Debra Borchardt, Author at Green Market Report

Debra BorchardtDebra BorchardtDecember 18, 2018
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6min510

The war between Terra Tech Corp. (OTC: TRTC) and its investor Heidi Loeb Hegerich is heating up. The first attack began with a lawsuit filed last week by the Reno, Nevada woman claiming fraud. Loeb Hegerich entered into a partnership with Terra Tech and became a co-owner of a Blum dispensary in midtown Reno. Loeb made some 50 different claims in the case and ultimately is unhappy that she hasn’t received any money back from her investment.

Among the claims, she says she contributed $633,156, and Terra Tech has only contributed $513,706, which was not as much as they had originally agreed to invest. Loeb also claims that Terra Tech’s financials weren’t audited properly as the company claimed and that funds were commingled with other joint ventures. The lawsuit notes that in March 2018, Terra Tech’s accounting firm Macias Gini & O’Connell issued an Adverse Opinion on Terra Tech’s internal financial controls.

The 80-page lawsuit goes on to describes various financial mishaps by CEO Derek Peterson and claims that the CFO Michael James has been involved in three companies that resulted in total shareholder wipeouts.

The lawsuit also details numerous bankruptcies by Terra Tech executives, which Loeb claims wasn’t disclosed to her prior to becoming partners. Loeb also claims that Terra Tech has tried to oust her from the company.

Terra  Tech issued a statement on Tuesday after the market closed refuting her claims.

Terra Tech said it will defend itself vigorously against the meritless claims filed in the State of Nevada. The company strongly denies these allegations and would like to highlight that these are only allegations by a business partner which have not been proven. Terra Tech also intends to pursue numerous counter-claims against Ms. Hegerich.

Terra Tech Chairman and CEO, Derek Peterson said, “Far from the image portrayed in recent interviews, Heidi Loeb Hegerich is, in fact, a wealthy, sophisticated investor with a history of disputes with business partners. We reaffirm our commitment to our shareholders to correct any misleading and inaccurate reports and remain committed to providing accurate information to our investors.”

The statement went on to say, “Ms. Hegerich’s lawsuit and recent interviews are an attempt to manipulate Terra Tech into paying money she is not owed. As Ms. Hegerich is well-aware, her allegations ignore the significant investment and expertise required to obtain a license and build out a retail facility. In fact, Terra Tech actually funded over 2.9 times the amount invested by Ms. Hegerich, including buying all of the product inventory to open the location and carrying operating losses until the opening of recreational sales.”

Ms. Hegerich believes the company tried to push her out of the company, but Terra Tech’s point of view is that it offered to purchase her share of the business at a greater than eight times return on her investment within two years.

With regards to the auditing of the company’s financials, Terra Tech said it “Is a publicly traded company audited by one of the largest accounting firms in the US. Additionally, MediFarm I has engaged an independent third-party accounting firm to review the books and records for the Reno business. Any allegations against the Company’s accounting practices are completely baseless in fact or evidence.” Terra Tech also claims that the accounting firm didn’t actually file an Adverse Opinion.

Golden Leaf 

In the middle of this battle of words, Golden Leaf decided against pursuing a potential transaction with Terra Tech as it announced on November 5. Lucky for them it was a nonbinding agreement.

Terra Tech reported that for the last nine months ending September 30, the company reported a net loss of $34 million. The company had revenues of $24 million, but expenses of $25 million.

The company is currently involved in a lawsuit with regards to its subsidiary Edible Gardens and former partners. No doubt expenses will rise for Terra Tech as it fights multiple lawsuits.

 

 


Debra BorchardtDebra BorchardtDecember 18, 2018
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5min310

It’s time for your Daily Hit of cannabis financial news for December 18, 2018.

On The Site

Tilray Inc.

Tilray Canada Ltd., a subsidiary of Tilray Inc. (NASDAQ: TLRY) entered into an agreement with Sandoz AG, which is a part of the Novartis group, to increase the availability of high-quality medical cannabis products across the world. In the agreement, Sandoz AG will support the global commercialization of Tilray’s non-smokable/non-combustible medical cannabis products. Tilray and Sandoz AG may co-brand certain non-smokable/non-combustible products. Tilray may supply non-smokable/ non-combustible medical cannabis products and license rights to and from Sandoz AG in relation to such products. Both companies may also partner to leverage best-in-class knowledge to educate pharmacists and physicians about medical cannabis products.

Italy

Competition in Italy is heating up following a slew of major investments from Canadian firms seeking to expand their European cannabis footprint in a burgeoning market.

On December 6, Toronto cannabis investment vehicle Canopy Rivers pumped $17m into CanapaR Italy, an Italy-based organic hemp production and processing platform, taking its total shareholding to 49.9 percent as part of a $25m investment.

TriGrow Systems

MJ is switching its existing, vertically-integrated Denver facilities, as well as enabling its new ones in Las Vegas, to a method powered by TriGrow Systems that will standardize and automate the cultivation process. A combination of custom software and specialized hardware is resulting in consistent results from plants. This customization even extends to proprietary nutrients that are blended for specific strains as well as to optimize plant growth.

In Other News

Terra Tech Corp.

Golden Leaf Holdings Ltd. (CSE: GLH) (OTCQB: GLDFF)  said that it has decided not to pursue a potential transaction with Terra Tech Corp. (OTCQX: TRTC). Golden Leaf and Terra had previously announced the signing of their nonbinding letter of intent on November 5, 2018.

This follows the explosive lawsuit filed last week by a  Reno, Nevada woman who is suing Terra Tech (TRTC) and claiming fraud. Loeb Hegerich became a co-owner of a Blum dispensary in midtown Reno. Loeb claims that Terra Tech’s financials weren’t audited as claimed and that funds were commingled with other joint ventures. In addition, there were numerous other claims about financial misdeeds. Loeb said she hasn’t received any money from the investment.

The lawsuit describes various financial mishaps by CEO Derek Peterson and claims that the CFO Michael James has been involved in three companies that resulted in total shareholder wipeouts.

Terra Tech issued a statement that strongly denies these allegations and said it would like to highlight that these are only allegations by a business partner which have not been proven. The company maintains that, after a full vetting of relevant facts, Terra Tech will be fully vindicated.

MJardin Group, Inc.

MJardin Group, Inc. (CSE: MJAR) announced its first medical cannabis research investment to fund two studies on the benefits of cannabinoids on epilepsy and schizophrenia. Beginning in the first quarter of 2019, the studies will be conducted in Salamanca, Spain for a period of one year, in collaboration with Salamanca University and the Institute of Neuroscience of Castilla y León – two of the leading institutions globally for the scientific research of the nervous system and its diseases.

Weekend Unlimited Inc.

Weekend Unlimited Inc. (CSE: YOLO) announced the appointment of Mr. Paul Chu to the role of President and CEO. As an Executive and Entrepreneur, Mr. Chu brings over 25 years of success across a variety of industries including CBD cannabis, technology, hardware/software, food and beverage, energy, telecommunications, hospitality, and real estate.


Debra BorchardtDebra BorchardtDecember 18, 2018
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3min460

Tilray Canada Ltd., a subsidiary of Tilray Inc. (NASDAQ: TLRY) entered into an agreement with Sandoz AG, which is a part of the Novartis group, to increase the availability of high-quality medical cannabis products across the world.

According to the company statement, the Tilray and Sandoz agreement would be as follows:

  • Sandoz AG may support the global commercialization of Tilray’s non-smokable/non-combustible medical cannabis products;
  • Tilray and Sandoz AG may co-brand certain non-smokable/non-combustible products;
  • Tilray may supply non-smokable/ non-combustible medical cannabis products and license rights to and from Sandoz AG in relation to such products; Both companies may also partner to leverage best-in-class knowledge to educate pharmacists and physicians about medical cannabis products;
  • Tilray and Sandoz AG may collaborate to develop new innovative medical cannabis products.

“This agreement represents a major milestone in the movement to provide access to safe, GMP-certified medical cannabis to patients in need across the world,” says Brendan Kennedy, Tilray Chief Executive Officer. “Tilray is a global company and we’re thrilled to build upon the success and momentum from our existing agreement with Sandoz Canada by taking our partnership global. Sandoz AG will be a valuable partner as we work together to improve access to the highest quality medical cannabis products in countries all over the world.”

Tilray already has products available in twelve countries and operations in Australia & New Zealand, Canada, Germany, Latin America, and Portugal. This agreement builds on Tilray’s pioneering track-record as a company committed to making pharmaceutical-grade medical cannabis products available to patients in-need. Tilray was the first licensed medical cannabis producer in North America to obtain current Good Manufacturing Practice certification in accordance with the European Medicines Agency’s standards.

Tilray stock jumped over 9% in pre-market trading to lately trade at $72.25. This is still way below the frenzy price of $300, but well above the company’s 52-week low of $20.


Debra BorchardtDebra BorchardtDecember 18, 2018
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6min370

The beauty of brands like McDonald’s (MCD) or Coca-Cola (KO) is consistency. Consumers can walk into any McDonalds and always expect the hamburger to be relatively the same. They can open a can of Coke and it will always taste the same. This isn’t the case in cannabis these days.

A popular strain like Blue Dream might have a variation in its THC percentage depending on the state where it was cultivated. A 2015 study  determined that “marijuana strain names often do not reflect a meaningful genetic identity.” Another test of cannabis products in Alaska found that the THC levels were not what was advertised. This lack of inconsistency is causing companies like MMJ America to wipe its cannabis slate clean and start over with a new crop of cannabis plants that it can control.

MMJ is switching its existing, vertically-integrated Denver facilities, as well as enabling its new ones in Las Vegas, to a method powered by TriGrow Systems that will standardize and automate the cultivation process. A combination of custom software and specialized hardware is resulting in consistent results from plants. This customization even extends to proprietary nutrients that are blended for specific strains as well as to optimize plant growth.

The software solution allows for a consistent product regardless of the location of the cultivation facility so that MMJ’s customers can have a similar consumption experience no matter where they buy the product. Not unlike McDonald’s and Coca-Cola.

The consistency is also beneficial from a business standpoint as it gives the grower some predictability and that allows the company to have reliable information which helps with business planning. The cultivators at MMJ America feel they are akin to artists when it comes to growing cannabis, but they have said that the TriGrow System will take their artistry and truly replicate their strain. TriGrow says its system can increase the average potency of cannabinoids by 28.8%.

Green Market Report has visited many grow facilities, but what set this one apart was the vertical stacking of the TriGrow units. It’s typical to see rolling tables to maximize the floor space, but stacked tables with catwalks really maximize the amount of yield a producer can get from a warehouse space with tall ceilings. These units can be stacked three high which can increase the yield by 7.8 times and they are like Lego pieces. The units can be stacked on top of each other or linked side by side and each comes complete with its own set of lights. There is a catwalk system that comes with vertical stacking.

Another producer in Washington state has decided to implement the same system for its newest 30,000 square foot facility in Bellevue WA. Hannah Industries has been growing cannabis for two years and a traditional setup seemed to be the way to go, but with competition heating up the pressure is on to save money on the build out plus produce more. Hannah said it estimates it will be able to produce 80% more weight out of its new facility with TriGrow and save 10-15% on the build out.

TriGrow has received an investment from long-time cannabis investment group Poseidon Asset Management. Morgan Paxhia, co-founder of Poseidon said “Poseidon has been an early investor in the agtech area of cannabis. Cultivation is going to face commodity pressures as production scales to meet legal demand, as we are already seeing in certain markets. As a result, operators will need to be extremely focused on consistent production at low cost. TriGrow’s platform is built to support this mission, which we are seeing real time from the customers they are onboarding across several markets.”

The company has also partnered with cannabis loyalty software company Baker, which recently went public as a part of the TILT Holdings (CSE: TILT) (OTC: STTVF)) rollup. As more companies become multi-state operators, consumers will expect and demand that the products be consistent. Being able to deliver this consistency is going to be a challenge for many and no doubt they will have to seek out cultivating methods that move from traditional styles to the latest technology and hardware.

“TriGrow provides an opportunity to create scalable solutions producing consistency across production facilities,” said David Kessler, SVP of Horticultural Solutions at TriGrow.  “Our goal is to provide precision cultivation solutions, enabling indoor growers to scale operations efficiently and grow the highest quality crop consistently, at low operating costs” he added.


Debra BorchardtDebra BorchardtDecember 17, 2018
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4min560

It’s time for your Daily Hit of cannabis financial news for December 17, 2018.

On The Site

New York Legalization

New York State Governor Andrew Cuomo presented his 2019 agenda on Monday morning to the New York Bar Association and it included his plan to legalize adult use cannabis. “Let’s legalize the adult use of recreational marijuana once and for all,” said Governor Cuomo.

During the midterm elections, the New York State government shifted to a Democratic control and it was expected that the new lawmakers would fully legalize cannabis. There have been estimates that legalizing cannabis could bring in an additional $1.3 billion in annual tax revenues with $336 million for New York City alone.

Tilray

Tilray, Inc. (NASDAQ: TLRY  )  has signed a binding letter of intent (LOI) to purchase hemp-derived CBD isolate from LiveWell Canada Inc. (CSE: LVWL), which will be sourced from the United States and Canada.  Hemp CBD is estimated to be a $22 billion market in the U.S. The product will be used for distribution of Tilray-owned wellness and medical products across North America.

LiveWell will supply Tilray with a minimum of 150 kilograms per month of wholesale CBD isolate cultivated and processed from hemp commencing in February 2019, through to July 2019. The amount then increases to a minimum of 300 kg/month for the remainder of the contract, until December 2019. Tilray has the option to increase the amount of CBD supply purchased to 500 kg/month, and there is an additional 12-month renewable option.

In Other News

Terra Tech

A Reno, Nevada woman is suing Terra Tech (TRTC) and claiming fraud. Loeb Hegerich became a co-owner of a Blum dispensary in midtown Reno. Loeb claims to have contributed $633,156, and Terra Tech has only contributed $513,706, which was as much as they had originally agreed to invest. Loeb also claims that Terra Tech’s financials weren’t audited as claimed and that funds were commingled with other joint ventures. In addition, there were numerous other claims about financial misdeeds. Loeb said she hasn’t received any money from the investment.

The lawsuit describes various financial mishaps by CEO Derek Peterson and claims that the CFO Michael James has been involved in three companies that resulted in total shareholder wipeouts. The lawsuit also detail numerous bankruptcies by Terra Tech executives. Loeb also claims that Terra Tech has tried to oust her from the company.

Terra  Tech issued a statement to News 4 in Reno saying, “We are aware of the allegations made by Ms. Loeb-Hegerich. Terra Tech strongly denies these allegations. We remind the public that the allegations in her complaint are just that – allegations by a business partner which have not been proven. We maintain that, after a full vetting of relevant facts, Terra Tech will by fully vindicated.

New Jersey

The New Jersey Department of Health have selected six businesses to apply for new medical marijuana permits. Two were chosen for three portions of the state to make sure patients had access.


Debra BorchardtDebra BorchardtDecember 17, 2018
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4min1581

New York State Governor Andrew Cuomo presented his 2019 agenda on Monday morning to the New York Bar Association and it included his plan to legalize adult use cannabis.

“The fact is we have had two criminal justice systems: one for the wealthy and the well-off, and one for everyone else,” Mr. Cuomo said before introducing the cannabis proposal, describing the injustice that he said had “for too long targeted the African-American and minority communities.”

“Let’s legalize the adult use of recreational marijuana once and for all,” he added.

During the midterm elections, the New York State government shifted to a Democratic control and it was expected that the new lawmakers would fully legalize cannabis. There have been estimates that legalizing cannabis could bring in an additional $1.3 billion in annual tax revenues with $336 million for New York City alone.

It was reported in several New York publications that some lawmakers were considering the tax revenues as a way to pay for upgrades and expensive maintenance projects in the subway. “The biggest issue we hear about as elected officials is the state of the subway system,” Corey Johnson, the City Council speaker, said in an interview with the New York Times. “To be able to tie these things together is something that could be highly impactful and potentially transformative.”

This would be a huge shift from the Governor who has tapped the brakes on any effort to fully legalize cannabis in the state. Cuomo was also quoted in the past to say that he believed marijuana was a gateway drug.  While the Governor did sign medical marijuana into law, the program was very restrictive. Lawmakers were willing to make concessions at the time to the Governor in order to get the legislation passed.

“This is a much different year given the assault of the federal government,” Governor Cuomo said to 1010Wins Radio. “There’s no doubt that New York has to stand up for itself and we have to fight Washington and we have to protect ourselves and we need state laws that do that.”

Polls also show support for legalization with 62% in favor. The NY Health Department has also recommended legalizing cannabis. The Governor held “listening sessions” throughout the year in order to get the public’s opinion on legalization, but maintained he was against recreational cannabis.

“The goal of this administration is to create a model program for regulated adult-use cannabis — and the best way to do that is to ensure our final proposal captures the views of everyday New Yorkers,” said Cuomo spokesman Tyrone Stevens.


Debra BorchardtDebra BorchardtDecember 17, 2018
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3min1170

Tilray, Inc. (NASDAQ: TLRY  )  has signed a binding letter of intent (LOI) to purchase hemp-derived CBD isolate from LiveWell Canada Inc. (CSE: LVWL), which will be sourced from the United States and Canada.  Hemp CBD is estimated to be a $22 billion market in the U.S. The product will be used for distribution of Tilray-owned wellness and medical products across North America.

LiveWell will supply Tilray with a minimum of 150 kilograms per month of wholesale CBD isolate cultivated and processed from hemp commencing in February 2019, through to July 2019. The amount then increases to a minimum of 300 kg/month for the remainder of the contract, until December 2019. Tilray has the option to increase the amount of CBD supply purchased to 500 kg/month, and there is an additional 12-month renewable option.

“Today’s announcement puts Tilray in a strong position to expand the availability of our products in existing and new potential markets,” says Brendan Kennedy, Tilray CEO. “We’re pleased about the opportunity to increase our capacity to supply high-demand CBD products in Canada.”

The recently passed 2018 Farm Bill in the U.S. presents an opportunity to enter the hemp-derived CBD industry and capitalize on it. The bill needs to be signed by President Trump, which is expected to happen this week before lawmakers leave for the holidays.

“We are pleased to have a strong partner such as Tilray in this emerging market,” said David Rendimonti, President and CEO of LiveWell Canada. “With the legal barriers lifting, we believe the market for hemp CBD could exceed all forecasts because of the huge shift to self-directed care and wellness among consumers.”

Regulations in Canada allow for the use of hemp as a source of CBD, as long as the product satisfies certain quality requirements. These new rules will allow for wholly-owned Tilray Inc. subsidiaries, Tilray Canada Ltd. and High Park Farms Ltd. to potentially utilize hemp-derived CBD to increase the supply of CBD medical and wellness products in Canada.

LiveWell Merger

On December 3,  LiveWell signed a binding letter of agreement to merge with Vitality CBD Natural Health Products Inc., one of the largest industrial hemp cultivation and extraction operations in North America, with approximately 20,000 acres harvested in 2018. The merger will bring together the U.S. and Canadian assets to create one of the first fully integrated CBD companies with a production capacity of CBD isolate anticipated to reach 3,000 kilograms per day by mid-2019; research, product development, and GMP manufacturing facilities; international sales and distribution networks; and experienced leadership


Debra BorchardtDebra BorchardtDecember 14, 2018
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4min2950

Organigram Holdings Inc. (OTC: OGRMF) reported a 131% increase in net sales of $12.4 million for the 2018 fiscal year versus $5.4 million in 2017. Sales for the fourth quarter increased 76% to $3.2 million versus last year’s $1.8 million for the same time period. Organigram said that the sales to the adult recreational use market will be reflected in the first quarter of fiscal 2019 which includes the three months ending November 30, 2018.

The company also reported net income of $20.5 million in 2018 up from $(10.9) million in 2017. Most of those gains came from the fourth quarter where Organigram clocked net income of $18 million versus a loss of $2 million for the same quarter last year.

“The importance of 2018 cannot be overstated for Organigram as well as the industry,” said Greg Engel, the Company’s Chief Executive Officer. “We are incredibly proud of our ability to meet the challenges of scaling our business in preparation for the adult recreational use market. We are pleased with our progress to date and believe that we have performed well in a highly competitive space while always maintaining a sustainable cost structure. Ultimately, it is our view that our Moncton Campus will be seen as a crown jewel in the industry as it is able to produce consistent, high-quality indoor grown product at scale to support our brands with the lowest dried flower cultivation costs reported to date in Canada.”

Gross margins increased to $52.5 million in 2018 from $(3.3) million in 2017. The company said that excluding fair value adjustments on biological assets, those figures would be $6.5 million and $(1.9) million, respectively.

Registered medical patients increased to 15,730 in 2018 from 7,404 in 2017 or 112%.

Looking Ahead

The company said that its 2019 sales will be dominated by adult recreational use revenue and that the company estimates first-quarter sales alone will top that of the full year for fiscal 2018. This despite only a portion of that quarter will include adult use sales. Organigram went even further and said that second quarter 2019 sales will beat the first quarter based on purchase orders received to date.

Organigram said that it believes that it currently has the leading market share position in the Maritime provinces of New BrunswickNova Scotia, and Prince Edward Island with a strong presence in AlbertaManitobaNewfoundland, and Ontario. As a reminder, the company has signed adult-use recreational supply deals or listing agreements with customers in nine out of the ten Canadian provinces (Quebec is the exception) and has already shipped to all nine of those provinces. Quebec remains a target for 2019.


Debra BorchardtDebra BorchardtDecember 13, 2018
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3min2680

Harvest Health & Recreation, Inc. (CSE: HARV)  has formed a joint venture with Aina We Would (AWW), LLC for a real estate investment vehicle that plans to provide funding to purchase cannabis-related real estate assets. In addition to a Harvest subsidiary, AWW is made up of two family offices, Aina Advisors LLC and Stadlen Family Holdings, LLC.

Aina and Stadlen have both committed to fund or arrange up to $100 million to fund projects for the joint venture. The statement said that AWW plans to buy, develop and finance new construction projects, engage in land purchases, capital improvements and sale-leasebacks to Harvest and other operators in the cannabis industry.

As a part of the arrangement, Harvest will have the opportunity to get lease rates below current market providers and then source permanent financing for the properties it acquires. Harvest may also use AWW for its construction and real estate development needs.

In addition, Harvest said that it was has committed to lending AWW a minimum of up to $30 million in short-term financing to permit AWW to seek out acquisition projects. The company said that the goal of the short-term financing was so that they could move quickly on projects.  These funds will be replaced by permanent financing provided or sourced by Stadlen and Aina.

“AWW gives Harvest an excellent funding option for the development of cultivations, manufacturing facilities, and dispensaries,” said Harvest President Steve Gutterman.  “This new vehicle, combined with the approximate $290 million we raised in conjunction with our recent debt and equity financing transactions, affiliate roll-up and recently completed acquisitions leading up to and following our listing on the CSE, gives us one of the strongest balance sheets in the industry.”

Harvest owns more than 40 cannabis licenses with a domestic footprint that includes real estate, equipment and other assets in 11 states, including Arizona, Arkansas, California, Colorado, Florida, Maryland, Massachusetts, Nevada, North Dakota, Ohio and Pennsylvania.

“Real estate is the lifeblood of the cannabis economy and a huge piece of any company’s bottom line,” said Harvest Executive Chairman, Jason Vedadi. “With this partnership, AWW has been structured to turn a significant cost center into a potential profit driver and to become a potentially attractive source of financing for Harvest’s expected expansion.”


Debra BorchardtDebra BorchardtDecember 13, 2018
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5min1020

HEXO Corp. (TSX: HEXO) (OTC: HYYDF) reported its financial results for the first quarter of the 2019 fiscal year with gross revenue of  C$6.7 million versus last year’s C$1.1 million for the same time period. The revenue figure includes C$5.2 million from legal adult-use cannabis sales during the first two weeks of legalization.

Still, the company delivered a net loss of C$14.7 million versus last year’s net loss of C$381,000. Hexo said that the increased loss was mainly due to higher expenses needed for expanding the scale of the operations as it prepared for the legalization of the adult-use market and the realization of stock-based compensation expenses in line with the increased headcount and market share price value of the company.

“HEXO hit tremendous milestones in the weeks following the legalization of adult-use cannabis,” said HEXO’s CEO and co-founder Sebastien St-Louis. “The company continues to honor its commitment to executing on its plans, which has led to a significant portion of our first quarter’s $6.7 million in revenue generated in just two weeks and represents more than a 500% increase over last quarter.”

Hexo said that it sold approximately 1,110,000 total gram in the quarter versus 539,000 in total fiscal 2018. Despite the new adult-use market, the company still experienced a 2% increase over last quarter in its medical cannabis sales.

“HEXO’s first quarter financials highlight the remarkable pace of its adult-use cannabis sales and put HEXO on-track to generate significant revenue this year”, added Mr. St-Louis.

Adult Use Sales

Hexo said that its adult-use sales totaled C$5.1 million during the quarter, which is a 371% increase over the C$1.1 million of medical sales in the first quarter of 2018, and a 5% increase over the C$4.9 million of total medical sales in all of fiscal 2018.

The sales volume in the first quarter of 2019 was 952,223 gram equivalents sold. With a limited ability to sell other forms of cannabis, dried flower represented 81% of gram equivalents sold during the period.

The company reported that adult-use revenue per gram was approximately C$5.45. Hexo said that this was reflective of the bulk of sales attributed to dried flower which commands a competitive market sales price. The remaining balance was made up of oil sales which get a higher revenue per gram equivalent.

The company statement said that 90% of all adult-use sales were realized in Quebec through the SQDC with the remaining 10% derived in Ontario and British Columbia via the OCS and BCLDB respectively.

Medical Cannabis Sales

Even though the focus has been on the new adult-use cannabis market, medical sales continue to be an important part of the equation. Revenue increased 30% to C$1.4 million compared to C$1.1 million in the same period last year. Hexo said that the higher revenue was driven by increased sales volume as well as higher Elixir oil sales which get a higher revenue per gram when compared to dried gram sales. Sequentially, revenue increased 2% reflecting a lower revenue per gram on the dried flower sales which decreased $0.22/gram due to the current period’s sales mix of products.

The sales volume for medical cannabis increased 30% to 157,504 gram equivalents, compared to 120,844 in the same prior year period, due to an increase in oil-based products as the product mix purchased by customers shifted towards smoke-free alternatives. Total dried grams sold increased 10% when compared to the same prior year period. Revenue per gram equivalent remained at $9.12 as compared the same prior year period. On a sequential basis, sales volume collectively increased 3% across both dried and oil sales.

Geographical sales in Ontario and Quebec increased 8% and 16% respectively.

 

 



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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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