Debra Borchardt, Author at Green Market Report - Page 2 of 54

Debra BorchardtDebra BorchardtApril 11, 2019
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3min4770

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) received approval from the Illinois Department of Financial and Professional Regulation (IDFPR) for Cresco’s previously announced acquisitions of licensed medical cannabis dispensaries MedMar Rockford and MedMar Lakeview, located in the popular Wrigleyville neighborhood of Chicago.

According to Arcview Research, Illinois’ medical market is projected to have 126,566 legal consumers in 2022 and they are expected to spend approximately $400.5 million in 2022.

The company said that the IDFPR also approved Cresco’s acquisition of PDI Medical, a medical cannabis dispensary located in Buffalo Grove, Illinois, which was purchased by the Company in November 2018. The MedMar dispensaries are Cresco Labs’ fourth and fifth dispensary acquisitions in Illinois bringing the Company’s footprint to five dispensaries in its home state.

“Illinois is at the forefront of our nation’s evolution of the cannabis industry, and with these three dispensary approvals, Cresco has reached the maximum level of dispensaries any single company can own and operate in our home state,” said CEO & Co-Founder Charlie Bachtell. “We have already achieved the highest market share of any operator in Illinois and our prospects for accelerated growth are promising with the recent implementation of the Alternatives to Opioids program that began on February 1st. Illinois has opened access for patients by eliminating the three-month waiting period as well as requirements for fingerprinting and background checks for all patients with any qualifying condition. With a doctor’s approval, a patient can now receive a medical-use cannabis card in just one day.”

In addition to its five dispensaries in Illinois, Cresco operates three cultivation and processing facilities across the state.

Origin House Acquisition

Cresco announced recently that it was going to acquire Origin House in a deal valued at C$1.1 billion or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looks to be the largest public company acquisition in the history of the U.S. cannabis industry.

The combined company will be one of the largest vertically-integrated multi-state cannabis operators in the U. S.; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.


Debra BorchardtDebra BorchardtApril 10, 2019
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4min3742

U.S. based investment fund Northern Swan Holdings has completed $58 million in Series D financing, bringing the total amount of capital raised to date to $96 million. The company will be using the funds to expand its existing Latin American operations including Clever Leaves, a leading vertically integrated licensed producer of medical cannabis in Colombia.

“The closing of our Series D round validates our investment thesis, providing the capital necessary to fund rapid expansion and to capitalize on our key competitive advantages as a first-mover in the global medical cannabis market. Federally compliant in all jurisdictions in which we operate, Northern Swan is well-positioned to expand and diversify our cultivation assets as well as accelerate our mission to revolutionize the trade flows in the global medical cannabis industry,” noted Kyle Detwiler, CEO of Northern Swan.

The company will use some of the funds to invest in new low-cost, large-scale cannabis cultivation and processing centers and to build out distribution channels and brands in Europe, Latin America and North America such as Cansativa GmbH, a German cannabis distribution and Lift & Co., a Canadian marketing and data company.

Northern Swan was the financial sponsor that helped secure the import permit with Health Canada for Clever Leaves, to become the first Colombian company authorized to export cannabis into Canada. and the company just completed an investment of approximately $8 million in Cansativa GmbH in order to further accelerate the growth in their integration into the wider European market.

It is still early days for the Colombian market, but Detweiler said that the population of Colombia is 49 million people compared to just 36 million in Canada, so the outright volumes could eventually be higher, though likely with a lower price point. He also noted that while other cannabis companies are developing in-country strategies for Colombia, North Swan seems to be the leader of the export-oriented strategy.

“I believe both will be successful strategies,” said Detweiler. “There may be more risk and regulatory work which goes into an export strategy, but the reward is naturally substantially higher (e.g. grow at low-cost, sell at a high price).  So, we’re pursuing the export path and obtaining the first ever import permit for shipping Colombian product to Canada illustrates we are advancing quickly.  Additionally, by investing in a German importation business (the only such link between a Colombian operation and German operation I’m aware of), we are also helping expand our global distribution to Europe as well.”

Detweiler said that Germany, the UK, Switzerland, Portugal, South Africa, Australia, Chile, and Mexico are all promising export destinations for the company..


Debra BorchardtDebra BorchardtApril 9, 2019
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6min15453

New York State’s Department of Health that oversees the medical marijuana program has yet to approve three outstanding proposed acquisitions. The three deals include the MedMen Enterprises Inc. (MMNFF) acquisition of Pharmacann, The Green Thumbs Industries (GTI) acquisition of Fiorello Pharmaceuticals and the Cresco Labs Inc.(CRLBF) deal with Valley Agriceuticals.

It had looked like New York was fast-tracking full legalization this year, but then at the last minute, cannabis funding was not included in the Governor’s budget. It looked like adult use marijuana was pushed off to another year. Then Governor Cuomo said that wasn’t the case and that in fact, negotiations were continuing. As all the back and forth continues, these companies have to wait patiently for the state to figure out its next moves.

The Department would only say in response to questions, “The New York State Department of Health is currently reviewing MedMen’s formal merger request with PharmaCann, which they submitted in January. The Department initially denied requests from Valley Agriceuticals/Cresco and Fiorello/GTI. Both have recently resubmitted their requests, which are currently under review.”

A GTI spokesperson said, “The transaction is still in regulatory review and we expect an answer in the near future.” MedMen and Cresco have preferred to stay mum on the situation. Although it seems the Pharmacann acquisition has been approved in all the other states, leaving just New York to green light the deal.

MedMen had announced its deal back on October 11, 2018, and said at that time that the resulting pro-forma company was anticipated to have a portfolio of cannabis licenses across the U.S. that would permit the combined company to operate 76 retail stores and 16 cultivation and production facilities.  MedMen is expected to add licenses in Illinois, New York, Pennsylvania, Maryland, Massachusetts, Ohio, Virginia, and Michigan as a result of the deal.

Cresco had stated in a filing that on October 24, 2018, it had entered into a definitive agreement to merge a subsidiary with and into Gloucester Street Capital, LLC, the parent entity of Valley Agriceuticals. Valley Ag is one of
the ten holders of a vertically integrated license from the New York State Department of Health. To date, the only material asset of Valley Ag is the vertically integrated license from the NYSDOH. Cresco said it had expected the closing to occur in the fourth quarter of 2018 or the first quarter of 2019.

Fiorello Pharmaceuticals, also known as FP Wellness, is licensed in New York state only. It is privately owned. The company lists its partners as The Clinic, Plant Consulting Group and LIU Pharmacy on its website. A report in the Daily Gazette said Fiorello Pharmaceuticals is building a medical marijuana production facility in Glenville and plans to open other dispensaries in Monroe, Nassau and New York counties. Green Thumb Industries or GTI (CSE: GTII) (OTC: (GTBIF) ) has plans to acquire FP Wellness, according to a company spokesperson.

The Buffalo News reported that there are two issues holding up the adult use legislation. The first is that Assembly Majority Leader Crystal Peoples-Stokes, who introduced the Marijuana Regulation and Taxation Act in 2013, “has insisted that half of the tax revenue should go toward reinvesting in communities that have borne the brunt of the war on drugs.” It seems the Governor is on board with this, but the tax revenue is estimated to be $300 million and he has also said he’d like to use some of that money for infrastructure projects like fixing the transit maintenance issues.

The paper said that the other issue was regarding the licenses and how to award them. The original five licensees have not made any profits and then the program was expanded to ten licenses. This group wants first dibs on recreational licenses in order to recoup their investments. The state, however, seems to be eyeing substantial license bidding fees that could potentially cause the only female-owned medical marijuana Etain to go out of business.

The state has been facing criticism that the program is heavily tilted towards corporate cannabis with no diversity except for Etain. This could be why the acquisition approvals have been stalled.

 


Debra BorchardtDebra BorchardtApril 9, 2019
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8min4000

Harvest Health & Recreation, Inc. (CSE: HARVOTCQX: HRVSF) is acquiring CannaPharmacy, Inc. in a deal with undisclosed value. CannaPharmacy owns or operates cannabis licenses in Pennsylvania, Delaware, New Jersey, and Maryland.

Harvest recently announced the private placement of $500 million in convertible debentures to continue to finance acquisitions and corporate growth. Harvest said that it expects that the transaction will be accretive to Harvest’s 2020 revenue and EBITDA.

“We’re seeing significant M&A activity across our industry, but the most important factors are the price one pays for an acquisition, strength of the assets relative to the market size and synergies between the companies,” said Steve White, CEO of Harvest. “Harvest was already fully funded to build out our entire footprint, inclusive of the significant assets that come with the Verano acquisition. Our recent $500 million financing, secured in $100 million tranches for new accretive acquisitions like CannaPharmacy, continues to solidify Harvest’s position as the leading company in the cannabis industry in reach, brands, infrastructure, assets, and footprint.”

Expanding Its Footprint

The CannaPharmacy acquisition will bring operations in four major northeastern states. The licenses and assets of CannaPharmacy will add to Harvest’s extensive national footprint across 17 states and Puerto Rico. Upon closing of this transaction and the closing of the previously announced acquisition of Verano Holdings,  Harvest will hold licenses that allow it to operate up to 213 facilities, including 130 retail dispensaries.

“All of our efforts back up our three core objectives; to expand and deepen our retail and wholesale footprint, build national brands and continue our path to profitable growth, and this CannaPharmacy deal is no different,” said Jason Vedadi, Executive Chairman of Harvest. “Harvest has led the cannabis market in the Western United States for years, and this acquisition will similarly widen and extend our U.S. foothold to the East Coast. When you add that to our existing dominant position in the Pennsylvania and Maryland markets, acquisition of CBx and its suite of brands, as well as our pending acquisitions of Falcon and Verano, with its holdings throughout the eastern seaboard and brands and infrastructure to leverage, we are looking at Harvest becoming a household name throughout the region in a matter of months.”

The company statement outlined the acquisition as follows:

New Jersey

  • One of six operational (and 12 awarded) fully vertical licenses, permitting cultivation, retail sales and manufacturing.
  • Woodbridge, NJ flagship store open and operational on a major highway since 2013, one of six in the state, 20 miles from NYC. According to the most recent NJ Dept. of Health annual report in April 2018, this dispensary has served more patients and completed more cannabis transactions since inception than any other dispensary.
  • A satellite store is approved and under construction in Union, NJ, 17 miles from NYC, on one of the most heavily trafficked highway corridors in the state at the intersection of the Garden State Parkway, NJ Turnpike, Route 22, and Route 78.
  • Approval pending for a third dispensary in densely populated Monmouth County, NJ (the “Jersey Shore”), which presently does not have a single dispensary.
  • 43.4% year-over-year revenue growth from 2017 to 2018.
  • New Jersey has 42,000 medical patients and growing 60 percent annually.

Pennsylvania

  • One 46,800 square foot cultivation and processing facility in the fifth most populous state in the country, with a statutory cap of 25 grower-processors;
  • Facility is a former Pepsi bottling plant employing local Pennsylvanians.
  • Harvest currently has seven state licenses allowing up to 21 retail stores throughout the state.
  • Pennsylvania currently has 116,000 medical patients as of February 2019 and growing at 10 percent month over month.

Maryland

  •  Rights to one dispensary in Prince George’s County.

Delaware

  • One of three fully vertical licenses, permitting cultivation, manufacturing, and three retail dispensaries.
  • Newark, DE flagship open and operational on a major highway leading into the heart of downtown, one of four stores statewide, in the county that hosts 60 percent of the state’s population.
  • Two additional dispensaries expected to open in 2019-2020.
  • Delaware currently has 7,104 medical patients, a 53 percent increase from 2017, and is experiencing rapid growth in a state with one of the most liberal lists of qualifying conditions in the country.

Harvest recently won every license it applied for in Pennsylvania, giving the company the ability to open up to 21, the largest retail network in the state. Harvest received the highest scores on all but one of its regional applications (where it placed 2nd overall) based on its responses to the criteria developed by the Pennsylvania Department of Health.


Debra BorchardtDebra BorchardtApril 3, 2019
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3min2440

Aurora Cannabis Inc.  (TSX: ACB) (NYSE: ACB)  filed a preliminary short form base shelf prospectus $750 million during the 25 month period that the shelf prospectus is effective.

“Although we have no immediate intention of drawing capital against this Shelf Prospectus, we have introduced this option as a prudent and long-term strategic measure to provide us with flexibility in access to growth capital, if or when required, to continue executing on our global expansion and partnering strategy,” said Michael Singer, Executive Chairman. “With our recent listing on the NYSE, our successful financing in January 2019 led by U.S. institutional investors, and as we work with Nelson Peltz to explore potential partnership opportunities, this filing is a natural evolution for our company as we rapidly mature into a global and profitable organization.”

The filing, when made final or effective, will allow Aurora to make offerings of common shares, debt securities, subscription receipts, units, warrants or any combination thereof of up to $750 million during the 25 month period that it is effective. Should the company decide to offer securities during this period,  the specific terms, including the use of proceeds from any offering, would be set forth in a related prospectus supplement.

Acquisition Binge

Aurora has been very active in acquiring companies which to date includes 16 wholly owned subsidiary companies – MedReleaf, CanvasRX, Peloton Pharmaceutical, Aurora Deutschland, H2 Biopharma, Urban Cultivator, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia Labs, HotHouse Consulting, MED Colombia, Agropro, Borela, ICC Labs and Whistler.

In addition to the acquisition, Aurora has established strategic partnerships with a range of companies, including: Radient Technologies Inc. (TSXV: RTI), Hempco Food and Fiber Inc. (TSXV: HEMP), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), Capcium Inc. (private), Evio Beauty Group (private), Wagner Dimas (private), CTT Pharmaceuticals (OTC: CTTH), Alcanna Inc. (TSX: CLIQ) and High Tide Inc. (CSE:HITI).

Stock Performance

Aurora Cannabis stock was lately trading at $8.96. Its year low was $4.05 and its 52-week high was $12.52. The stock was slipping by 1% in early trading.


Debra BorchardtDebra BorchardtApril 3, 2019
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5min3071

Hightimes Holding Corporation has hired Kraig Fox as President and Chief Executive Officer. Fox will oversee the company’s portfolio of global media, events and licensed properties. Adam Levin, who has served as High Time’s CEO since its acquisition by Hightimes Holding Corp in 2017, will now serve as the company’s Executive Chairman.

The announcement of Mr. Fox comes as High Times is raising capital through its Regulation A+ funding initiatives in cannabis history in preparation for the public listing of its shares, expected later in 2019. The High Times Regulation A+ offering and has already generated more than 20,000 investors but has been extended repeatedly. The offering originally began in early 2018 as part of the Origo Acquisition. Fox has extensive experience in the public markets arena and in mergers and acquisitions and the hire is expected to finally bring the offering to a close.

“Kraig’s operating and finance experience with public companies in the live entertainment, music and branding sectors makes him the ideal executive to take the High Times brand, our growing portfolio of assets and our business operations to the next level,” said High Times Executive Chairman Adam Levin. “As our operations expand globally, Kraig will provide both the personnel leadership and operational strategy to bring positive returns to those financially invested in the High Times brand. I couldn’t be more excited to have Kraig join us.”

“We plan on keeping our public offering open for a brief period as we conclude discussions with institutions and other major investors,” said Fox. “Both the investor and cannabis communities recognize that High Times is uniquely positioned to empower the industry with positive long-term financial returns.”

Kraig Fox

Fox brings a stellar bio to the world of High Times. He was once a Senior Managing Director of Guggenheim Partners where he focused on Guggenheim’s overall strategy in the media and entertainment spaces as well as the management of its media and entertainment investments. Prior to joining Guggenheim, Fox was a founder and Chief Operating Officer of Core Media (previously CKX, Inc.) where he oversaw all operations of this publicly traded company including Core’s interests in the estate of Elvis Presley and the intellectual property rights of Muhammad Ali as well oversight of its wholly owned subsidiary, 19 Entertainment, which included American Idol (including television, records, lives tours, artist management and sponsorships) and So You Think You Can Dance.

Prior to Core, Mr. Fox was a founder of SFX Entertainment (now Live Nation) where he was Chief Development Officer from 1995 until 2000 overseeing the global consolidation of the live entertainment industry into the worlds largest owner and operator of live entertainment promoters and producers.

High Times’ Acquisition Moves

High Times has been on an acquisition binge as the company seems to be pivoting towards events, which have historically been its largest source of revenue. High Times owns and operates The Cannabis Cup, the world’s largest cannabis-themed series of events. High Times has entered into definitive agreements to acquire The Big Show, a leading US-based cannabis conference and exposition and Spanabis, the largest cannabis conference in the world based in Barcelona, Spain.

The magazine business, in general, has dropped as readers across all genre’s mostly consumer media in a digital method versus print publications. The company has acquired three high-profile print and online media brands: CULTURE, DOPE Magazine, and Green Rush Daily. High Times has also created a music label, a Video-On-Demand platform and successfully completed several licensing deals, as well as the re-release of its debut music record with distribution from retail giant Urban Outfitters.

“Our portfolio of complementary businesses excels at connecting cannabis consumers with a variety of brands,” Fox said. “This is a lucrative time for the global cannabis industry, the High Times brand and for all of our company stakeholders

 


Debra BorchardtDebra BorchardtApril 2, 2019
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4min1900

iAnthus Capital Holdings, Inc. (CSE: IAN, OTCQX: ITHUF) reported its fiscal fourth quarter and full year unaudited results for 2018, however, the company did not release any financial statement to accompany the press release.

Fourth Quarter

The company delivered fourth-quarter revenue of $2.2 million (an increase of 165% over the same time period for 2017), pro forma revenue* for the fourth quarter was $14.8 million and the adjusted EBITDA loss for the fourth quarter was $6.0 million. The fourth quarter net loss was approximately $15.9 million, which includes $9.9 million of non-cash charges used to derive adjusted EBITDA primarily due to accretion expense, fair market value adjustments, depreciation, and share-based compensation.

Full Year

iAnthus reported full-year fiscal 2018 revenue and other income of $4.5 million (an increase of 88% over 2017) and a pro forma revenue* of $49.3 million for the full year fiscal 2018. The full year fiscal 2018 net loss of approximately $62.0 million included $44.1 million of non-cash charges used to derive adjusted EBITDA primarily due to accretion expense, fair market value adjustments, depreciation, and share-based compensation. Adjusted EBITDA loss was $17.9 million for the full year fiscal 2018.

Pro forma revenue (which includes acquired MPX entities and managed revenue for Colorado and New Mexico operations*) for the fourth quarter was $14.8 million and $49.3 million for the full year fiscal 2018.

Management Comments

“We made significant investments in expanding our footprint and scaling our operations while maintaining a prudent balance sheet in the process.  We opened eight dispensaries in the past seven months, including flagship stores in West Palm Beach, FL, and Brooklyn, NY, and plan to nearly double the pace of openings throughout the remainder of 2019.,” said CEO Hadley Ford. “We are now revenue generating in nine of eleven states and ramping quickly. Managing growth is challenging, particularly in an emerging industry.  Fortunately, we have also built an impressive operating team that combines cannabis expertise with crucial professional skillsets from outside the industry.”

Looking Ahead

iAnthus announced last week that its U.S. subsidiary has entered into a letter of intent to acquire CBD For Life, a top-ranked, national CBD brand in the U.S. This transaction is expected to close in the second quarter of 2019. CBD for Life products are currently distributed in over 750 retail outlets and channels across the U.S. The Company will continue to sell products through its own licensed facilities, as well as actively target other dispensaries within the market.

The company said it expects that sales will launch in California in the next 60 days, which will be the 10th state for revenue generation.

iAnthus also said it believes that the Massachusetts market will be one of the highest growth markets within the US, and it is iAnthus’ full intention to become a significant wholesaler within the state.


Debra BorchardtDebra BorchardtApril 1, 2019
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6min1380

GrowGeneration 

GrowGeneration Corp. (OTCQX: GRWG) reported revenue of $29.0 million or 102% over 2017 revenues of $14.4 million. The company delivered a net loss of $5 million for 2018 a big increase over 2017’s net loss of $2.5 million. Gross profits were $6.4 million for 2018, as compared to $3.3 million for 2017, an increase of approximately $3.1 million or 97%. The company’s same-store sales, in the 4th quarter increased by 12.4%.

Darren Lampert, Co-Founder, and CEO, said, “This was our 5th consecutive year of record growth for GrowGeneration, with revenues growing over 100% year over year. GrowGen is now EBITDA profitable, starting in Q1 2019. We are forecasting 2019 revenue of $52M58M and adjusted EBITDA of $.12$.16 per share for 2019.”

Since the quarter ended, GrowGeneration made the following moves:

  • Q1 2019, acquired certain assets and product trademarks from the 3rd largest hydroponic distributor.
  • Q1 2019, we acquired 3 additional stores, in Denver, COPalm Springs, CA and Reno, NV.
  • Opened stores in Brewer, ME and Tulsa, OK.

Nutritional High

Nutritional High International Inc.  (CSE: EAT) (OTCQB: SPLIF) reported revenue of $6.1 million for the second quarter of 2019 from the sale of Cannabis related products in California primarily via its wholly owned distributor, Calyx Brands Inc. The company also reported a gross profit of $1.5 million, but a net loss of $6.8 million. At the end of January 31, 2019, the company has now recognized a trailing-twelve-month revenue from Cannabis sales of approximately $17.6 million.

Jim Frazier, Nutritional High’s CEO said, “With Q2 2019, we continue to deliver on our results. We have maintained and increased our revenue base in California, while also successfully executing on margin enhancing initiatives. Our plan to expand in other major US jurisdictions are starting to take further shape. Green Therapeutics continues to make strides towards vertical integration in Nevada and we are also laser-focused on expanding our product and commercial footprint in Oregon and Washington.”

The company continues to expand its California product portfolio by signing a letter of intent in January 2019, to purchase a controlling 51% interest in Tres Ojos Naturals, LLC d/b/a SolDaze. In January 2019, the Company entered into a license and trademark agreement with Docklight, LLC of Seattle, Washington, providing Nutritional High the rights to produce, market and sell inhalable cannabis products (whole flower, pre-rolls and oil cartridges) in the state of Washington and Oregon, under the iconic brand Marley Natural, which is the official cannabis brand of Bob Marley. Additional brands secured as part of the Docklight License include Dutchy, Headlight, Irisa, Grail, and Martian Gardens, which together with Marley Natural, are the “Branded Products”. In Washington, Nutritional High will sublicense the rights to manufacture the Branded Products to a locally-licensed facility, while production of Marley Natural will begin in short order in Oregon.

1933 Industries

1933 Industries Inc.  (CSE: TGIF) (OTCQX: TGIFF) reported that for the second quarter FY2019, the company had consolidated revenues of $3,720,993, gross margin of $2,088,740 and a net loss of $2,926,981. 

Mr. Chris RebentischUSA COO and Founder of Infused, said, “Year to date, the Company has experienced a steady 54% growth in sales revenues over the same period last year. Sales in Q2 were lower than in the previous quarter due to the performance of our AMA subsidiary, which experienced slower than expected sales due to challenges with yield and access to supply. We are seeing dramatic increases in yield and quality since appointing an experienced master grower.”

On March 13, the company announced a non-brokered private placement of 10,000,000 units at $0.45 per Unit for total proceeds of $4.5 million and subsequently announced its close on March 15th as the Offering was fully subscribed by one place.


Debra BorchardtDebra BorchardtApril 1, 2019
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7min2620

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  is acquiring CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) in a deal valued at C$1.1 billion or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looks to be the largest public company acquisition in the history of the U.S. cannabis industry.

The combined company will be one of the largest vertically-integrated multi-state cannabis operators in the U. S.; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

“The acquisition of Origin House is another example of our focused and disciplined approach to creating a meaningful presence in key cannabis markets through excellence in brand development and distribution,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “It establishes Cresco Labs as the leading multi-state operator with one of the largest distribution platforms in California. Having a similar priority on consumers and consumer brands with the expertise of executives from the largest wine and liquor distribution company in the United States, the team at Origin House has established the premier cannabis distribution company in the largest cannabis market in the world. It’s an incredible platform for Cresco in California and the distribution infrastructure will provide a valuable framework to leverage as we scale our platforms in other states.”

Origin House

Origin House is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The company’s foundation is in California where it delivers over 130 branded cannabis products from 50+ brands to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke.

“From an Origin House perspective, this transaction is directly aligned with our strategy to build a leading portfolio of cannabis brands in California and to rapidly and accretively take those brands to the rest of the U.S. market, as well as the Canadian market,” said Marc Lustig, Chairman, and CEO of Origin House. “By partnering with one of the largest and most innovative U.S. multi-state operators in existence today, Origin House will supercharge its growth and be in a position to offer its brand partners access to 10 additional states, with licenses and supporting infrastructure already in place.  This Transaction is not the first opportunity we have reviewed, but it has received the unanimous support of our board and large shareholders because we are confident that together we will be in a position to truly change the face of the global cannabis industry while continuing to create significant value for the shareholders of both companies.”

Terms Of The Deal

Cresco Labs will acquire all of the issued and outstanding Origin House Shares, with each holder of Origin House common shares receiving 0.8428 Cresco Labs Shares for each Origin House Share (and each holder of an Origin House proportionate voting share receiving 84.28 Cresco Labs Shares for each proportionate voting share held), which implies a price per Origin House Share of C$12.68 (on an as-converted basis), representing a total consideration of approximately C$1.1 billion (on a fully-diluted).

Origin House shareholders will hold approximately 20% of the issued and outstanding Cresco Labs shares on a pro forma, fully-diluted and as converted basis, enabling Origin House shareholders the opportunity to participate in the expected value created through the deal. The company said there would be an immediate premium to Origin House shareholders of approximately 26% over the 30-day volume weighted average price.

Upon completion of the acquisition, as well as the receipt of licensure in Michigan and the closing of the company’s pending acquisition in Florida, Cresco Labs will have operations in 11 states, 23 facilities, more than 1.5 million square feet of cultivation, and licenses to operate up to 51 retail dispensaries. Cresco Labs brands will be sold in over 725 dispensaries across the United States.

“We are excited to welcome the Origin House team to the Cresco family,” said Cresco Labs President and Co-founder Joe Caltabiano. “With the addition of Origin House and its vast distribution network in California, we will have access to incredibly valuable real-time market data and insight into consumer buying patterns that will inform our product development strategies and reinforce our brand strength. In addition to their brand building and distribution expertise, Origin House has a very experienced M&A, corporate development and capital markets team that will be extremely valuable as we continue to expand and add scale through additional transactions. With respect to the capital markets impact, with the equity issued through this transaction, we expect to have substantially more shares in our float, which we believe will provide ample liquidity for larger institutional investors looking to deploy capital into the cannabis space. We expect that our larger scale and improved liquidity following this acquisition will positively impact our ability to attract a larger universe of potential investors and reduce our cost of capital in the future.”

 

 


Debra BorchardtDebra BorchardtMarch 29, 2019
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4min2940

iAnthus Capital Holdings, Inc. (CSE: IAN, OTCQX: ITHUF) is acquiring CBD For Life in an all-stock deal valued at $13.7 million.  iAnthus also expects to repay the outstanding debt and related accrued interest of CBD For Life which is approximately $2 million in cash. The deal is expected to close in the second quarter of this year.

CBD For Life was launched in February of 2016 by its co-founders Beth Stavola and Julie Winter, who are well-recognized as leaders and innovators in the cannabis and CBD industries. The brand’s CBD-infused pain management and beauty products have been featured in a wide range of online and print publications including Forbes, Shape, Marie Claire, Women’s Health, Cosmopolitan, and Allure.

“Developing a strong CBD strategy is mission critical for cannabis companies to compete on a national scale while simultaneously entering the consumer product and retail marketplace,” said Hadley Ford, Chief Executive Officer of iAnthus. “With the acquisition of a name brand like CBD For Life, iAnthus is well positioned to increase our market share with greater exposure to patients and customers across the country.”

CBD For Life has experienced an increase in interest from mainstream retailers in the first quarter of 2019 following the passage of the Farm Bill. Products are available directly to consumers online and CBD For Life is currently distributing to 750 retail locations and actively on-boarding approximately 25 new locations per week with a dedicated sales channel working with national retailers.

“We’re excited to bring CBD For Life into the iAnthus family—our CBD brand will provide iAnthus with even greater reach and a wider consumer base, particularly in states that have yet to implement full-scale cannabis programs,” said Beth Stavola, Co-Founder of CBD For Life and Chief Strategy Officer of iAnthus.

Beth Stavola is being featured as an honoree this year for the “2019 High Times Women of Weed” and was recognized as Inc.com’s “Top 100 Female Founders” in 2018.



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$CGC acquires $ACRG.U BUT not until cannabis is legal in the U.S.

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