Debra Borchardt, Author at Green Market Report - Page 2 of 43

Debra BorchardtDebra BorchardtDecember 4, 2018
DSCF3435-1132x670.jpg

5min1000

CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) has signed a binding term sheet to acquire certain business assets of California-based cannabis cultivator, Cub City LLC  for total consideration of $7,025,000. The deal is expected to close in March 2019.

Origin House will be purchasing a state-of-the-art craft cultivation facility with an annual production capacity of up to 1,400 kg of an ultra-premium flower. At that price, it would imply a purchase price of $5 per gram of funded capacity.

“This Acquisition was a logical next step for Origin House, led by the needs of our brand partners as we execute on our brand support and acceleration strategy,” said Afzal Hasan, President and General Counsel of Origin House. “Access to bespoke third-party cultivation is critical for new flower brands that want an authentic brand promise from seed to consumption. The existing alternative for brands is to use undifferentiated and mass-produced biomass available on the market. ”

Cub City was co-founded by a team that included Drew and Karen Duval of FloraCal. The facility and team have produced flower for some of the top packaged flower brands in California, as well as a prominent pre-roll brand.

In addition to the premium product that Origin House sought, the facility is located in close proximity to FloraCal’s 62,000 sq. ft. facility. Origin House said that the additional 24,600 sq. ft. cultivation capacity will be focused on third-party cultivation.

The company also said that both current and potential brand partners have highlighted the desire for bespoke exotic cannabis cultivation. This acquisition further expands Origin House’s brand support and acceleration platform and will allow the company to close pipeline opportunities with promising brands in California

Hasan added, “We are excited to continue growing our infrastructure and team to unlock further opportunities for growth that we have been cultivating with brand partners in California.”

Terms Of The Deal

The company statement outlined the following terms of the deal:

Under current Cub City management, the facility is undergoing construction with an estimated completion date of March 31, 2019.  Upon the completion of construction, the facility will be composed of a two-story building with 11,000 sq. ft of cultivation space, and 7,400 sq. ft of distribution, processing and packaging space in addition to 6,200 sq. ft of office space, storage, and common area

Within 30 days, Origin House will provide a construction loan facility (the “Loan”) to Cub City in an amount of up to USD$1,700,000. Funds advanced under the Loan will bear simple interest at 12% per annum and mature two years from the date of the first advance.  The Loan proceeds will be used for construction and equipment for the Facility

The Loan will be secured by a first ranking security interest on all present and future assets of Cub City and guaranteed by each of the members of Cub City on certain conditions

Key Assets

  • Some of the key assets, among others, to be purchased in the Acquisition include:
    • Cub City’s 20-year lease of the 24,600 sq. ft Facility; and
    • A 5-year local permit to cultivate, process, package and distribute cannabis. On Closing, Origin House will also have access to two state licenses: (a) a cannabis Type 11 Distribution License; and (b) a Small Indoor Cultivation license that may be used for future operations.

Included In Purchase Price

    • Forgiveness of the principal and interest accrued under the Loan (the “Loan Balance”);
    • $3,525,000 less the Loan Balance, in immediately available funds on Closing Date;
    • $3,500,000 on the one-year anniversary of the Closing Date (“Holdback Disbursement Date”). Cub City will have the option to receive the second payment in cash, shares of Origin House, or a combination of both but not less than 50% in shares.


Debra BorchardtDebra BorchardtDecember 4, 2018
cigarette.jpg

4min1970

Cronos Group Inc. (CRON) (TSX: CRON) confirmed on Tuesday that it was having discussions concerning a potential investment by tobacco company Altria Group Inc. (MO) in Cronos Group. The company statement said that “No agreement has been reached with respect to any such transaction and there can be no assurance such discussions will lead to an investment or other transaction involving the companies.”

The stock closed 11% higher on Monday after rumors of such talk sparked a run on the shares. The confirmation of the talks sent the stock another 15% higher and was lately trading at $11.23, below its 52-week high of $15.30. Yesterday Cronos sent an email to MarketWatch saying, “We do not comment on market rumors.” Last week, it was reported by The Wall Street Journal that Altria was considering taking a significant minority stake in e-cigarette company Juul Labs Inc.

In October, Altria, the maker of Marlboro cigarettes, was making headlines when it was rumored that it was in talks with another cannabis company Aphria. The Globe and Mail reported that Altria was considering an equity stake in Aphria (APHQF). However, the story source cautioned that a deal could take time to reach and that it could possibly end up not occurring. The Globe’s source said that the leadership teams from Altria and Aphria have met on several occasions. It was rumored that Altria would start with a minority stake and then ultimately push it to a majority stake.

Aphria issued a statement saying, “That there is no agreement, understanding or arrangement in place with a potential investor at this time” and then added, “Aphria will advise the investment community of any material changes, if and when they occur, in accordance with applicable disclosure requirements.”

Declining Sales

The Center for Disease Control and Prevention (CDC) reported that during 2017, about 249 billion cigarettes were sold in the United States—a 3.5% decrease from the 258 billion sold in 2016. Four companies—Philip Morris USA, Reynolds American Inc., ITG Brands, and Liggett—accounted for about 92% of U.S. cigarette sales.

By state, the average retail price of a pack of 20 cigarettes (full-priced brands), including federal and state excise taxes, ranged from $5.12 in Missouri to a high of $10.66 in New York, as of November 2016. On average, federal and state excise taxes account for 44.3% of the retail price of cigarettes.

Altria History

Altria was once known as called Philip Morris. It is based in Richmond, VA and its roots as a tobacco company date back to 1847 when it was founded in London. It was split off from Philip Morris in 2002. Its subsidiary NuMark is focused on developing and marketing e-vapor products for adult smokers and vapers. It also has a 10 percent equity investment in Anheuser-Busch InBev NV, the maker of Budweiser beer.

Altria generated more than $25.5 billion dollars in sales in 2017.


Debra BorchardtDebra BorchardtDecember 3, 2018
cresco2-1280x853.jpg

4min2200

Chicago-based Cresco Labs is set to begin trading on the Canadian Securities Exchange on Monday using the symbol CL. Cresco is headed by Chief Executive Officer Charles Bachtell who was also a founding member of the Illinois Cannabis Bar Association and the Medical Cannabis Alliance of Illinois.

Cresco hits the market with operations in six states (Illinois, Ohio, Pennsylvania, Nevada, California, and Arizona). The company focuses on entering markets with outsized demand potential, significant supply constraints and high barriers to entry. The company prides itself on its speed-to-market. It boasts that it can go from license to market in seven months.

In October, Cresco Labs closed on its oversubscribed Series D funding round securing $100 million (US), making it the second largest private funding round in U.S. cannabis history.

In November Cresco celebrated its pilot harvest from its seven-acre production site located in the Central Coast of California. The company said that it was partnered with a well-established horticultural producer in the region and had implemented the highest standard in medical cannabis production to cultivate high-quality, third-party certified cannabis products for the California adult-use market. Including the Central Coast cultivation production site, Cresco Labs will operate two cultivation/processing, one extraction and one distribution facility in California.

Its portfolio of brands includes Cresco, Remedi, Reserve and Mindy’s Edibles, an infused edible line with James Beard Award-winning Chef Mindy Segal. The products have been developed in order to address various consumer demands within the cannabis industry.

The flagship brand Cresco is available in Illinois and Pennsylvania, with Ohio, California, and Nevada on deck. Each product falls into one of three proprietary categories: Rise, Refresh, Rest, named and is color-coded to help the consumer identify the desired effects of the relevant strain’s cannabinoid profile. Mindy’s is currently available in Illinois and Nevada with Ohio and California to follow.

Reserve is a premium cannabis product that is sold in Illinois and Pennsylvania. Ohio, California, and Nevada are the next planned markets. Remedi is the medical cannabis product with an emphasis on CBD products. It is currently sold in Illinois and Pennsylvania with Ohio and Nevada to follow.

Cresco was founded after winning three merit-based cultivation licenses in the Illinois market. It has 110,000 square feet of cultivation in three facilities in the state and can yield enough product to service over 50 dispensaries. The company has since garnered more vertically-integrated licenses in Pennsylvania and Ohio. It has a facility located an hour from Pittsburgh and the first sale of medical cannabis occurred in their dispensary. In June, Cresco received a license to operate vertically-integrated dispensaries in the “Buckeye” state.


Debra BorchardtDebra BorchardtNovember 29, 2018
medmen4-1280x789.jpg

5min3710

MedMen Enterprises (MMEN) (MMNFF) reported that its fiscal year 2019 first-quarter revenue grew 1,094% to $21.5 million over last year’s $1.8 million for the same time period. Still, the company reported a net loss of $66.5 million, or a loss of $1.42 per share, a dramatic increase over last year’s loss of $5.7 million for the same time period. This was a slight improvement over the net loss of $78.7 million for the fourth quarter last year.

“Our first quarter performance underlines the successful execution of our growth strategy and ongoing commitment to provide mainstream cannabis consumers a wide breadth of products for their lifestyle and wellness needs,” said Adam Bierman, MedMen chief executive, and co-founder. “Our four-pillars strategy – built around a quality team, superior assets, strong balance sheet and the ability to efficiently and effectively raise and deploy capital – has set us up to successfully achieve our vision. We are now entering a new phase focused on fully operationalizing our vast footprint.”

Revenue Breakdown

The company said that the systemwide revenue was drawn from operations in California, Nevada and New York. The statement read that the year-over-year increase was driven primarily by the opening of seven additional retail stores and strong results from the California market. The Company operated 14 locations at the end of the first quarter. Southern California accounted for 86% of first quarter systemwide revenue and 8 out of the 14 open retail stores at quarter end.

The company noted that the quarter was impacted by a state-wide supply chain challenge in California during the month of July. That was when new regulations went into effect and many of the original products on the shelf no longer met those requirements. They were sold at deep discounts and then destroyed if it didn’t meet new regulations.

MedMen said its gross profit for the first quarter were $11.7 million versus $5.9 million in the previous quarter. This represents a 98% growth rate. Gross profit margin in the first quarter was 54% compared to 29% in the previous quarter.

Expenses

Expenses in the first fiscal quarter were $72 million and SG&A  included $4.8 million in marketing and branding, $16.3 million for salaries and benefits. Furthermore, SG&A expenses for the first quarter also included $1.4 million acquisition-related costs and $24.9 million of cash and non-cash stock-based compensation and employee incentive plans expense and $4.7 million for the state, local and federal tax-related expenses.

MedMen had $63.4 million in cash and cash equivalents at the end of the quarter. While MedMen has been able to sell more shares to raise additional capital, the expenses continue to outpace the revenue. The last capital raise was cut almost in half as the price of the shares dropped before the deal could be completed. The CFO James Parker also recently resigned and the company appointed Jim Miller as interim chief financial officer.

Since Quarter End

Since the first quarter ended, MedMen got its foot into the Illinois market through the pending acquisition of a licensed medical dispensary in Oak Park. It acquired a northern California licensed dispensary in the City of Emeryville outside San Francisco on October 10.

The company intends to acquire PharmaCann in an all-stock transaction valued at $682 million. The transaction will double the number of states where MedMen has licenses to 12, which accounts for over 50%of the total estimated 2030 U.S. addressable market of $75 billion as stated by the Cowen Group. Combined, MedMen and PharmaCann would be licensed for 67 retail stores and 14 factories, including pending acquisitions by MedMen.

MedMen agreed to acquire control of Kannaboost Technology Inc. and CSI Solutions LLC, collectively referred to as “Level Up,” in a cash and stock transaction valued at $33 million. Level Up holds licenses for two vertically-integrated operations in Arizona, including retail locations in Scottsdale and Tempe and 25,000 square feet of cultivation and production capacity in Tempe and Phoenix.

 


Debra BorchardtDebra BorchardtNovember 29, 2018
dixie-elixirs-big2-1280x762.jpg

3min2300

Dixie Brands, Inc. began trading on the Canadian Securities Exchange (CSE) on Thursday following the completion of a reverse takeover (RTO) of Canadian public company, Academy Explorations Limited. Dixie shares opened at C$1.05 and the shares traded as high as C$1.18 and as low as C$0.76.

Dixie History

Dixie was an early pioneer of cannabis branding beginning with a feature on 60 Minutes at a time when few cannabis product companies existed. It began with one product, the Dixie Elixir, a THC-infused soda, and the company has built up its portfolio to include more than 30 different categories across more than 100 individual products.

In 2018, Dixie entered into a Canadian license agreement with Auxly Cannabis Group Inc. (CBWTF), a vertically integrated global cannabis company. Under the agreement, Auxly will work with Dixie to create products for the adult-use recreational market in Canada. Those products will be developed and manufactured at Dosecann in the BioCommons Research Park in Charlottetown, PEI and Dosecann will serve as Dixie’s hub of cannabis research and innovation.

With regards to its domestic business, Dixie is currently operating in four states (ColoradoCaliforniaNevada, and Maryland) and plans to expand into four to six additional states in 2019 through partnerships with licensed and regulated producers in each state. The company has recently expanded its hemp-based offerings by introducing Aceso Wellness, a human dietary supplement line, and Therabis, a pet food supplement portfolio, at the end of 2016.

Past Management

Dixie has seen a change of management over the past couple of years as one of its original founders moved on to another company. Tripp Keber founded Dixie Holdings with Chuck Smith in 2010 in Colorado in the early stages of cannabis legalization with the THC-infused soda. In 2017, Co-founder Tripp Keber is resigned in order to take a new position that partnered Dixie with Rose Capital based in Miami, Florida. At the same time, Keber, also resigned from the board at MassRoots (MSRT) as that company’s founder Isaac Dietrich reclaimed his company.


Debra BorchardtDebra BorchardtNovember 28, 2018
stocks.jpg

6min1780

 

MJardin Group

MJardin Group, Inc. (CSE: MJAR), reported financial results for its third quarter ended September 30, 2018. The company’s revenue increased 65.1% to $7.0 million versus last year’s $4.3 million. The company said that the revenue growth was driven primarily by facility design and build-out fees earned from GrowForce for cultivation centers, interest on notes receivable and rent income earned from Buddy Boy Brands.

Still, MJardin delivered a net loss of $0.4 million versus last year’s net income of $0.6 million. The company attributed the loss to higher interest expense, compensation and benefits, and higher legal and consulting fees related to recent acquisitions, equity and RTO transactions.

“We are pleased to report our first quarterly results as a publicly traded company, continuing our strong growth trends and positive EBITDA,” said Rishi Gautam, Chairman of MJardin. “This is a very exciting time for MJardin with this month’s public listing of MJardin shares and the announcement of the proposed acquisition of GrowForce. We believe we are well positioned as one of the largest and most experienced cannabis operators in North America and as the largest multi-national operator.”

At the end of the third quarter, MJardin was managing 37 total facilities/operations. The company’s total operating expenses jumped by 58.9% to $5.8 million over last year’s $3.6 million. MJardin said that the increase reflects increased compensation and benefits to support that growth, including increased grow facility personnel at operator facilities and the continued expansion of the company’s executive team and corporate office personnel.

Subsequent to the quarter ending, MJardin completed an equity capital raise for approximately C$26 million. On November 13, 2018, MJardin completed the reverse take-over of Sumtra Holdings. On November 15, 2018, the company began trading on the Canadian Securities Exchange and the $26 million of subscription receipt proceeds were released from escrow and available to the Company.

iAnthus

Following the market close on Tuesday, iAnthus Capital Holdings (CSE: IAN, OTCQB: ITHUF) reported its earnings for the third quarter of 2018 ending in September. The sales for the quarter were $939,098 with a gross profit of $2.6 million. The net loss for the three months ending September 30, 2018, was approximately $10.0 million.

“iAnthus continues to execute,” said CEO Hadley Ford. “The company has expanded its footprint and added to its industry leading-team while maintaining a prudent balance sheet throughout the process. We are now generating revenue in five of the six markets in which we operate, with a significant number of dispensaries expected to open within the next few months. Assets are up 344% year-over-year as we grow the iAnthus platform across the United States. This performance, combined with the outlook for our Massachusetts, New York and Florida operations and the pending acquisition of MPX, position us very well for 2019.”

iAnthus reported that its consolidated revenues for the company increased 101% quarter-over-quarter, increasing to $1,074,398 in Q3 from $533,545 in Q2, yet these figures didn’t appear in the company’s filing. The company also said in its press release that system-wide revenues, including the revenues from iAnthus’ investments in New Mexico and Colorado, were $5,139,769 in Q3, up 16% quarter-over-quarter from $4,415,368 in Q2. These figures are unaudited and are not consolidated by the company at present due to certain regulatory restrictions.

In a statement, the company reported that its cash balance is currently $24.3 million. As of November 26, 2018, the Company had 20,933,995 warrants outstanding, all of which are currently in the money. iAnthus would receive approximately $54.5 million if all outstanding warrants were exercised.

Charlotte’s Web

Charlotte’s Web Holdings, Inc. (CSE: CWEB, OTCQX: CWBHF) reported financial results for the third quarter ending September 30, 2018. Organic revenue growth of 57% to $17.7 million versus last year’s $11.3 million for the same time period. Net income fell to $1.8 million from last year’s $2 million for the same time period.

Gross profits increased 54% to $13.8 million over last year’s $9 million for the same time period. Earnings per diluted share fell to two cents from last year’s three cents for the same quarter.

“During the third quarter we completed a successful initial public offering and private placement that generated significant capital for the company that is being deployed to accelerate our growth in the hemp-derived CBD sector,” said Hess Moallem, President and Chief Executive Officer. “This capital is being used primarily to expand the company’s cultivation and production capacities to meet the increasing demand for our industry-leading Charlotte’s Web products, both domestically and internationally.”

The company’s statement said that on a year-over-year basis for the third quarter, e-commerce revenue grew by 37% and wholesale, distributor and retail revenue grew by 118%. Revenue from human nutrition products and animal nutrition products grew by 42% and 153%, respectively (canine products were introduced in February of 2017).


Debra BorchardtDebra BorchardtNovember 27, 2018
Rise.jpg

4min2360

Cannabis multi-state operator Green Thumb Industries Inc. or GTI (GTII.CN) (GTBIF) reported that its third-quarter 2018 ending in September revenues increased 344% year-over-year to $17.2 million. Sequentially revenues increased 26%. The company attributed the rise in revenue to increased distribution of branded products, new store openings, and the start of adult use cannabis sales in Nevada.

The company statement said that GTI has operating revenue in five of its eight markets: Nevada, Illinois, Pennsylvania, Massachusetts, and Maryland and has increased capital investments related to the buildout of new markets in Florida, Ohio and New York in preparation for revenue generation in the first half of 2019.

Still, the company delivered a net loss of $3.3 million which was a decline sequentially from net income of $0.4 million in the second quarter of 2018. It was also a larger loss than last year’s $1.2 million for the third quarter of 2017.

“We have been focused on expanding wholesale capacity to meet increasing demand, opening new RISE stores and are unwavering in our diligent effort building a world-class team. To support our strong retail pipeline, we added experts to the team in retail operations, real estate, design and construction, and marketing and communications from retail giants such as Nordstrom, Starbucks, Home Depot, Whole Foods, Apple and Nike. We are excited about what’s ahead for RISE as we accelerate the growth of this exceptional business,” said GTI Founder and Chief Executive Officer Ben Kovler.

Balance Sheet

As of September 30, 2018, the company’s filing said that total assets were $297.6 million, including cash and cash equivalents of $149.8 million and long-term liabilities of $9.3 million. GTI has $7.6 million of total debt, $1.5 million of which is due within 12 months.

Looking Ahead

GTI said that it plans to more than double the RISE  retail stores over the next 12 months. In Florida,  the company signed nine leases for RISE dispensaries in high-traffic locations throughout the state, including West Palm Beach, Port St. Lucie, Deerfield Beach, Hallandale Beach, Delray Beach, Bonita Springs, Pinellas Park, Oakland Park, and Kendall.

In Pennsylvania, GTI opened a RISE store in partnership with KW Ventures Holdings LLC and the company expects to close the acquisition of KW Ventures Holdings in the first quarter of 2019. In Ohio, there is progress on the buildout of five stores in the pipeline.

Last month, GTI closed on a bought deal financing transaction raising $78.8 million, which included proceeds following full exercise by underwriters of their over‐allotment option. The company said it intends on using net proceeds from the offerings for business development, including wholesale capacity, strategic initiatives and working capital.

“We closed on the acquisition of KSGNF to operate in Florida, closed on the acquisition of an extraordinary retail asset in Boston, and are on track to more than double our footprint in the only limited license adult use market in the country with the strategic acquisition of Nevada’s top operator, Integral Associates, announced earlier this month,” Kovler continued. “All are important milestones as we position the business for long-term success by distributing brands at scale.”

 


Debra BorchardtDebra BorchardtNovember 27, 2018
money2-2.jpg

5min1590

Canopy Rivers (RIV.V) reported net income of C$10.9 million for the quarter ending in September versus last year’s net loss of C$2.1 million. The company has cash on hand of C$105 million versus last year’s C$46 million. Canopy Rivers is the investment arm of Canopy Growth (CGC). Canopy Rivers reported earnings per diluted share of seven cents.

During the quarter, the company completed an oversubscribed private placement of subscription receipts at C$3.50 for gross proceeds of approximately C$101 million, co-led by CIBC Capital Markets, GMP Securities L.P., and Eight Capital, and then followed on with a non-brokered private placement of subscription receipts for gross proceeds of approximately C$3.4 million.

“The second quarter was highlighted by several key milestones for Canopy Rivers, including the closing of our private placement financing, our go public transaction and listing on the TSX Venture Exchange, our first European investment, and several new developments from our existing portfolio companies,” said Bruce Linton, Chairman and CEO of Canopy Rivers. “With increasingly progressive global sentiment towards cannabis, a rapidly evolving regulatory landscape, and the increased volatility we have observed in the capital markets since legalization, the conditions are there for significant potential gains.  With our strong balance sheet, we believe Canopy Rivers is poised to make highly accretive investments in this robust sector.”

The companies that Canopy Rivers has invested in include:

  • PharmHouse Inc. – a North American greenhouse produce conglomerate with specialized agricultural, production, contract manufacturing, branding, distribution, and logistics experience. PharmHouse will operate out of 1.3 million square feet of newly constructed modern greenhouse infrastructure in Leamington, Ontario with the intent of becoming a licensed producer of high-quality greenhouse grown cannabis.
  • TerrAscend Corp.  (CSE:TER)  – a biopharmaceutical and wellness company providing quality products, brands and services for the global cannabinoid market. TerrAscend has secured supply agreements with the provinces of Ontario, British Columbia, Nova Scotia and PEI and launched a premium cannabis brand, Haven Street, for the Canadian adult-use market.
  • Radicle Medical Marijuana Inc. – a licensed cultivator producing premium indoor small-batch cannabis that is hydroponically grown and processed with a craft methodology and proprietary dry, trim and cure processes. Radicle was one of twenty-six licensed cannabis producers selected by the Ontario Cannabis Store in a highly competitive product call for recreational sale online and one of two entities selected despite only having a license to cultivate at the time.
  • Les Serres Vert Cannabis Inc. – a greenhouse property that has been upgraded and retrofitted, and recently received a license amendment from Health Canada increasing the greenhouse production footprint from 40,000 to 525,000 square feet licensed operating space available for cannabis production.
  • Agripharm Corp. – a licensed company under the Cannabis Act, and is a joint venture between Canopy Growth and the owners of globally-recognized cannabis brands Green House Seeds and Organa Brands.
  • James E. Wagner Cultivation Ltd. (JWCA.V) –  a licensed cultivator focusing on producing clean, consistent cannabis.
  • Civilized Worldwide Inc. – an international modern media company and lifestyle brand focused on elevating cannabis culture.
  • Spot Therapeutics Inc. – a large-scale indoor production and distribution facility located in Fredericton, New Brunswick.
  • LiveWell Canada Inc. (LVWL.V) – a Canadian hemp and cannabis company focused on advanced research of CBD and other cannabinoids, as well as developing and distributing prescription and consumer health and wellness products.
  • Aldershot Resources Ltd. d.b.a. Solo Growth Corp. – a retail-focused cannabis strategy with store locations branded as “YSS by Solo” led by the principals of Solo Liquor Stores Ltd., a leading Canadian private liquor retailer.

 

 


Debra BorchardtDebra BorchardtNovember 27, 2018
money2.jpg

3min1560

Altitude Investment Management is closing its Fund I on November 30, 2018, with $30 million raised. Altitude is led by John Brecker, Jon Trauben, Michael Goldberg, and Roderick Stephan. Fund I opened on March 1, 2018, and the company said that it has invested in 16 companies from early-stage to growth companies. The company plans to launch Fund II at the beginning of 2019 and hopes to raise $100 million.

Partner Jon Trauben sums up Altitude’s Fund I strategy by saying: “We sought reasonable valuation entry points taking advantage of early illiquidity and inefficiency due to the existing federal prohibition.”

Fund I’s portfolio consists of some of the leading firms spanning the North American cannabis industry with concentrations in plant-touching operators/brands/distribution and non-plant-touching companies providing compliance, advertising/marketing, ag-tech and data solutions including:

  • BDS Analytics, the leader in cannabis business intelligence.
  • Canndescent, a leading California ultra-premium brand with world-class management and best practices from consumer-packaged goods, advanced agriculture, and luxury lifestyle marketing.
  • C4 Distro, a leader in the California cannabis distribution market that provides quality distribution services to California’s extremely fragmented market of suppliers and retailers.
  • Enlighten, the leading in-dispensary digital marketing platform.
  • Flowhub, a leading seed-to-sale compliance and robust point-of-sale SaaS platform in partnership with Hewlett Packard.
  • Front Range Bio, an agricultural biotech company that specializes in tissue culture propagation of high-value crops at industrial scale to improve reliability, efficiency, and safety.
  • GrassRoots, a fully-licensed, vertically-integrated multi-state cannabis company active in cultivation, extraction, manufacturing, branding, and retailing.
  • Loud Pack Farms, a leading California vertically-integrated cannabis consumer products company with a family of brands including Loudpack, Kingpen, Double Barrel, and Honey Pot.
  • PathogenDX, a provider of a patented DNA-based disruptive testing technology for state-mandated microbial testing and environmental screening.
  • Segra, a Canadian plant biotechnology company that specializes in industrial-scale plant micropropagation and plant genotyping services.
  • Würk, which helps cannabis companies provide the necessary human resources and payroll infrastructure to manage their employee’s needs and to stay compliant with government regulations.

Partner Michael Goldberg added, “As the cannabis industry matures, more companies will require significant growth capital to fund product, service and geographic expansion. In addition, increasing competition will create the need for consolidation, merger, and acquisition and distressed investment opportunities. A larger capital base in Fund II will ideally position Altitude to take advantage of these opportunities.”

 

 


Debra BorchardtDebra BorchardtNovember 26, 2018
missionIL_exterior.jpg

5min1630

Cannex Capital Holdings Inc. (CSE: CNNX) (OTCQX: CNXXF) and 4Front Holdings signed a binding letter agreement to combine in an all-stock deal.  The combined company will continue to trade on the CSE under Cannex’s existing name and the ticker symbol CNNX. The stock fell over 10% on the news to lately trade at C$0.98.

According to the company statement, the new combined company will own, operate or manage six existing cultivation and production facilities in Washington, Illinois and Massachusetts and five retail operations in Illinois, Massachusetts, Maryland, and Pennsylvania. 4Front also has licenses or licensing agreements in place that will enable it to open and operate several more dispensaries in Massachusetts, Maryland, and Pennsylvania under the Mission brand, which should bring the total number of related operations to 20 by year-end 2019 within the combined company’s existing asset base.

4Front Co-founder and CEO Josh Rosen will become CEO of the combined company while Cannex’s CEO Anthony Dutton will take on the senior capital markets and business development role. Leo Gontmakher, COO of Cannex, is expected to assume the same role in the combined company.

This is an exciting and transformational step as 4Front and Cannex come together to realize our common objective of building a premier cannabis business focused on operational excellence and integrity across the value chain,” said Rosen. “The operations and leadership that Cannex has demonstrated in Washington, one of the most competitive cannabis markets in the world, are unlike anything I’ve seen in the industry. Leo and his team have developed an amazing set of skills and capabilities that we look forward to transferring to 4Front’s existing portfolio, as well as using to capitalize on new opportunities we develop together.”

Cannex

The merger agreement follows Cannex’s November 21, 2018 announcement that Gotham Green Partners’ (GGP) invested $32 million into Cannex. Jason Adler, Managing Member of GGP, noted, “We are excited by the proposed Cannex and 4Front business combination, which is expected to accelerate the deployment of Cannex’s operational capabilities across a broad suite of unique licensed assets. We expect cannabis investors to ascribe increasing value to operational productivity and efficiencies. We believe that 4Front and Cannex have very complementary assets and skill sets, and we look forward to working with them to accelerate their growth.”

Cannex owns two large-scale indoor cultivation facilities and a production and logistics facility in Washington State. Its strategic operating tenant, Northwest Cannabis Solutions, boasts strong cultivation yields and produces some of the top-selling flower and infused-product brands in Washington. It has managed to capture approximately 8% share of the wholesale market in one of the most competitive markets in the country. NWCS employs more than 190 people and currently has an annual revenue run rate of approximately US$40 million.

“Cannex has been evaluating the best platforms to extend our production capabilities into new markets and 4Front is a natural fit given their complementary capabilities, existing portfolio and pipeline, and strong culture,” said Gontmakher.

4Front

4Front operates most of its dispensaries under the Mission brand. It has developed a national platform that consists of a multi-state footprint and a far-reaching network of partnership relationships.

 

 



About Us

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


READ MORE



Recent Tweets

@GreenMarketRpt – 18 hours

Please help support Go visit our Patreon page

@GreenMarketRpt – 20 hours

$HARV.CN $HTHHF Harvest Forms $100 Million Joint Venture For Real Estate Projects

@GreenMarketRpt – 20 hours

$HEXO $HYYDF ⁦@Hexocorp⁩ Hexo Reports C$5.2 Million For Just Two Weeks Of Adult Use Cannabis Sales #earnings…

Back to Top

You have Successfully Subscribed!