Editor-in-Chief

Debra BorchardtDebra BorchardtJuly 6, 2020
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5min830

The relationship between Fire & Flower Inc.  (OTCQX: FFLWF) and its strategic investor Alimentation Couche-Tard Inc. (OTC: ANCUF) had signaled that someday the convenience store chain Circle K would get involved with cannabis. It seems the day is getting closer as Fire & Flower announced the openings of its first two cannabis retail stores adjacent to Circle K locations in the province of Alberta.

Fire & Flower’s plan is that it will gain from the high traffic at these Circle K locations that will be convenient for cannabis customers. The company said it believes it will maximize the benefit of the Spark Perks program and Spark Fastlane online ordering services at conveniently located stores.

“As we continue to build our relationship with Alimentation Couche-Tard, Fire & Flower is very pleased to be embarking on this initiative together,” shared Trevor Fencott, Chief Executive Officer of Fire & Flower. “We believe that combining convenient pickup locations with digital engagement offered by the Hifyre platform and Spark Perks program presents our customers with a differentiated value proposition in an increasingly competitive cannabis retail market. This approach to innovation in omnichannel and convenience-oriented cannabis retail differentiates Fire & Flower and positions us well to capitalize on both domestic and international opportunities.”

The company said the two stores in Calgary and Grande Prairie are expected to be the first of additional opportunities to co-locate cannabis retail stores in the future. The statement said that the co-located stores will be owned and operated by Fire & Flower and are separate from the adjacent Circle K in accordance with all applicable regulations. Alimentation Couche-Tarde said it has set its sights on the global expansion as new cannabis markets emerge.

In August 2019, Fire & Flower closed a strategic investment by Alimentation Couche-Tard. The company noted in its filing statement that this transaction allowed for Couche-Tard to obtain a controlling interest and provides more than $380 million of growth capital for global expansion. It provided significant, new possible commercialization and leadership opportunities for Fire & Flower’s proprietary Hifyre digital platform and access to Couche-Tard’s leadership team.

Convenience Stores

It has been argued that if cannabis is rescheduled and treated like alcohol or tobacco, cannabis products could end up in convenience stores. Products for adults over 21 like alcohol and tobacco are already sold in the convenience store model, so adding cannabis to the mix isn’t a stretch as long as the product is fully legal. A few cannabis companies had already begun to establish such relationships, if mostly behind closed doors.

The cannabis industry doesn’t want to discuss such an outcome as it would destroy the need for dispensaries. Plus, convenience stores typically only carry products from a small group of very connected consumer package goods companies. A look at the beer offerings demonstrates that only a handful of choices are offered. These beers, not necessarily considered the best the industry has to offer, are sold at high volumes.

This is the fear for many in the cannabis industry. The convenience stores may only carry a few big-name brands, that may not be the best cannabis, but is scalable cannabis. The winners of all this volume business will only be the ones picked by the convenience store chain. Cannabis brands will have to decide if they want to be a craft business or a volume business like Budweisers.

 

 

 


Debra BorchardtDebra BorchardtJuly 2, 2020
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5min3540

The star of the quickly growing plant-based medicine field is currently the mushroom – specifically, the psilocybin mushroom. It’s being touted as a treatment for drug-resistant depression and addiction. Clinics are being discussed as places to administer doses of psilocybin, but it seems the non-medical use has been brushed under the rug. A new study explores the case for non-medical psilocybin.

The results published by Psychopharmacology (2020) and led by Carbonaro, T.M., Johnson, M.W. & Griffiths, R.R. studied the subjective features of the psilocybin experience that may account for its self-administration by humans. The test was a double-blind comparison of psilocybin and dextromethorphan (DXM).

Study Results

The researchers were determined to figure out why people wanted to take psilocybin for non-medical uses more than they wanted to take DXM. The study consisted of a single, acute oral dose of psilocybin (10, 20, 30 mg/70 kg), DXM (400 mg/70 kg), and placebo were administered under double-blind conditions to 20 healthy participants with histories of hallucinogen use.

According to the researchers, high doses of both drugs produced similar time courses and increases in participant ratings of peak overall drug effect strength. Nine subjective effect domains are proposed to be related to the reinforcing effects of psilocybin: liking, visual effects, positive mood, insight, positive social effects, increased awareness of beauty (both visual and music), awe/amazement, meaningfulness, and mystical experience.

For most ratings, (1) psilocybin and DXM both produced effects significantly greater than placebo; (2) psilocybin showed dose-related increases; 3, DXM was never significantly higher than psilocybin; (4) the two highest psilocybin doses were significantly greater than DXM. These differences were consistent with two measures of desire to take the drug condition again.

Supported By Other Mystical Measurements

The nine subjective effect domains that psilocybin users experience has been supported by other studies. It was validated in an article published in 2015 by Johns Hopkins Researchers. The researchers took a 30-item revised Mystical Experience Questionnaire (MEQ30) that was previously developed within an online survey of mystical-type experiences occasioned by psilocybin-containing mushrooms. The rated experiences occurred on average eight years before completion of the questionnaire. Their work validates the MEQ30 using data from experimental studies with controlled doses of psilocybin.

The article read as follows: Data were pooled and analyzed from five laboratory experiments in which participants (n=184) received a moderate to high oral dose of psilocybin (at least 20 mg/70 kg). Results of confirmatory factor analysis demonstrate the reliability and internal validity of the MEQ30. Structural equation models demonstrate the external and convergent validity of the MEQ30 by showing that latent variable scores on the MEQ30 positively predict persisting change in attitudes, behavior, and well-being attributed to experiences with psilocybin while controlling for the contribution of the participant-rated intensity of drug effects.

These findings support the use of the MEQ30 as an efficient measure of individual mystical experiences. A method to score a “complete mystical experience” that was used in previous versions of the mystical experience questionnaire is validated in the MEQ30, and a stand-alone version of the MEQ30 is provided for use in future research.

Final Thoughts

Like marijuana legalization, the case for medical use will no doubt push forward the argument for decriminalization and legalization. It is far easier to convince lawmakers of a medical case for legislation versus a mystical experience argument. However, the industry would be remiss to dismiss the non-medical use for psilocybin.


Debra BorchardtDebra BorchardtJuly 1, 2020
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8min1100

Cresco Labs Inc. and Innovative Industrial Properties, Inc. (IIP) have closed on the acquisition of a property in Massachusetts with a leaseback agreement. The property is approximately 118,000 square feet of industrial space and the deal is valued at $7.8 million.

Cresco is a true leader in quality, customer experience, and patient care in its core markets, and we are pleased to further expand our long-term real estate partnership with them in Massachusetts,” said Paul Smithers, President and Chief Executive Officer of IIP. “The Massachusetts regulated cannabis industry is still in its early stages, and is emerging as one of the strongest medical and adult-use cannabis markets on the East Coast. Our transaction with Cresco represents our fifth property acquisition in Massachusetts, and we are firmly committed to being a strong real estate partner to the industry here for many years to come.”

Cresco Labs has agreed to a long-term, triple-net lease agreement for the property, which it plans to operate as regulated cannabis cultivation, processing and dispensing facility upon completion of redevelopment. Cresco said it is expected to complete additional tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to $21 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be approximately $28.8 million.

A String Of IIP Deals


Debra BorchardtDebra BorchardtJune 30, 2020
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4min8500

Paragon Coin had big plans to become a cannabis bitcoin company and in a 2017 ICO (initial coin offering) the company raised $70 million. Fast forward to today and the company is facing a class action suit claiming that Paragon violated federal securities laws.

United States District Court Judge Jeffrey White granted the plaintiffs’ motion-in-part on federal claims. Yet, he also denied applications for state-level allegations that were filed by several non-California-based investors.

Paragon Coin originally faced a lawsuit filed against the brand and its owners Jessica VerSteeg and her husband Egor Lavrov for allegedly violating Securities law with regards to the Paragon Initial Coin Offering (ICO).

The lawsuit stated that approximately between August 15, 2017, through October 16, 2017, the defendants raised at least $70 million in digital cryptocurrencies by offering and selling unregistered securities in direct violation of the Securities Act. It also stated that on November 2, 2017,  Paragon ICO investors received an email updating them that during the Paragon ICO “crowd sale” they had collected 533 BTC and 8,092 ETH— worth approximately $7.3 million and $10.2 million, respectively, as of January 12, 2018. Unfortunately, these amounts did not include any of the cryptocurrencies they collected during the Paragon ICO “presale.”

Capital For Real Estate

At the time, the plaintiff was upset that some of the money raised was being used to acquire real estate even though it was stated that it would be a goal. In Paragon’s white paper it said, “[t]he lion’s share of the token crowdsale [sic] proceeds will be spent on real-estate acquisition.” The plaintiff expected that its investment would increase in value and now wants to be repaid what was invested. So, how much did Davy invest?

Plaintiff invested in the Paragon ICO on September 21, 2017, September 23, 2017,
September 28, 2017, September 30, 2017, October 3, 2017, and October 15, 2017, by transmitting 0.04095 BTC, 0.03975 BTC, 0.57855 ETH, 0.0231 BTC, 0.03495 BTC, and 0.04579484 BTC, respectively, to Defendants.

 

Paragon Settles in 2018

Paragon did settle in 2018 when the SEC said that Paragon raised approximately $12 million worth of digital assets to develop and implement its business plan to add blockchain technology to the cannabis industry and work toward legalization of cannabis. The SEC statement wrote that Paragon did not register its ICO pursuant to the federal securities laws, nor did it qualify for an exemption to the registration requirements.

Paragon’s Headaches Continue

Even though Paragon settled with the SEC, the investors are still upset as they apparently haven’t received anything.  However, Judge White notes that the lawsuit alludes to the company selling the tokens over the Internet. The judge added, “Plaintiffs concede there may be class members in all 50 states and concede that laws governing the state law claims at issue differ among jurisdictions in such a way that a true conflict exists.”

Cannabis Law Report said that, “While the suit argues that ParagonCoin claimed to have issued PRG from its headquarters in California, Judge White noted that “the ICO giving rise to plaintiffs’ claims and purchases of PRG tokens were conducted over the internet.”

“Plaintiffs concede there may be class members in all 50 states and concede that laws governing the state law claim at issue differ among jurisdictions in such a way that a true conflict exists,” the judge added.


Debra BorchardtDebra BorchardtJune 30, 2020
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5min3830

Some drugs work and at other times they don’t, which is the whole point of testing and the importance of trying to find solutions to patient conditions. Unfortunately for Zynerba Pharmaceuticals, Inc. (ZYNE) its latest top-line results from the 14-week pivotal CONNECT-FX (Clinical study of Cannabidiol (CBD) in Children and Adolescents with Fragile X) trial failed to produce the necessary threshold for positive results. The stock was selling off as a result of the news.

The Zygel CBD gel as a treatment for behavioral symptoms of Fragile X syndrome (FXS) in 212 patients did not achieve statistical significance versus placebo in the primary endpoint of improvement in the Social Avoidance subscale of the Aberrant Behavior Checklist – Community FXS (ABC-CFXS). Zynerba also said that Zygel also did not demonstrate statistical significance versus placebo in the three key secondary endpoints, which were the change from baseline to the end of the treatment period in the Irritability subscale score of the ABC-CFXS, the Socially Unresponsive/Lethargic subscale score of the ABC-CFXS and Improvement in Clinical Global Impression (CGI-I).

“This study identified a key population of patients who appear to benefit from treatment of their behavioral symptoms of FXS with Zygel,” said Randi J. Hagerman, MD, an investigator in the clinical trial and Medical Director and Endowed Chair in Fragile X Research at UC Davis MIND Institute and Distinguished Professor at the Department of Pediatrics at UC Davis School of Medicine. “Zygel has the potential to be an important therapeutic option for the most severely impacted patients with Fragile X.”

Study Results

While the drug wasn’t a statistical success, the company felt that enough patients responded positively that it wants to meet with the FDA to discuss a future path for the drug.

“The results from CONNECT-FX identified a significant patient population who responded well to Zygel and may provide us with a pathway towards licensure,” said Armando Anido, Zynerba’s Chairman and Chief Executive Officer. “We intend to discuss the results of the study with the FDA as soon as possible. On behalf of the entire Zynerba team, I want to sincerely thank the patients, families and investigators who participated in this study as well as the National Fragile X Foundation, the FRAXA Research Foundation, and the Fragile X Association of Australia for their assistance in this study.”

The company posted the following study details: Two hundred and forty-five (245) patients with Fragile X syndrome, confirmed with the full mutation of the FMR1 gene, were enrolled at 21 clinical sites in the United States, Australia, and New Zealand. Unknown to the patients and their caregivers, all patients were given placebo during the first two weeks (called a “placebo run-in” which is often used in neuropsychiatric clinical trials), and as a result 33 patients were not randomized. The remaining 212 patients were included in the Intent-to-Treat (ITT) population (Zygel: n=110; placebo: n=102) and were randomized to receive either trial drug or placebo for an additional 12 weeks. One patient did not receive study medication so 211 patients are included in the safety analysis (Zygel: n=109; placebo: n=102.) One patient did not have a post-baseline efficacy measure, resulting in 210 patients in the full analysis set (Zygel: n=109; placebo: n=101).

A pre-planned ad hoc analysis of the most severely impacted patients in the trial, as defined by patients having at least 90% methylation (“full methylation”) of the impacted FMR1 gene, demonstrated that patients receiving Zygel achieved statistical significance in the primary endpoint of improvement at 12 weeks of treatment in the Social Avoidance subscale of the ABC-CFXS compared to placebo (p=0.020). This group comprised 80% of the patients enrolled in the CONNECT-FX study. The Company believes that full methylation occurs in approximately 60% of the overall FXS patient population. Based on this analysis, Zynerba intends to meet with the FDA regarding a regulatory path forward for Zygel.

 

 

 


Debra BorchardtDebra BorchardtJune 30, 2020
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5min4520

GW Pharmaceuticals plc (NASDAQ:GWPH) has pushed the legalization of cannabis ahead with its work on the drug Epidiolex. Now the company is making its plans for its other cannabis drug Sativex known and it’s impressive and hopeful.

The company is announcing its plans for its pipeline product nabiximols to the U.S. market. This strategy includes multiple opportunities for the submission of an initial New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA), the earliest of which could occur in 2021.

“We are excited to present the details of our clinical program and regulatory strategy for nabiximols, which we believe support the potential for a substantial near-term commercial opportunity in the U.S. Following constructive meetings with the FDA, we are now commencing a Phase 3 clinical program that provides multiple opportunities for an NDA submission, including as early as 2021”, stated Justin Gover, GW’s Chief Executive Officer. “Beyond the initial target indication of MS spasticity, our Phase 3 clinical program is designed to achieve a broad spasticity label over time. This development strategy, together with the long-term exclusivity potential of nabiximols, provides GW with confidence that this product should represent a significant value driver for GW.”

What Is Nabiximols?

According to GW Pharma, Nabiximols is a complex botanical medicine formulated from extracts of the cannabis plant that contains the principal cannabinoids THC and CBD and also contains minor constituents, including other cannabinoid and non-cannabinoid plant components, such as terpenes, sterols, and triglycerides. The product is administered as a mouth spray. The commercial name outside the U.S. is Sativex and it is commercially available for the treatment of MS spasticity in numerous countries.

The biotech company outlined the following plans for Sativex:

MS Spasticity Clinical program

  • Three positive Phase 3 MS spasticity trials already completed outside of the U.S.
  • Five new MS Spasticity Phase 3 trials are expected to commence in H2 2020 (2) and H1 2021 (3), any one of which we believe could enable a NDA submission
    • Phase 3 muscle tone studies – placebo-controlled cross-over design
      • N=52; Expected start: Q4 2020
      • N=190; Expected start: Q1 2021
      • N=36 (nabiximols responders); Expected start: Q1 2021
    • Phase 3 spasm frequency studies – placebo-controlled parallel group
      • N=450; Expected start: Q4 2020
      • N=~200 (nabiximols responders); Expected start: Q2 2021

Spinal Cord Injury (SCI) spasticity clinical program

  • Three SCI trials are expected to be initiated in 2020 and 2021
    • N=~100 (observational clinical discovery study); Expected start: Q4 2020
    • N=~100 (muscle tone in nabiximols responders); Placebo-controlled parallel group design. Expected start: Q2 2021
    • N=~400 (spasm frequency); Placebo-controlled parallel group design. Expected start: H2 2021

            This second spasticity indication may lead to broad anti-spasticity labeling and usage.

Post Traumatic Stress Disorder (PTSD) clinical program

  • We are also exploring the potential of nabiximols to reduce sleep disturbance symptoms, as well as anxiety and irritability, in patients with PTSD
  • A Phase 2/3 study in PTSD will have approximately 325 subjects and is anticipated to be initiated in H1 2021

Stock Performance

GW Pharmaceuticals stock has moved higher over the past six months. The stock hit a low of $72 in March and was recently trading at $121. It looks to be moving higher based on the news for Sativex.


Debra BorchardtDebra BorchardtJune 29, 2020
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6min1140

It’s time for your Daily Hit of cannabis financial news for June 29, 2020. 

On the Site 

Aurora Cannabis 

It’s been a rough road for some of the OG’s of the cannabis industry. Today, Aurora Cannabis (NYSE:ACB) said its Co-Founder Terry Booth had retired from his role as Director of the Company, effective June 26, 2020. Mr. Booth was the Chief Executive Officer of Aurora from December 2014 through February 2020 and served on Aurora’s Board of Directors since December 2014. 

According to Wikipedia, Aurora was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesack, and Chris Mayerson. Booth and Dobler collectively invested over $5 million of their own capital. The founding group secured a 160+ acre parcel of land in Mountain View County, Alberta, where they established Aurora’s first facility. The company received its license to grow cannabis in 2014, making it the first cannabis producer to obtain a federal license in that province. The company went public in Canada in 2017 and then in 2018 began trading at the New York Stock Exchange. 

Cannapreneur 

Green Market Report CEO Debra Borchardt: 

Kevin Harrington has recently joined with Cannaprenuer Partners, a company that is investing in cannabis companies. Kevin, you’ve not been in cannabis, but you have certainly been in the corporate world and businesses. You’ve been helping so many companies get started or grow. What at this point prompted you to get into cannabis and specifically choose to join up with Cannaprenuer? 

Kevin Harrington: 

Great question. Thank you. If I go all the way back, I’ve been a product guy for many years. 38 years ago I was creating infomercials and As Seen on TV, and doing some fun things with Jack LaLanne and the juicer, and George Foreman, and Tony Little, and Billy Mays. That’s been my previous life, and taking a lot of pitches. Of course, then original Shark on Shark Tank, being able to take pitches on national television, that was pretty cool. But one thing Shark Tank never did, they never took pitches about cannabis. Shark Tank is on ABC Network. It’s the Disney Group and so cannabis was not their cup of tea. I don’t know if they’ll change that at some point, but most of the entrepreneurs and judges and Sharks are in cannabis investments, O’Leary and Cuban, et cetera. 

 In Other News 

Innovative Industrial Properties, Inc. (NYSE: IIPR) announced today that it has commenced a public offering of 1,800,000 shares of its common stock. The company said it expects to grant the underwriters a 30-day option to purchase up to an additional 270,000 shares of its common stock. The company said it intends to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy, and for general corporate purposes. 


Debra BorchardtDebra BorchardtJune 29, 2020
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5min1510

It’s been a rough road for some of the OG’s of the cannabis industry. Today, Aurora Cannabis (NYSE:ACB) said its Co-Founder Terry Booth had retired from his role as Director of the Company, effective June 26, 2020. Mr. Booth was the Chief Executive Officer of Aurora from December 2014 through February 2020 and served on Aurora’s Board of Directors since December 2014.

“On behalf of our Board of Directors and management team, I would like to thank Terry for his leadership over the years and for his tenure as a director,” said Michael Singer, Executive Chairman and Interim CEO of Aurora. “As one of the original cannabis visionaries, Terry leaves an enviable legacy in the form of Aurora Cannabis. He helped set the table for the company to lead in Canada and globally, and we continue to execute our plan to do so profitably.”

According to Wikipedia, Aurora was founded in 2006 by Terry Booth, Steve Dobler, Dale Lesack, and Chris Mayerson. Booth and Dobler collectively invested over $5 million of their own capital. The founding group secured a 160+ acre parcel of land in Mountain View County, Alberta, where they established Aurora’s first facility. The company received its license to grow cannabis in 2014, making it the first cannabis producer to obtain a federal license in that province. The company went public in Canada in 2017 and then in 2018 began trading at the New York Stock Exchange.

Founders Forced Out

Founders often do quite well when their companies go public. Their large stake of shares suddenly becomes very valuable and at a certain point, the founder can sell those shares and capitalize on all the sweat equity and sacrifice it took to get the company to that point. Of course, the flip side to that coin is that the board of directors can now vote you out from your role at the company. That has been the case this year as boards have tossed founders and co-founders out as an expression of performance displeasure.

Here’s a shortlist of the leaders who got their walking papers this year.

  • Kevin Murphy, Co-founder of Acreage Holdings Inc. in June.
  • Hadley Ford, Co-founder of iAnthus in April.
  • Peter Horvath, Co-founder at Green Growth Brands in March
  • Joe Caltabiano, Co-founder, and president of Chicago-based Cresco Labs in March.
  • Jose Hidalgo Co-founder of Cansortium, a medical marijuana dispensary operator in Miami in February.
  • Andy Williams, Co-founder of Denver-based Medicine Man Technologies in February.
  • Adam Bierman Co-founder of  MedMen Enterprises in January.

In 2019, the trend seemed to be kicked off when Bruce Linton was asked to leave Canopy Growth. He had built it into one of the biggest cannabis companies in the industry, but his partnership with Constellation Brands (NYSE:STZ) proved to be his undoing as that corporate entity took over.

Most of the founders were asked to leave after the companies found themselves boxed into strategic corners. Not enough revenue coming in to satisfy all the money invested, much of it achieved through expensive debt deals. Boards always take out the CEO as a sign of acting in the best interests of the shareholders.

Still, the cannabis community is a small one and many of these founders were synonymous with their companies. When conferences do return, the companies will be familiar but the face won’t be.

 

 

 


Debra BorchardtDebra BorchardtJune 26, 2020
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4min2861

Following the company’s heavily discounted deal with Canopy Growth and the departure of co-founder and CEO Kevin Murphy, Acreage Holdings, Inc. (OTCQX: ACRGF) reported first-quarter 2020 reported revenue of $24.2 million, an increase of 88% increase compared to the same period in 2019, and a 15% sequential increase. The earnings were unaudited.

The revenue that was reported paled in comparison to the company’s charges, which were almost double what Acreage had told investors they could expect.  Acreage reported a one-time, non-cash pre-tax charge of $196.0 million, or $164.7 million after taxes. The company had originally told the market it could expect to see a charge between $80-$100 million. Acreage blamed the discrepancy on current fair market value in certain states and the write-down
for its services agreement in Maine, which was not initially contemplated.

The net losses were equally eye-popping at $172 million. These results explain the departure of Murphy and his replacement by Bill Van Faasen.

“With the COVID-19 pandemic affecting millions across the U.S., the cannabis industry was faced with yet another significant challenge. Our dispensary and processing and cultivation associates quickly adapted to these changing dynamics ensuring our patients and customers in need were still served with dignity and respect, while maintaining a safe environment for everyone. Additionally, I am pleased with the reacceleration of our reported and pro forma revenue as our wholesale business continues to ramp and our dispensaries continue to mature,” said Bill Van Faasen, interim Chief Executive Officer of Acreage.

The company continues to report pro forma numbers, however, many past deals in which Acreage included those pro forma numbers have been terminated or sold. At this point, the company that once claimed to be the largest cannabis business in the country only has (assuming completion of pending acquisitions), 15 operational dispensaries. Acreage has or will have management or consulting services agreements, (including pending acquisitions), with entities operating 12 dispensaries.

Murphy’s Voting Shares

Not unlike the structure that was originally established at MedMen (OTC:MMNFF), Murphy, he exercises a significant majority of the voting power in respect
of the Acreage Shares. According to the company’s May MD&A, “The Subordinate Voting Shares are entitled to one vote per share, the Proportionate Voting Shares are entitled to 40 votes per share, and the Multiple Voting Shares are entitled to 3,000 votes per share. As a result, Mr. Murphy has the ability to control the outcome of all matters submitted to the Company’s shareholders for approval, including the election and removal of directors and any arrangement or sale of all or substantially all of the assets of the Company.”

“As a shareholder, even a controlling shareholder, Mr. Murphy will be entitled to vote his shares, and shares over which he has voting control, in his own interests, which may not always be in the interests of the Company’s shareholders generally. Because Mr. Murphy holds most of his economic interest in the Company’s business through High Street, rather than through the Company, he may have conflicting interests with holders of the Acreage Shares.”

The company is hosting a call to discuss the earnings on Friday morning. The stock closed higher by 23% on Thursday to end the day at $2.88.


Debra BorchardtDebra BorchardtJune 26, 2020
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4min1340

Liberty Health Sciences Inc. (OTCQX: LHSIF) reported net sales of $50 million for the fiscal year 2020 ending February 29, 2020, versus $10 million for 2019. The company also delivered net income for the fiscal year 2020 of $22.2 million, which included the gain on the sale of a property of $14.2 million. The earnings per share reported were $0.06. This was an improvement over the net loss of $22 million for the fiscal year 2019. All figures are in Canadian dollars.

The company attributed the increase in revenue to the introduction of 200 new products the opening of new dispensaries, expanded delivery infrastructure, as well as an upsurge in same-store sales volume and an increase in the registered patient base for Medical Marijuana Use in Florida. The company also said that its expenses dropped from $25.5 million in 2019 to $25.1 million in 2020.

“End of year fiscal 2020 proved to be the highest net revenue increase in the Company’s history and reflects our customer loyalty and strength of our brand,” said Victor Mancebo, Chief Executive Officer of Liberty. “Liberty’s continued growth directly ties to the strategic initiatives we have set in place, which has been increasing our Florida production, retail base, and delivery footprint along with expanding our product portfolio and brand partnerships. We continue to work on innovative strategies that complement our expansion plans while at the same time provide our patients a more accessible medicine platform.”

Dispensary Expansion

Liberty currently operates 25 dispensaries throughout Florida and has lease agreements in place for 10 additional locations and is negotiating for another ten locations. The company said it has implemented health and safety measures for employees, patients and facilities following guidance from public health officials worldwide in response to the COVID-19 pandemic to ensure adequate in-store product supply and customer convenience due to increased demand.

The latest location opened this month in Stuart Florida with a 5,000 square foot dispensary featuring a spacious display and retail area, two private consultation rooms, and one large waiting. Locally inspired wall-art will be featured throughout the store on a rotating basis.

“We are excited to open our doors to new friends and patients in our first dispensary to be situated in Martin County ,” said Mancebo. “We are thrilled to expand our dispensary footprint along Florida’s Treasure Coast during these trying times and have remained committed to ensure our patients safe and reliable access to our premium products. We continue to take steps to keep our employees and our patients safe as the state continues to reopen.”

As of February 29, 2020, Liberty had $24,957,245 of cash and cash equivalents compared to $13,291,426 in cash and cash equivalents at February 28, 2019.

Looking Ahead

The cultivation production capacity of the company is currently approximately 19,500 kilograms annually (dry weight), and the Company made further investments in fiscal 2020 to increase its plant yield, targeting an increase of production of approximately 25% by first quarter of 2021. Retrofit activities associated with processing continued through the fourth quarter of fiscal 2020, adding additional drying rooms.

 

 



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