Editor-in-Chief

Debra BorchardtDebra BorchardtMay 30, 2019
MJardin2.png

3min1160

MJardin Group, Inc.  (CSE: MJAR) (OTCQX: MJARF) reported its financial results for the quarter ending March 31, 2019, in Canadian dollars. The company delivered revenues of $10.9 million versus last year’s $6.7 million for the same time period.

MJardin said it continued to see improvements in the sales of Cannabis from its WILL facility, recording $1.1 million in sales in the first quarter with a $0.8 million fair value adjustment to inventory. The Colorado operations generated $8.9 million in sales.

The net loss was $7.7 million versus last year’s $1.3 million. Total expenses increased to $3.4 million from $1.8 million. General and administrative expense increases were attributed to the GrowForce Holdings acquisition. The company underwent corporate cost-cutting measures late in the first quarter of 2019 and the company said the resulting expected annual SG&A and Payroll expense run rate is approximately $12.1 million.

“Our Q1 results reflect the successful implementation of our operating plans.  We refocused our priorities back to what we do best: grow high yield premium products,” said Adrian Montgomery, Chairman, and Interim CEO. “We made considerable progress towards the completion of our build outs and expansion of our U.S. and Canadian facilities, committed to smart and strategic growth decisions, and utilized the impressive industry talent we have on our team to improve our earnings and bolster our capital position. In Q2 we will start recognizing the benefits of the SG&A cost-cutting initiatives we started at the end of Q1. We will continue to develop and build demand for our premium product lines and evaluate more tuck-in opportunities where we can confidently and responsibly deploy smart capital.”

Post Quarter End

Following the end of the quarter, MJardin acquired Nevada edible producer Carson City Agency Solutions dba Cannabella. This past week, the company completed construction of its 76% owned “GRO” cultivation facility in Dunnville, Ontario. Plus, the company said it submitted the Evidence of Readiness package to Health Canada for the purposes of receiving a Cultivation and Processing Licence. On May 29, 2019, MJardin said it amended the terms of its existing loan with the senior lender to remove the callable feature and convert into a term loan, this enables MJardin to simplify the Company’s capital structure and fully focus on executing the operational plan.


Debra BorchardtDebra BorchardtMay 29, 2019
Acreage2.png

5min3220

Acreage Holdings, Inc.  (ACRG-U.CN) (ACRGF) reported financial results for the quarter ending March 31st, 2019 with revenue rising 487% to $12.9 million, but the company also delivered a whopping net loss of $31.2 million.  Looking at pro forma results, the revenue would have been $33.1 million and the adjusted net loss would have been $15.5 million.

“I am pleased with the progress we made toward increasing our national footprint and particularly our expansion in the western United States.  Our revenues grew by 487% compared to the first quarter of 2018, despite delayed dispensary openings caused by local regulators in both Massachusetts and Ohio,” said Kevin Murphy, Founder, Chairman and Chief Executive Officer of Acreage.  “We do not expect these delays to impact our long-term ability to generate industry-leading returns.  Additionally, we expect our arrangement agreement with Canopy Growth will provide us the ability to rapidly accelerate our growth plan as the transaction makes us the most attractive partner in U.S. cannabis.”

On the company’s conference call, Murphy said he wanted the company to become the “Proctor & Gamble of cannabis.” He highlighted the Form Factor acquisition saying it was a prudent use of shareholder money. Suggesting that other companies were paying high prices for fewer returns on their acquisitions.

Canopy Growth Acquisition

The company announced that it was being acquired by Canopy Growth Corporation at a time in the future when the laws of the United States change such that Canopy Growth is permitted to acquire Acreage. It is projected to have a window of 7.5 years for this to occur.

“The immediate benefit our investors get is cash up front,” said Murphy. “Then Acreage will take full advantage of Canopy’s amazing brand portfolio, IP, and technology for zero payments. We’ll also have an additional 63.2 million shares of stock to use for investments. Our phones are ringing from cannabis operators across the country stating their desire to be a part of the operation.”

Murphy also noted that the agreement is not capped at a specific dollar amount. “It’s already 50% higher than the original valuation,” said Murphy. “It would really be $5.3 billion on a fully diluted basis. More than a 100% increase from when we accessed public markets six months ago. Your shares worth $31.64 this would imply an upside of 67% to the closing from this past Friday.”

The company stated that announced shareholders in aggregate holding approximately 91% (exceeding the 66 2/3% required threshold) of all votes eligible to be cast at the special meeting of Acreage shareholders to be held on June 19, 2019 have indicated support “FOR” the Canopy Growth agreement.  This includes approximately 38% of votes eligible to be counted for purposes of the disinterested shareholder approval, which requires a majority of votes cast at the Special Meeting.

Looking Ahead

Following the end of the quarter, Acreage expanded its geographic footprint from 19 to 20 states with its acquisition of Deep Roots Medical in Nevada. The company said it has approximately $140M in liquid capital; $64M in cash and cash equivalents and $75M of highly liquid short-term investments on hand as of Q1’19.

Murphy also spoke of the Deep Roots acquisition. Noting it distributes products to 80% of Nevada’s dispensaries. “We have very high expectations of our Nevada business,” said Murphy on the earnings call.

The company has an agreement to acquire the Kanna dispensary in Oakland and expects to open as The Botanist this summer. The company also plans to launch three brands this summer: The Live Resin Project, The Botanist Herbalist Series, Natural Wonder.

 


Debra BorchardtDebra BorchardtMay 28, 2019
shutterstock_513689059-1280x854.jpg

4min3100

Cannabis Strategies Acquisition Corp. which will now be known as AYR Strategies Inc. began trading today on the NEO Exchange in Canada under the symbols NEO: AYR.AAYR.RT and AYR.WT. AYR is the first recreational cannabis-focused company with an enterprise value over a billion dollars to list on NEO.

As part of its qualifying transaction to be listed on the NEO Exchange, CSA acquired five distinct cannabis businesses operating in Nevada and Massachusetts consisting of three cannabis cultivation and production facilities and eight dispensaries.

“With today’s five acquisitions, AYR begins its next phase as a vertically integrated Multi-State Operator (M.S.O) and a leader in the U.S. cannabis market,” stated Jonathan Sandelman, CEO, AYR. “AYR will aggressively seek additional growth both organically and through accretive external opportunities.” The company has tapped Wall Street for its C-suite. Sandelman is a former President at Bank of America and Jennifer Drake, the company’s COO is a former Managing Director of Goldman Sachs.

CSA completed its initial public offering as a Special Purpose Acquisition Corporation (SPAC) in December 2017 and said it was the first SPAC to list on NEO. The NEO Exchange is home to over 70 corporate and ETF listings, and consistently facilitates over 10% of all Canadian trading volume.

“We are very happy today to see the full circle completed by CSA, the first special purpose acquisition corporation focused on the cannabis sector and the first special purpose corporation to list on NEO,” said Jos Schmitt, President and CEO, NEO.“Congratulations to AYR on its debut following CSA’s qualifying transaction as a billion-dollar company. As a stock exchange for senior listed companies, we are excited and motivated to be capital-raising partners on the front lines of an exciting industry. We look forward to watching the growth of AYR within the North American cannabis market.”

Investors can trade securities of AYR through their usual investment channels, including discount brokerage platforms and full-service dealers.


Debra BorchardtDebra BorchardtMay 28, 2019
CBDLion.png

4min2731

Acquired Sales Corp. (OTC Pink: AQSP) signed a letter of intent to acquire 100%  Illinois-based Warrender Enterprise Inc. also known as Lifted Liquids for approximately $7.5 million in cash, plus 4,545,455 shares of Acquired Sales Corp.’s common stock. Those shares were lately trading at $2.45.

The deal is subject to several conditions including the completion of an acceptable due diligence investigation and audit of Lifted Liquids, completion of a capital raise of at least $9 million by Acquired Sales Corp., execution of definitive acquisition documents, receipt of a tax opinion on the transaction, obtaining all necessary approvals, and the completion of all necessary securities filings.

Lifted Liquids was founded in 2015 and produces its own lines of CBD-infused products, CBD devices, research and development of CBD and vape brands and products for private label clients. The statement noted that Lifted Liquids has a unique raw goods/CBD supply chain that many customers benefit from: CBD and CBG isolate, full spectrum and broad spectrum water soluble and distillate.

Lifted Liquids CEO Nicholas S. Warrender said: “We are absolutely thrilled to join forces with like-minded individuals operating companies who are focused on the consumer first. Our goal is, and always has been, to help people improve their lives through quality products and to create a company that serves as a magnet to attract high caliber individuals with harmonious values and character.” Warrender will continue as the CEO of Lifted Liquids under a long-term employment agreement, and Lifted Liquids will operate as a wholly-owned subsidiary of Acquired Sales Corp.

CBD Lion Acquisition

Just a few weeks ago Acquired Sales said it planned to buy another Illinois company CBD LION LLC and said it planned to change the combined company’s name to CBD LION CORP. to emphasize its vision to become the national leader in the CBD products industry. Acquired Sales has already acquired 4.99% of rapidly growing CBD-infused beverage and products maker Ablis Holding Company and of craft distillers Bendistillery Inc. and Bend Spirits, Inc. Bend, Oregon.

William C. “Jake” Jacobs, CPA, President and CFO of Acquired Sales Corp., said: “We are excited about partnering with Nick and the Lifted Liquids team. Lifted Liquid’s growth reflects Nick’s outstanding leadership and his team’s determination to deliver the highest quality products to Lifted Liquids’ customers. On top of that, Lifted Liquids and Nick bring a lot of proven industry and regulatory experience, and an expansive network, which gives Lifted Liquids a competitive edge.”


Debra BorchardtDebra BorchardtMay 24, 2019
stocks.jpg

3min2330

SLANG

SLANG Worldwide Inc. (CSE:SLNG) elected to exercise its right under the warrant indenture governing the common share purchase warrants of the company issued on July 23, 2018, to accelerate the expiry date of the Warrants. Slang may accelerate the expiry date of the Warrants if, at any time prior to July 21, 2020, the closing trading price of the common shares of the company on the Canadian Securities Exchange exceeds $1.75 for a period of at least 20 consecutive trading days. As of the close of markets on May 23, 2019, the closing trading price of the Common Shares on the CSE exceeded $1.75 per Common Share for more than 20 consecutive trading days.

As of May 23, 2019, a total of 9,101,927 of the 13,436,005 originally issued Warrants had yet to be exercised. Each Warrant is exercisable to acquire one Common Share at an exercise price of $1.15. Consequently, if all Warrants are exercised, proceeds to the Company will total $10,467,216.05.

Flowr

The Flowr Corporation (TSXV: FLWR) (OTC: FLWPF)  announced that the Nasdaq Stock Market has approved the Company’s application to have its common shares listed on the Nasdaq Capital Market. A trading date will be announced once the company’s Form 40-F registration statement becomes effective with the SEC. The common shares will be listed on the Nasdaq under the symbol “FLWR”. The Company’s common shares listed on the TSX Venture Exchange will continue to trade under the symbol FLWR.

Green Growth Brands

 Green Growth Brands, Inc. (CSE: GGB) (OTCQB: GGBXF) approved the grant of an aggregate of 595,000 restricted share units under the company’s equity incentive plan to certain of its employees. The RSUs will be granted to the RSU Recipients as compensation for their services to the company and as an incentive mechanism to foster the interest of such persons in the long-term success of the company.

True Leaf Brands

True Leaf Medicine International Ltd. (CSE: MJ) (OTCQX: TRLFF)  announced today that, effective immediately, the Company is officially changing its corporate name to True Leaf Brands Inc. 


Debra BorchardtDebra BorchardtMay 21, 2019
plant2.jpg

3min2000

 Australis Capital Inc. (CSE: AUSA) (OTC: AUSAF) entered into an asset purchase agreement with Green Therapeutics, LLC and affiliated companies, to acquire its Tsunami, Provisions, and GT Flowers cannabis brands in a deal valued at $8 million. The deal is expected to close in late 2019.

In addition to the brands, Australis is also buying certain operating assets, intellectual property and the right to assume, complete and expand the construction of a state-of-the-art 55,000 square foot cultivation and production facility in North Las Vegas, Nevada.

Australis said it will issue common stock to complete deal and an additional $800,000 will be issued when the new cultivation and production facility in North Las Vegas is fully licensed and operational and an additional $800,000 in shares will be issued if certain performance goals are reached utilizing the acquired assets within specified timeframes per the definitive agreement.

“Green Therapeutics and Australis’ combined assets, expertise, and network positions our company for tremendous growth and is uniquely positioned with products spanning verticals where long term margins will be insulated,” said Scott Dowty, CEO of Australis. “Introducing Mr. Natural’s Veteran Affairs registered premium organic strains and proprietary cultivation methodologies to Nevada through a purpose-built facility will serve as the launching ground for a nationally recognized cannabis brand.”

In a separate transaction, Australis acquired from Meridian Companies LLC an 8.9-acre parcel of land in North Las Vegas in exchange for $2.93 of its common stock or 3,585,521 Australis common shares where the new cultivation and production facility will be located.

The 8.9-acre parcel of land in North Las Vegas has the potential to support a 400,000 square foot cultivation and production facility which will be built to the industry recognized Aurora Cannabis standard. The acquisition will include GT’s operating team. Australis expects the 55,000 square foot facility will generate approximately $10-12 million in EBITDA in its first full year of operations, respectively, resulting in an adjusted purchase price multiple of approximately 2.0 – 2.3x including the cost of the buildout of the new facility.

“We are excited to be working with Australis’ top tier management team and leveraging their strategic relationship with Aurora Cannabis,” said Dr. Duke Fu, CEO of Green Therapeutics. “This gives us a fantastic opportunity to scale our current brands inside and outside Nevada while maximizing Australis’ portfolio assets and vast cultivation experience.”


Debra BorchardtDebra BorchardtMay 20, 2019
IMG_4202-1280x960.jpg

3min2690

President candidate Kirsten Gillibrand met with several top cannabis influencers in New York on Monday in a listening session to determine what she could do to improve the problems facing the quickly growing industry. Gillibrand has been supportive of the industry and has received an A grade from NORML. She also co-sponsored a bill from Sen. Cory Booker of New Jersey to legalize marijuana nationwide.

Now she wants the cannabis industry to support her back.

The Democratic front-runner Joe Biden, has a long history of anti-cannabis positions but has recently begun to shift his position towards cannabis. Biden now approves of decriminalization and rescheduling cannabis to a classification of 2. He also approves of expungement of cannabis crimes. It’s a big change in attitude towards cannabis from Biden, but it falls short of full legalization which is where Gillibrand is positioned.

Another leading candidate, Mayor Pete Buttigieg has said little about his position on cannabis if he were elected. Beto O-Rourke was the chief sponsor of one piece of drug reform legislation and cosponsored several others while he was in Congress. He is in favor of descheduling cannabis.

Senator Gillibrand feels strongly about protecting female and minority-owned businesses in the cannabis industry. She told the group that it will be important to protect inclusion in the cannabis industry because it will easily become taken over by the usual business power brokers.

“If I am President, I would use the Small Business Administration to help women and minority-owned businesses get the financial help they need in order to compete with the wealthier, established players,” she said. Gillibrand is in favor of expungement and investing back into communities that were hurt by the war on drugs. She wants to address social injustice.

Odds Of Winning

In April, Gillibrand was ranked as ninth by The Fix for her chance to be elected as President. Then Joe Biden tossed his hat into the ring and quickly became the front-runner. CNN has kept Gillibrand in ninth place as Sen. Bernie Sanders and O’Rourke slipped. She could use the backing of the cannabis industry to propel her forward and get the boost she needs in order to make it to the early debates.

In addition to championing the cannabis industry, Gillibrand has also seized on women’s reproductive rights as another area she is passionate to fight for. Cannabis and women’s reproductive rights could be the key for Gillibrand to differentiate herself in the crowded field.


Debra BorchardtDebra BorchardtMay 20, 2019
Organigram3.jpg

4min2930

Canadian-based Organigram Holdings Inc. (TSX VENTURE: OGI) (OTCQX: OGRMF)  will begin trading on the NASDAQ Global Select Market on May 21, 2019. The company will continue to list its common shares on the TSX Venture Exchange under the symbol “OGI.”

“As a management team we are seeing increased interest from investors in the U.S. and internationally and believe that having a listing on the NASDAQ will facilitate trading,” said Paolo De Luca, Chief Financial Officer of Organigram. “In addition, based on precedents in the cannabis space, we expect trading volumes to increase which should result in increased liquidity for all investors”.

The company has also hired Native Ads, Inc. to manage a digital media marketing campaign and entered into an agreement with Hybrid Financial Ltd. to provide marketing services to advisors, brokers and institutional investors in North America.

Organigram has developed a portfolio of legal adult use recreational cannabis brands including The Edison Cannabis Company, Ankr Organics, Trailer Park Buds and Trailblazer. Organigram’s primary facility is located in Moncton, New Brunswick and the Company is regulated by the Cannabis Act and the Cannabis Regulations (Canada).

Investment in Chocolate

Organigram also announced a $15 million investment commitment in a high-speed, high-capacity, fully-automated production line with the ability to produce an estimated 4 million kilograms of exceptional chocolate cannabis edibles per year. Organigram said it expects to take delivery of the line in the fall.

The company said that the line is expected to allow Organigram’s product development team to introduce chocolate innovations unique not only to the cannabis industry but to the chocolate industry as a whole.

“Over the last number of years, Organigram has become known for its best-in-class cannabis production facility and high-quality products,” says Greg Engel, CEO, Organigram. “With this investment, we will soon also be known for our world-class chocolate production capability.”

Organigram’s foray into chocolate is led by a product development and production team with more than 25 years of combined chocolate experience and expertise. As previous Vice President, Operations at Ganong Bros Limited, Jeff Purcell, Organigram’s Senior Vice President of Operations, will leverage his many years of chocolate experience to implement and manage the project. The company has also recruited a marketing, product development and a research team led by Ginette Ahier, previously of Adorable Chocolate, and Mouna Gharsallah, previously of Tunisia based Sotuchoc.

The full Organigram chocolate offering that is under development is expected to be supported by a carefully curated collection of partners and suppliers identified for their own global expertise and unwavering commitment to quality. The investment will contribute to a state-of-the-art chocolate molding line and a fully integrated packaging line, that includes advanced engineering, robotics, high-speed labeling, and automated shipping carton packing.

“Not only have we invested in exceptional technology, but we have also brought an outstanding team to the table,” says Engel. “I don’t believe there is another team assembled out there that can rival ours when it comes to understanding – and reimagining – the potential of chocolate cannabis-infused edibles.”


Debra BorchardtDebra BorchardtMay 17, 2019
money4-2.jpg

3min1790

Origin House, formerly known as CannaRoyalty (CSE: OH) (OTCQX: ORHOF)  announced preliminary unaudited revenue of approximately C$11 million for the first quarter ending March 31, 2019. No profit or loss numbers were revealed.

The company also noted that April was off to a good start with approximately C$6.5 million in unaudited revenue. The wholly-owned distribution division, Continuum contributed approximately $4.8 million of that amount in April.

“As we outlined on our Q4 call less than a month ago, momentum is building in the California market for all legal players and for Origin House specifically. Q1 and the month of April were record revenue periods for the Company, and also record periods for the number of top California cannabis brands that our team successfully onboarded,” said Marc Lustig, Chairman and CEO of Origin House. “If 2018 was a year of building for Origin House, 2019 is rapidly progressing toward an inflection point where the platform we have built begins to demonstrate its true financial power, with brands signed early in the year, rolling-out through our network and a robust pipeline of brand opportunities ahead of us.”

The approximate gross margin for the first quarter was 15% and the company said it expects gross margin to continue to trend upwards from the first quarter to the second.

The company announced on May 3, that it had obtained an interim order from the Ontario Superior Court of Justice in which Cresco Labs Inc. will acquire all of the issued and outstanding shares of Origin House. Receipt of the interim order authorizes Origin House to hold its special meeting of shareholders on June 11, 2019.

Lustig added, “I very much look forward to working alongside the team at Cresco Labs Inc. to leverage our complementary footprints and management skillsets to build a dominant North American cannabis consumer brands company.”

Both Cresco Labs and Origin House will release their earnings on May 29.


Debra BorchardtDebra BorchardtMay 16, 2019
shutterstock_697660129.jpg

5min7350

SOL Global Investments Corp.  (CSE: SOL) (OTCQB: SOLCF) has entered into letters of intent to acquire California-based ECD, Inc., which operates as Northern Emeralds in a deal valued at $120 million. The purchase price will be satisfied by the issuance of common shares in CannCure Investments Inc. and the deal is expected to close on or before August 1.

Northern Emeralds is located in Humboldt County, California and is a cannabis cultivation, processing, and distribution company that has six licensed dispensary companies in the state that will operate under the nationally recognized “One Plant” brand. SOL Global said it intends to open One Plant-branded dispensaries throughout California (a total of 20 operating and licensed dispensary companies), Florida, and Michigan.

“Simply put, Northern Emeralds is the most advanced cannabis producer in the most famous cannabis-producing region in the world, and SOL Global is thrilled to integrate the Northern Emeralds family within our comprehensive U.S. cannabis strategy via the MSO,” said Brady Cobb, CEO of SOL Global. “This partnership enables SOL Global to deploy Northern Emeralds’ best in class genetics, method and data-based cultivation, and processing operations across our entire portfolio. This integration, combined with the carefully curated retail concept and dispensary locations offered by One Plant – as well as SOL Global’s roster of consumer-favorite brands – further cements SOL Global’s and ultimately the MSO’s position as a vertically-integrated multi-state powerhouse that is poised to drive substantial revenue growth in three of the most important cannabis markets in the United States.”

One Plant is a chain of nationally-recognized cannabis dispensaries with additional planned locations throughout CaliforniaFlorida, and Michigan.  One Plant dispensaries will also feature some of the best-known brands in the cannabis industry, including products from Northern Emeralds, Honey, Plus Brands, Venice Cookie Company, Old Pal, DomPen, Big Pete’s, Biscotti, and Cannabis Quencher, among many others. SOL Global said that One Plant intends to open nine dispensaries throughout California in 2019, and an additional eleven dispensaries in the state in 2020 and is currently in various development and approval stages for dispensary locations in Monterey CountyPalm SpringsContra CostaAtwaterGoleta, and Placerville, among others.

One Plant intends to open five dispensaries in Florida in 2019 and an additional eight dispensaries in Florida in 2020. The MSO, once it is fully established, intends to convert three existing Michigan dispensaries to One Plant-branded locations in 2019, intends to open an additional four dispensaries in Michigan in 2019, and intends to open an additional six locations in Michigan in 2020. In total, One Plant intends to have 46 dispensary locations in operation throughout the three states by the end of 2020.

“I am thrilled to join the Northern Emeralds team and brands with the SOL Global and One Plant families” said Cody Stross, founder and C.E.O. of Northern Emeralds. “We are passionate about ‘sharing with the world’ that which we started in a garage in Humboldt County over eight years ago. We cultivate the ‘highest intent of the seed’ and I can think of no better partnership to realize this dream.”



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 – 7 hours

Executive Spotlight: Ben Kovler, CEO, Founder & Chairman of Green Thumb Industries (GTI)

Back to Top

You have Successfully Subscribed!