCL Agreement permits Amyris to conduct its development and commercialization efforts with regards to cannabinoids in the excluded market as defined under the RCL Agreement. Amyris will continue to exercise its rights to bring unique biosynthetic solutions to market within the boundaries of the RCL Agreement.

“At Amyris, we have built the leading synthetic biology platform and have achieved successful commercialization of eight of our ten scaled-up fermentation molecules through strategic collaborations and partnerships with some of the world’s leading companies,” said John Melo, President and Chief Executive Officer. “Over the years, we have achieved in excess of $650 million in proceeds from these partnerships. Amyris is disappointed that LAVVAN has chosen the public domain to articulate its position. Amyris has not breached the RCL Agreement with LAVVAN and we will continue to operate in accordance with its terms. We will pursue our legal rights to the fullest extent possible, including a vigorous defense against any assertions made by LAVVAN.”


Debra BorchardtDebra BorchardtSeptember 10, 2020
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5min5310

The queen of lifestyle branding Martha Stewart has launched a new line of CBD products with cannabis company Canopy Growth Corporation (NYSE:CGC.) The hemp-derived wellness supplements are inspired by some of Martha’s most popular recipes featuring Meyer lemons and blood oranges. The initial product offering will include a range of human wellness supplements, with a gift box and pet line launching later this year.

 

“I’ve found that CBD supplements are a simple way to enhance my own health and wellness, especially when it comes to managing the stresses of daily life,” said Martha Stewart. “I set out to create the most delicious CBD products on the market, drawing inspiration from some of my favorite recipes and flavor profiles from my greenhouse and gardens. My wellness gummies closely resemble the French confections, pâte de fruits, rather than the sticky, overly sweet versions you might find elsewhere. Created in collaboration with the top researchers and scientists at Canopy Growth, I am very proud of the end result: wellness gummies, oil drops and soft gels that taste as wonderful as they make you feel.” 

The new portfolio of natural, gourmet flavored wellness gummies, soft gels and oil drops are specially formulated by Martha Stewart, in collaboration with the cannabinoid scientists at Canopy Growth, to deliver a consistent daily dose of pure, premium CBD isolate. The products can be purchased through Canopy Growth’s website or launch.marthastewartcbd.com.

At launch, the Martha Stewart CBD product line includes: 

  • Martha Stewart CBD 10mg Wellness Gummies in Citrus Medley (Meyer Lemon, Kumquat and Blood Orange flavors, 30 count) for $34.99 
  • Martha Stewart CBD 10mg Wellness Gummies in Berry Medley (Raspberry, Huckleberry and Black Raspberry flavors, 30 count) for $34.99 
  • Martha Stewart CBD 25mg Soft Gels (Unflavored, 30 count) for $44.99 
  • Martha Stewart CBD 750mg Oil Drops (Blood Orange, Meyer Lemon or Unflavored) for $44.99 

Canopy Growth CEO David Klein said, “We are committed to leading the CBD industry by providing trusted brands, which is why we’ve chosen to collaborate with Martha Stewart, someone who people turn to for advice on living well. Together, we’re bringing consumers science-backed, premium quality products in elegantly designed and gourmet flavored formats, available at a price point that makes Martha Stewart CBD one of the best values on the market.”

Martha’s Cannabis History

Stewart is known for her home show and lifestyle empire that includes a magazine, television shows and numerous products. One of her shows was a cooking program with cannabis king Snoop Dogg called “Martha and Snoop’s Potluck Dinner Party.” While Snoop frequently brought up cannabis in the show and episodes featured cannabis-friendly guests like Whiz Kalifa and Seth Rogen, Stewart always remained coy on the subject. Although she has said that the second-hand smoke on the set probably led to a contact high for her. Conversely, Snoop is not much of an alcohol drinker, but Stewart would often get him to share a drink with her on the set.

Stewart’s move towards CBD products is on-brand with her demographic. Women are increasingly turning to CBD as a remedy for numerous conditions. Being able to enjoy the wellness benefits of cannabis without the psychoactive effects is very appealing to many older women.

As Martha Stewart CBD expands offerings this fall and early next year, you can expect luxury gift sets and pet products designed to help furry friends feel their best. Stewart is known for her love of dogs and it seems CBD is part of their regimen as well.

 

 


Debra BorchardtDebra BorchardtSeptember 9, 2020
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4min7880

Columbia Care Inc.  (OTCQX: CCHWF) has signed an agreement to buy California-based Project Cannabis for approximately $57 million in Columbia Care stock and approximately $12 million in cash from the proceeds of a concurrent sale of Project Cannabis’ real estate assets. The deal is expected to close in the fourth quarter of 2020.

“Project Cannabis perfects our operating model in California, enables us to maintain supply chain continuity, optimize profitability and gives us the full suite of capabilities, products and brands needed to be a market leader in the state,” said Nicholas Vita, CEO of Columbia Care. “In addition to being immediately accretive to Columbia Care’s adjusted EBITDA and cash flow, Project Cannabis expands our portfolio of unique products, nationally recognized premium brands, wholesaling expertise, and adult-use knowhow, all of which are scalable into the rest of our US markets.”

Based, in Los Angeles, Project Cannabis owns the branded products Triple Seven and Classix. It operates a 32,000 ft cultivation facility, along with three adult-use retail dispensaries in prime locations in North Hollywood, Downtown Los Angeles, and Studio City. In San Francisco, it operates one adult-use retail dispensary in the Soma district, close to both professional baseball and basketball stadiums. This location also houses one of the only permitted consumption lounges in San Francisco.

The acquisition of Project Cannabis will enable Columbia Care to materially increase its scale throughout California and position its wholesale and manufacturing operations as one of the leading suppliers in the state. Going forward, Columbia Care’s new manufacturing facility in San Diego will manufacture and package all extracted products and concentrates for Project Cannabis. Leveraging its distribution network of more than 100 dispensaries throughout the state, Project Cannabis will continue to sell its entire brand portfolio while simultaneously cross-selling Columbia Care’s medically focused products, recently acquired products and brands from the TGS acquisition, and several new consumer-oriented product lines such as the Amber Live Resin portfolio, Columbia Care’s fastest-growing product in California.

Vita added, “The expected impact upon gross margins on targeted SKUs should be approximately +10% to 15%. At a price of approximately 1.3x current year revenue (excluding synergies), Project Cannabis is growing substantially faster than the overall market and materially adds to Columbia Care’s critical mass and scale in California, while immediately contributing to the state level and consolidated cash flow and Adj. EBITDA.”

“Although we have been approached by virtually every conceivable strategic partner, we believe our culture, focus on producing the highest-quality products through the most effective brand architectures and extensive distribution network aligns perfectly with Columbia Care’s vision to grow its footprint into the market leader in California,” said Project Cannabis EVP Cameron Wald. “Our team has done a tremendous job cultivating and building sought-after brands while making our Project Cannabis dispensaries trusted destinations for a consistently excellent retail experience. Together, we plan to immediately capitalize on synergies in our wholesale business and expand our product offerings by leveraging Columbia Care’s state of the art pharmaceutical-grade GMP manufacturing facility to accelerate our profitable growth.”



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