Executive Editor

Debra BorchardtAugust 17, 2022


In the early days of the legalization and decriminalization of cannabis, efforts have been attempted to link cannabis to a church. The move seems to suggest that members of the church should be afforded certain freedoms. If cannabis use was shown to be part of spiritual practice, then the church members argue they should be allowed to do as they please during these ceremonies. That their method of worship should be respected. 

Unfortunately for these churches, municipalities beg to differ. Two separate cases, in two separate cities, have shown that municipalities aren’t buying the religious claims of these cannabis congregations. 

Oakland CA

The Church of Ambrosia in Oakland California is suing the city and claiming discrimination when it was denied a land-use permit by the city. In its case filed on August 12, the Church of Ambrosia and its local assembly, Zide Door Church of Entheogenic Plants said it was denied a permit to operate. The Church also claims that police officer John Romero entered the church using a fictitious name and applied to be a member acknowledging the plant use within the church. He then returned with a search warrant, which he is alleged to have used to force open one of the safes on the property and also damaged five more safes. He is also accused of seizing paperwork, inventory logs dated August 13, 2020, a computer, cannabis and mushroom products, and cash totaling over $4500.00.

The Church of Ambrosia says it practices the religious use of entheogenic plants. The entheogenic plants are classified as Schedule I substances within the California Uniform Controlled Substances Act. The church says it practices Ambrosia, an established, spiritist religion that has evolved over thousands of years and is described as shamanism. The complaint stated, “Central and essential to the Ambrosia religion is the sincere, sacramental use of entheogenic plants, and fungi, including cannabis and psilocybin.”

The church also feels that Measure Z, which was approved by the voters in Oakland covers their worship and makes cannabis enforcement a low priority. The church says it should be able to practice its religion freely and that it doesn’t charge its members for cannabis or magic mushrooms. In June of 2019, Oakland’s City Council approved a resolution that essentially decriminalized mushrooms and other psychedelic plants. However, the church does acknowledge that its members do give it money, but says it’s just to reimburse the church  “for the time, travel, laboratory testing, maintenance and upkeep of the sacrament provided within.” 

It seems the law disagreed and interprets the cash payments as the church acting like a dispensary, for which it doesn’t have a license. The officer wrote, “After completing the membership process, [ROMERO] was able to purchase 3.5 grams. of packaged Cannabis buds material and manufactured Cannabis material for U.S. Currency.” 

Los Angeles

In Los Angeles, the city claimed that the Jah Healing Kemetic Temple of the Devine, Inc., is a California nonprofit corporation, and was doing business using the fictitious name of Jah Healing Church. The city alleges that it “continues to unlawfully do business within City of South Gate at the real property located at 3463 Tweedy Boulevard, South Gate, California.”

The complaint stated, “The City further alleges that under the false pretense of acting as a church or religious organization, the JHC Defendants have surreptitiously engaged in and conducted unlawful and prohibited commercial cannabis activity at the Property in violation of SGMC § 7.80.010 (A) and state law, including, but not limited to, cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution and sale of marijuana products, including medical and nonmedical marijuana, nonmedical cannabis products and medical cannabis products.” The complaint specifically identified Christopher Tindall as being a part of the Jah organization. 

The case was set to go to trial on July 12 but then Tindall was ordered removed from the courtroom for being disruptive. “Subsequently, the Court found that Christopher Tindall had left the 5th floor of the courthouse and had not returned or called the Court. The Court further found that Christopher Tindall had willfully absented himself from trial and his failure to return to the Court was an implied waiver of presence.”

On August 12, the judge on the case permanently barred Tindall and anyone using that location from selling, making or giving away cannabis in the city of South Gate. The order included, “cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of marijuana products, including medical and nonmedical marijuana, nonmedical cannabis products and medical cannabis products within the meaning of Business and Professions Code §19300 et seq.”

Debra BorchardtAugust 17, 2022


Mydecine Innovations Group (NEO: MYCO) (OTC: MYCOF) has burned through its cash and is closing its research operations in Denver Colorado. The psilocybin company reported financial results for the six months ending June 30, 2022, with a net loss of $8.09 million or a basic and diluted loss per share of $(1.31).

Mydecine said it had $324,146 in cash and cash equivalents as of June 30, 2022. The company had $1.4 million at the end of December. As of June 30, 2022, Mydecine said it had an accumulated deficit of $133,166,197 (December 31, 2021 – $124,915,140), On March 8, 2022, the company entered into an unsecured note payable with an institution for $153,840 which bears a 5% interest rate annually and matures on March 7, 2023. The balance of the note payable on June 30, 2022, was $87,916 including accrued interest of $2,777.

Shutting Down

At the end of June, Mydecine management decided to stop the research that was being conducted in the research facility located in Denver, CO. According to the company’s filing, during the quarter, the employees at this facility were released or transferred to other functions of the company. Management began preparations to liquidate the laboratory equipment and furniture in this location and, subsequent to the end of the quarter, negotiated an amendment that changed the termination date of the lease.

On July 26, 2022, the company said it agreed to the Second Amendment of its Business Lease and First Amendment related to the research and development facility located in Denver, CO. The landlord waived monthly lease payments for the month of June 2022 and the partial month of July 2022 in exchange for the laboratory equipment, leasehold improvements, and furniture (the Lab Assets) within the research and development facility. The company said it also agreed to allow the landlord to keep the security deposit of $9,149.13 that the company paid at the beginning of the lease. Mydecine then transferred ownership of the Lab Assets, in “as is” condition, to the landlord and was released from any further obligations for lease payments, cleaning costs, and the obligation to restore the space to its original condition.

CEO Josh Bartch said, “The company stated in our financials that we had decided to close down the DENVER lab, and only the DENVER lab.  This lab was focused on Mycology research and was a very small, non-material subset of the overall company’s focus, which is as a pure biotech, drug development company.  The decision to close down the Colorado lab was for multiple reasons, first is that the Mycology research no longer fit into the company’s plan moving forward as a singularly focused biotech company, focused on developing improved second and third-generation psychedelic molecules, something the company does very well and efficiently.  Second, the company, like many companies in a variety of sectors, has scaled down operations in order to cut burn rate to adapt to times, we have also done a very good job at accomplishing this as well.  The closure of the Colorado lab has no material effect on the company’s overall business strategy, in fact we view it as a positive evolution.”

In addition to shutting down the lab, Mydecine decided to reduce the scope of daily operation within the Mindleap Health subsidiary. “The platform remained, and remains, available to subscribers and continued to generate operating revenues and expenses through June 30, 2022. However, software development activities were paused and the Company released Mindleap’s consultants. Management will continue to assess plans for the Mindleap platform that include, but are not limited to, strategic opportunities.”

Bartch added, “The decision to lay off the Mindleap staff is a decision the company made in regards to the future of the application under the Mydecine roof.  Management made the decision that Mindleap as an application would be better suited with a company that had either an immediate use for the application, such as a clinic organization and or was solely focused on technology or app development.  To that end we made the decision to sell the application, which we will be updating the market on in the near term.  This will result in two direct benefits to the company, one it saves a significant amount of money in monthly and annual burn, as well as strengthens the balance sheet with non-dilutive capital.”

Just last month Mydecine announced it has successfully synthesized multiple short-acting MDMA analogs. This family of analogs had been specifically designed by experts at Mydecine to have a shorter half-life than traditional MDMA. The company has named this family of novel molecules MYCO-006 and applied for patent coverage with the World Intellectual Property Organization.

Board is Gone

During the Second Quarter, Gordon Neal who served as the Chairman of the Company’s board of directors and the chair of the Audit Committee resigned, effective May 31, 2022, in order to attend to his other business interests. Mr. Todd Heinzl, who is the owner of The Governance Box consultancy and who has been working as a corporate governance consultant for the company, was nominated to succeed Mr. Neal the chairman of the board of directors.

On August 12, 2022, the company announced that Damon Michaels, Josephine Wu, Dr. Saeid Babaei and Dr. Victoria Hale had resigned as directors of the Company. As a result of the resignations, the company is currently working to identify suitable candidates to replace Mr. Michaels, Ms. Wu, Dr. Babaei and Dr. Hale on the board, and to recruit and appoint three new independent directors to the company’s board of directors and audit committee.

Bartch concluded by saying, “Mydecine remains alive and well, and has made the necessary changes and pivots in business strategy to position it for success in the future.  The company’s primary operations have been and remain in exclusive partnership with Applied Pharmaceutical Innovations out of the University Of Alberta, where Mydecine has been developing several families of first, second and third generation novel, improved psychedelic molecules for going on 3 years now.  In addition to that, the company continues to work alongside Johns Hopkins to both support the NIDA Grant funded study for smoking cessation, in which is using Medicines MYCO-001 drug, as well as to continue to develop Mydecines clinical trial for smoking cessation/substance use disorder for MYCO-004.”

Debra BorchardtAugust 16, 2022


Field Trip Health has changed its name to Reunion Neuroscience Inc. (TSX: FTRP)(Nasdaq: FTRP) and reported its fiscal first quarter 2023 results for the period ending June 30, 2022. Reunion reported expenses of $5 million and a net loss of $13 million. The increase in net loss from the prior year primarily reflected the company’s focus on investing in RE104 which recently began its Phase 1 clinical trial, as well as increased public company costs.

There are no revenues at this time. As of June 30, 2022, the company had approximately $52.3 million in unrestricted cash, cash equivalents, and short-term investments.

New Tickers

On August 11, 2022, The company completed its split of its Field Trip Discovery and Field Trip Health divisions into two independent companies. Field Trip Health, which is the clinic side of the company, was renamed Field Trip Health & Wellness Ltd. and has received listing approval from the Toronto Stock Exchange Venture under the new ticker symbol “FTHW”.

Field Trip Discovery, which is the drug research side of the company, was renamed Reunion Neuroscience Inc. and will remain listed on the NASDAQ Stock Market and Toronto Stock Exchange under the ticker symbol “REUN”. Immediately upon closing of the Arrangement, the Company consolidated its shares on a 5:1 basis, which is expected to cure the NASDAQ minimum bid price deficiency previously announced. The company said it also received approval from the Toronto Stock Exchange for Field Trip H&W to list on the TSX-V under the ticker symbol “FTHW”. The first day of trading for both companies under their respective new tickers is August 17, 2022.

Reunion Research

Reunion’s lead drug is RE-104 (previously known as FT-104) and it is a proprietary, novel psychedelic drug being developed for post-partum and treatment-resistant depression as a potential fast-acting antidepressant with durable efficacy. Reunion is also developing the FT-200 series, which includes compounds with the potential for more selective serotonin receptor activity with reduced psychoactivity for potential use in more chronic treatment paradigms and indications.

On July 21, 2022, announced successful first dosings in the company’s Phase 1 Clinical Study of its first novel psychedelic molecule, RE104 (formerly FT-104), being conducted in Australia. Reunion said it expects to report results from the study in the calendar fourth quarter of 2022 and is planning to seek FDA guidance on Phase 2 studies planned for 2023. During the quarter, the company was granted a patent for claims related to RE104 entitled, “Tryptamine Prodrugs”. The patent provides exclusive rights to Reunion until 2040 for the composition of matter, formulations, methods of use and methods of manufacture for a family of hemi-ester compounds of hydroxytryptamines, including Isoprocin.

Joseph del Moral, Founder and Chief Executive Officer of Reunion, said, “We are pleased to have successfully completed the split of Field Trip into two distinct companies – Reunion and Field Trip Health & Wellness. As independent companies, each will be laser-focused on executing their own strategic vision and investment priorities, and creating long-term value for their respective shareholders. The future is bright for both businesses and each is excited to continue developing and delivering innovative psychedelic-assisted treatment options.”

Debra BorchardtAugust 16, 2022


Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced its unaudited financial results for the second quarter ended June 30, 2022, with revenue increasing 12% to $224 million versus the same time period in 2021. This was slightly higher than the Yahoo Finance average analyst estimate for Verano revenues of C$280 million, which when roughly converted to today’s exchange is $217 million and higher than the first quarter’s revenues of $202 million. The company also trimmed its net losses to $10 million from last year’s net loss of $30 million.

“I am very proud of our performance this quarter alongside the strategic investments we made to ensure our high operational standards touch every part of our business,” said George Archos, Verano Founder, and Chief Executive Officer. “Despite ongoing macroeconomic headwinds, we achieved a number of wins throughout the quarter, including the successful launch of adult-use sales in New Jersey, exceeding a milestone of operating more than 100 dispensaries following the opening of seven new stores in Florida, West Virginia and Pennsylvania, announced a partnership with Mission Green to advance cannabis clemency and social equity initiatives, and launched mobile applications and rewards programs for our flagship Zen Leaf and MÜV dispensaries. I am proud of what we have accomplished since going public last year and remain confident that the strategy and plans we have in place will drive long term, sustainable growth for Verano.”

Verano noted that it has surpassed the 50-store mark in the state of Florida. It has also started sales in the new market of New Jersey with locations in Elizabeth and Lawrence Townships. Following the close of the quarter, Verano maximized its New Jersey footprint with the start of adult-use sales at Zen Leaf Neptune on the Jersey Shore.

Also after the quarter closed Verano said it launched its signature flower branded products in four new core markets – Arizona, Florida, Massachusetts, and Pennsylvania. The company also announced the upcoming launch of Savvy in September 2022, a new brand featuring larger-format cannabis products that cater to more value-oriented patients and consumers, across seven core markets.

As of June 30, 2022, Verano said its current assets were $288 million, including cash and cash equivalents of $93 million. The company said it  had working capital (deficit) of $(299) million and total debt, net of issuance costs, of $403 million.

In July, Verano told investors that it would have to restate its earnings due to accounting errors that were uncovered. The company’s Audit Committee determined that its tax expense for the first quarter 2022 report was overstated due to a clerical error in the effective tax rate calculation, and accordingly, the company’s tax obligation will be reduced.

Debra BorchardtAugust 15, 2022


IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) reported financial results for its second quarter ended June 30, 2022. IMCC said that revenues rose 114% in the second quarter and were $23.8 million versus the same quarter last year. Total dried flower sold was 3,210 kilograms at an average selling price of $5.72 per gram, compared to 1,842 kilograms for the same period in 2021 at an average selling price of $3.92 per gram. The increase in revenues was primarily attributed to the increase in the quantity of medical and recreational cannabis products sold, as well as to the higher average selling price per gram the company realized from its portfolio of premium branded cannabis products in Israel and Canada.

IMCC delivered a net loss of $18.98 million in the second compared to a net loss of $5.01 million for the same quarter in 2021. The company said that included in the net loss was a non-cash charge of $5.4 million, related to restructuring activities in Canada and Israel, along with associated write-downs in tangible and intangible assets, such as other non-cash impairments of $1.5 million in financial expenses and $3.8 million in general and administrative costs.

The company though burned through its cash in the quarter with cash and cash equivalents totaling just $5.86 million as of June 30, 2022, versus $34.05 million as of December 31, 2021. General and administrative expenses were $11.1 million in the quarter versus $7.4 million in 2021. The increase in the general and administrative expenses was mainly attributable to the growing corporate activities in Israel and Canada following the company’s acquisitions in 2021.

“We have accelerated along the path to profitability, with increased revenues, operational streamlining, and a focus on cost reduction,” said Oren Shuster, Chief Executive Officer of IMC. “Our primary goal is to continue to increase revenue in each of our core markets to build long-term shareholder value. By focusing on sustainable revenue growth, while rigorously pursuing cost and margin efficiencies, we believe we can achieve profitability in the short term.”

“Our long-term strategy relies on geographic diversification and preparation to target, upon legalization, new adult-use recreational cannabis markets in Germany followed by the rest of Europe. We are preparing to leverage our global cultivation, brand, and commercial expertise to profitably capture substantial market share across Europe. Our strength is in properly positioning our brands in different markets and the introduction of new SKUs to consistently exceed consumer and patient expectations.”

Debra BorchardtAugust 15, 2022


Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF)  released its financial results for the three months ending June 30, 2022. Total net revenues from the sale of adult-use cannabis in Canada were $27.3 million for the quarter, a 31% increase from the same period last year. The net losses for Auxly in the quarter almost doubled from last year’s $8.6 million to this year’s $14.2 million.

Revenue in the second quarter of 2022 was approximately 40% in sales of dried flower and pre-roll Cannabis Products, with the remainder from oils and Cannabis 2.0 Product sales. Net revenues improved from the company’s expansion of its Cannabis 1.0 Products and continued leadership in Cannabis 2.0 Products. Auxly reminded investors that it does not participate in the Quebec market, approximately 85% of cannabis sales during the second quarter of 2022 originated from sales to British ColumbiaAlberta, and Ontario.

“We continued to make meaningful progress towards our strategic objectives during Q2,” said CEO Hugo Alves. “With an increasingly competitive market, we have been able to maintain our position as the #1 LP in cannabis 2.0 sales, driven by our leadership position in the vapor category where we ended the first half of the year as the #1 LP in the category with over 17% share of market. We successfully increased revenues and gross profits during the quarter while maintaining our SG&A spending largely flat. We have also strengthened our balance through the sale of non-core assets for total proceeds of $10.1 million to date, which will support our continued growth. We remained focused on our consumers and their evolving needs and preferences by launching 27 new SKUs during the first half of the year and will continue to prioritize investments in innovations in key growth categories. Finally, as we enter the second half of 2022, we will continue to focus on cost control and margin enhancement through continuous process improvements and investments in automation to further support our key objective of Adjusted EBITDA profitability in 2022.”

In July, Green Market Report reported that the Cantor Fitzgerald analyst lowered his 12-month price target on Auxly to C$0.08 from C$0.20 on reduced estimates and a lower multiple used. The stock was last trading at $0.06 or C$0.075. Zuanic wrote, “The heavy debt load and likely equity-holder further dilution, combined with worsening scanner trends prompt us to downgrade our rating to Neutral. We do see much improvement on cash burn. Based on our math, Auxly has the highest debt-to-sales ratio among LPs. This includes convertible debt held by Imperial Brands (IMB.LN/NC) due Sep 2024; but with a conversion price of $0.81, we think terms will be renegotiated.”

The company noted that interest expenses were $5.3 million and $10.4 million for the three and six months ending June 30, 2022, an increase of $0.5 million and $1.0 million over the same periods in 2021 primarily as a result of the inclusion of Auxly Leamington. Interest expense included accretion on the convertible debentures and interest paid in kind on the $123 million Imperial Brands Debenture. Interest payable in cash was approximately $1.6 million for the current quarter.

Looking Ahead

Auxly said it remains committed to building on its success as a Canadian market leader in 2022. The Company’s high-level objectives for 2022 are to improve revenue and gross profit margin to achieve a positive Adjusted EBITDA. The company said that during the second quarter it made positive progress toward its strategic objectives. “Despite operating in a challenging macroeconomic environment, the Company increased revenues and gross profits during the quarter. Coupled with largely flat SG&A spending, Auxly improved its Adjusted EBITDA by approximately 34% since the fourth quarter of 2021, bringing it closer to its objective of Adjusted EBITDA profitability in 2022.”


Debra BorchardtAugust 15, 2022


Columbia Care Inc. (CSE: CCHW) (OTCQX: CCHWF) reported financial results for the second quarter ending June 30, 2022, with revenue rising 18% to $129 million over last year’s $109 million. Revenue grew 5% sequentially from the first quarter. The company reported a net loss of $54 million versus last year’s net loss of $18 million, higher than the previous quarter’s net loss of $27 million. This is also expected to be the last quarterly earnings report before the company combines with Cresco Labs.

“In these challenging times, Columbia Care achieved exceptional results in several key markets that serve as meaningful, positive long-term indicators. Despite the economic headwinds and challenges that were particularly impactful in our most mature markets, we saw surprising resilience across the country, in addition to outstanding performance in our highest growth, emerging markets. We delivered solid organic topline growth of 5% sequentially to reach $130 million in revenue for the quarter, an increase of 18% over Q2 2021. New Jersey, the most recent state to launch adult use, was a primary driver in sequential revenue growth, along with Virginia and West Virginia, where we are the number one wholesaler and retailer in these rapidly-expanding medical markets” said Nicholas Vita, CEO of Columbia Care.

Best Markets

Col-Care said its top five markets by revenue in the second quarter were California, Colorado, Massachusetts, Pennsylvania, and Virginia. However, it was New Jersey that put it over the top this quarter. In April,  New Jersey launched adult-use sales with limited hours but expanded to full adult use hours in June 2022, and revenue in New Jersey more than doubled sequentially. During the quarter, the company said it operationalized its second cultivation facility in New Jersey, adding approximately 270,000 square feet of cultivation and production capacity, as well as post-harvest automation equipment. The first harvest from the second cultivation site is expected in the third quarter of 2022.

Vita continued, “Sixteen of our seventeen U.S. markets generated positive EBITDA in the quarter and twelve markets saw sequential improvement in gross margin. Excluding California and Colorado, our EBITDA margin would have been over 500 basis points higher for the quarter. We continued to drive the organization forward by capitalizing upon growth from emerging markets as they transition to more favorable regulatory environments, leveraging our expanding scale, and implementing strategies in mature markets to consolidate supply and distribution channels.”

Looking Ahead

Columbia Care forecasts continued sequential top-line growth of mid-single digits in each of the next two quarters. In addition, the company said it expects sequential improvements in market level EBITDA margin in the range of 150-250 basis points per quarter compared to its year-to-date results.

“For the remainder of 2022, Columbia Care will execute against our strategic priorities while completing the steps necessary to close the merger with Cresco on time. The integration planning process has brought an overwhelming sense of excitement and momentum. As a founder of Columbia Care, seeing our organizations collaborate so well has been humbling and deeply gratifying. Our shared vision has enabled both organizations to focus on the range of opportunities that lay before us and meet the future with clarity, momentum, and capabilities that will drive outsized shareholder value for years to come. The embedded growth and sustainable margin opportunity being unlocked by this combination will be a game changer.”

Debra BorchardtAugust 11, 2022


Glass House Brands Inc. (OTCQX: GLASF and GHBWF) reported financial results for its second quarter ending June 30, 2022, with sales falling by 12% to $16.5 million from $18.7 million for the same time period in 2021. On a positive note, sales increased 18% sequentially from $14.0 million in the first quarter. the loss from operations was $17 million, which increased sequentially from the first quarter’s loss of $13 million.

“We continued to make solid progress against our strategic growth priorities during the second quarter, “stated Kyle Kazan, Chairman and CEO of Glass House Brands, “The initial harvest from our SoCal farm was completed in late May followed by the first sales of cannabis grown at the facility in June, both well ahead of schedule and significantly faster than the previous ramp up of our Casitas and Padaro farms. Over the past few years, our Casitas and Padaro farms have established a strong reputation for consistently growing high quality cannabis at a low cost. So, I can’t emphasize enough how thrilled we are that the SoCal farm is already producing cannabis with a higher and more consistent quality than the Casitas and Padaro farms. In addition, it has shown particular promise at growing high quality genetics at extremely close to indoor quality. Volume has ramped quickly and in July we produced 22,000 pounds of biomass across all three facilities, compared to a total of 25,000 pounds in the entire second quarter.”

Guidance Is Rich

Glass House is forecasting that in the third quarter it expects to achieve revenues of between $27 million and $30 million which is a 64% to 82% increase vs. the second quarter this year. “This assumes the wholesale pricing we are currently experiencing in Q3 remains constant through the balance of the quarter. Our Q4 revenue target is $50M and assumes Q4 wholesale pricing remains consistent with Q3 and includes revenue from our NHC acquisition as well as a partial quarter for our new Farmacy stores.” The company is also forecasting that it will triple its revenues to $200 million by 2023. The company is also forecasting it will be free cash flow positive by the first quarter of next year.

“Our aggressive retail expansion also remains firmly on track and we are on pace to have at least 11 dispensaries by year-end 2022, up from three just over a year ago when we started our
life as a public company. We closed our acquisition of the remaining 50% equity stake in The Pottery Dispensary in July and expect to open three new Farmacy locations in the fourth quarter. In May, we announced the acquisition of three Natural Healing Center (“NHC”) dispensaries and we are moving forward on closing these acquisitions. In addition, we are very happy to announce that we have agreed to acquire Natural Healing Center’s flagship Grover Beach store for $15.9 million, with $8.1m of the purchase price in assumed debt, $7.7 million in stock and $0.1 million in cash net of working capital. The Grover Beach store is the crown jewel of NHC’s dispensaries and netted US$16m in revenues in 2021. It is one of only four total dispensaries in Grover Beach and is the No. 1 taxpayer in the city, given its high sales volume and strong cash flow generation. The deal multiple based on the annualized EBITDA of the Grover Beach store in the first half of 2022 is 4.8x.”

Looking Ahead

Glass House said it has a long-term target of reducing cultivation costs to $100 per pound. The company said, “The management team is now ready to provide projections for the average cost of production across all 3 farms of $150 per pound for Q3 and $125 per pound for Q4 of this year. Please note that the SoCal farm is completing its ramp up through Q3. The projected improvement to $125 per pound in Q4 represents a 25% reduction from Q4 last year.”

Debra BorchardtAugust 11, 2022


Leafly Holdings, Inc.  (NASDAQ: LFLY) announced financial results for its second quarter ending June 30, 2022. with revenue rising 13.8% to $12.1 million over last year’s $10.5 million for the same time period. Leafly attributed the increase to growth in retailer and brand revenues. The company reported a net income of $14.8 million, which included $24.4 million of gains on derivative liabilities, compared to a net loss of $1.3 million for the same quarter last year.

“Revenue in the quarter was $12.1 million, up 13.8% over Q2 last year, and up 5.5% over Q1 as we continue to build on the investments we’ve made in the first half of this year. We released several new enhancements that drive consumer engagement and differentiation. In addition, we’re also bringing more tools, greater flexibility, and reduced friction to retailers and brands, creating a seamless experience between consumers and our supply partners,” said Yoko Miyashita, CEO of Leafly. “Our investments to date have positioned us for long-term growth as the industry continues to evolve at a rapid pace, leaving significant opportunity in our path. Despite the uncertainties of the current macro-economic environment, we remain committed to maximizing efficiencies and prioritizing projects that will result in the highest returns.”

During the quarter, all licensed dispensaries in New Jersey subscribed to the Leafly platform and published their menus, giving residents a single platform to shop the menus of every legal dispensary in the state. In many cases, residents can place an online order for in-store pickup. New Jersey began legal adult-use sales in April.

“We made progress in the quarter on our long-term objectives. Concurrently, we have encountered challenges in our less mature markets and seen signs that customers are more cautious with their ad budgets,” said Suresh Krishnaswamy, CFO of Leafly. “We remain focused on our execution and managing our expenses carefully.”


Year over year, ending retail accounts grew, and ARPA (average revenue per account) declined, as a result of Leafly’s strategy to lower entry point subscription fees in order to rapidly expand in lower penetrated markets. Monthly average users or MAUs increased quarter over quarter, highlighting the strength of news and learn content, technical improvements to SEO and the Company’s expertise in the cannabis category. In Q2 2021, MAUs reflected an increase in user traffic primarily as a result of the pandemic.

Looking Ahead

Leafly noted that during the second quarter, it began to see some macro-economic impacts on the business, with signals from retailers and multi-state operators that their advertising budgets are under scrutiny. The company said, “In light of the current macroeconomic environment, we are taking a more conservative view of the second half of the year and are taking steps to manage the business accordingly. We are implementing plans to reduce operating expenses and have implemented a hiring freeze.”

For the full year of 2022, Leafly said it expects revenue to be in the range of $48.0 million to $51.0 million, representing 15% growth over 2021 at the midpoint. “We expect Adjusted EBITDA loss to be in the range of $28.5 million – $26.0 million.”

Debra BorchardtAugust 10, 2022


Parallel Cannabis, also known as Surterra Wellness, had hoped to get its investor lawsuit dismissed, but the investors say not so fast. The latest chapter in the ongoing case has the defendants TradeInvest Asset Management Company (BVI) Ltd., First Ocean Enterprises SA, and Techview Investments Ltd. understandably opposing the request to dismiss the case. 

Surterra Holdings which is also known as Parallel Cannabis filed a motion to dismiss and the hearing for this is scheduled on September 9, 2022. It wasn’t until August 5, that the TradeInvest group pushed back on the request to dismiss. In their response, they wrote, “Defendants claim they have a “get out of jail free” card. The excerpts from the documents they cite, according to Defendants, actually allowed them to make multiple, material misrepresentations to the SAFE Plaintiffs—which were critical to their decision to invest—with no liability for lying.” The investors also claim in their court filing that Surterra can’t fall back on the disclaimer of forward-looking statements language. The investors wrote,  “They argue that certain representations are protected, forward-looking statements—but concede that protection does not apply where the speaker knows the statement is false (and/or is using it to aid in fraud).”

Original Complaint

Green Market Report has covered this case extensively. In March, GMR wrote that the investors alleged that chewing gum heir Beau Wrigley (the former Surterra CEO) convinced the plaintiffs to invest in a Simple Agreement for Future Equity or SAFE. A SAFE is a relatively new type of security in which an investor’s cash investment generally converts to equity in the issuing company under conditions specified in the SAFE. They are often issued to provide a company with bridge financing until it can complete an additional capital raise or a sale of the company, and will often convert to equity upon the occurrence of that future, specified event.  They say they sent the money to the company on September 27, 2021. Although much is redacted, it does allege that the investors were misled and had they been told the truth would likely not have made the SAFE investment. 

They say they weren’t aware that the company was in financial trouble, having defaulted on some debt already. They also claim that their investment money wouldn’t be tapped until Wrigley matched the investment with his own money. Instead, they allege their investment money was used to pay off other debts causing them to claim it was a Ponzi scheme

Lawyers Leaving

Also happening in the background of this case, the lawyers for the investors are apparently trying to get off of the case. They wrote to the judge on August 2, “Mr. and Mrs. Morgan are partners in a large law firm. Given the substantial costs and time associated with prosecuting this action, and the fact that only a subset of holders of Senior Notes had joined and agreed to bear such expenses, on July 7, 2022, Mr. Morgan notified Quinn Emanuel that they no longer wish to be represented by us and that they were accordingly releasing the firm.” The legal firm went on to say in a letter to the judge, “We had understood that the Morgans would either be representing themselves or continue appearing through their law firm, which Mr. Morgan advised me has over 800 lawyers.”

John and Ultima Morgan are part of the TradeInvest group. However, the firm Quinn Emanuel also stated they hadn’t been given any instructions for new counsel and they remain on the case for now. Indeed, the latest court filing arguing against dismissing the case was filed by Quinn Emanuel’s lawyers.

Parallel Moves Forward

Despite the financial troubles with its debt, Parallel continues to operate and move forward. In June, the company announced opening its third dispensary in Miami Florida. “As Surterra continues to expand its dispensary locations across Florida, we’re excited to increase our presence in the sunny home to hundreds of thousands of Miami residents who seek high-quality medical marijuana products, which we’re proud to provide,” said Parallel CEO James Whitcomb. Whitcomb replaced Wrigley as the lawsuit laid bare issues with repayment of the company’s debt.  The company said it has 45 Medical Marijuana Treatment Centers in the state of Florida, with more planned to open in 2022.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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