Debra BorchardtJuly 26, 2021


Colombian President Ivan Duque Marquez has signed a new law that would allow a much larger amount of dry flower to be exported from the country, after a high-profile meeting of Colombian cannabis business leaders with US-listed public companies. The new law, a change to Colombian Decree 613, greatly increases the amount of dry cannabis flower (the flower, stems, and roots) that can be exported from the country, and also allows for cannabis to be put into industrial products like food and beverages and for much more extensive marketing of cannabis products in Colombia.

“The passage of this legislation greatly immediately accelerates our strategic vision of bringing our cannabis products to international markets as noted by our first international supply agreement out of Cosechemos while we focus expanding our global distribution platform of traditional consumer packaged goods. Now having the ability to export our high-margin, high-quality cannabis flower being produced at Cosechemos, together with a healthy portfolio of premium brands, and a robust pipeline of deals, we will continue to look towards international markets to drive growth and revenue generation,” said Jason Warnock, Chief Revenue Officer of Flora (NASDAQ: FLGC). “Another added benefit of the new regulations is that we can now process the entire plant whereas before Colombian processors had to destroy upwards of 60% of the biomass which we anticipate will further improve on our margins out of Cosechemos.”

Columbia Decree

Some of the new language is as follows:

  • To encourage the pharmaceutical industry, Colombia will allow the entry of dried flower, seeds, grain, plants, plant components, and derivatives to free zones, so that companies can carry out processing, packaging, and repackaging activities at lower prices, taking into account the tax benefits of these zones.
  • Licenses have been extended from five years to 10 years.
  • The advertising prohibition has been lifted.
  • The activities that can be developed in the food market are specified, under the strict standards of Invima and other competent entities. This economic sector is yielding great returns worldwide and the economy of our country needs that boost.
  • The prohibition on the export of dried cannabis flower is eliminated, so that in the subsequent regulation a scientific debate is made to identify under what requirements and for what purposes this activity should be carried out, always having as its north the medical and scientific purposes.
  • The dispensing of master preparations based on cannabis in drugstores is allowed, which will facilitate the access of these medicines to the patient since these establishments are the most numerous and closest way to reach the patient.

Flora Growth Ready For Expansion

 Flora Growth said these new regulations will allow for the opportunity to increase near-term revenue and optimize its global diversified supply chain of premium brands and products. The company said that through this legislative update, Colombian cultivators like Flora Growth, have immediately gained access to this massive segment of the market that was previously inaccessible. “The allowance of cannabinoid containing ingestible products creates a near-term opportunity to amplify revenue growth through its food and beverage division, Kasa Wholefoods. Kasa intends on leveraging existing relationships to distribute CBD versions of its portfolio, including the recently announced $10M distribution agreement with Tropi, Colombia’s largest food and beverage distributor with 130,000 points of distribution across the country.” Additionally, by removing marketing restrictions on cannabis products locally, Flora Growth will be able to drive increased awareness across its portfolio of products and driving additional sales through its 1,500+ points of distribution within Colombia. 

Khiron Applauds News

Alvaro Torres, CEO of Khiron Khiron Life Sciences Corp. (TSXV: KHRN)(OTCQX: KHRNF) said, “Colombia has been a regional leader in medical cannabis laws since 2015 and this new Decree strengthens the Government´s commitment to creating a robust and competitive industry. After naming the industry a National Strategic Priority and extending universal health coverage for THC and CBD medical cannabis products in late 2020, the new regulation expands the country’s growth potential across various product categories in Colombia and through the export of dried flower.” Since April 2020, Khiron has been dispensing medical cannabis to patients through its Zerenia pharmacy in Bogota, to more than 350 cities and municipalities across the country. With Decree 811 of 2021, the Government has significantly expanded the number of pharmacies eligible to carry and dispense medical cannabis products, from only a handful today to a network of more than 14,000 pharmacies nationwide.

Debra BorchardtJuly 26, 2021


 Verano Holdings Corp. (CSE: VRNO) (OTCQX:  VRNOF) is buying WSCC, Inc., also known as Sierra  Well, adding two operational dispensaries and an active cultivation and production facility in Nevada along with two real estate properties in Carson City and Reno. The acquisition is a cash and stock deal valued at $29 million with $5.6 million in cash up front and the rest in stock. It is expected to close once approvals are received for the two medical cannabis cultivation licenses; two adult-use cultivation licenses; two medical cannabis dispensary licenses; two adult-use dispensary licenses; one medical production license; one adult-use product manufacturing license; and one adult-use distribution license. 

“We’ve been operating successfully in Nevada since 2017 and have maintained focus on growing our presence in this highly attractive state. Following completion of this accretive transaction,  Nevada will become a core market for us. We are pleased to strategically expand our distribution in Nevada while partnering with a like-minded ownership group that has built a profitable business through sound operational management,” said George Archos, Verano Founder, and  CEO. “We look forward to expanding Verano’s retail presence into Northern Nevada and bringing  our house of premium brands to more patients and consumers in a region that’s rife with natural  beauty and draws significant tourism from around the country.” 

Sierra Well was going to be bought by iAnthus in 2019 for $27.6 million. At that time Sierra Well had unaudited annual revenue of approximately $16 million with an EBITDA (non-IFRS) margin above 20% and positive net income. One year later, iAnthus said it had terminated the agreement as it was beginning to unravel.

The move is expected to strengthen the company’s distribution capability in Northern Nevada with the addition of an approximately 10,000 sq. ft. Reno cultivation and production facility, which will complement the active expansion at the Verano-affiliated cultivation facility in North Las Vegas. The company said that both dispensaries are located along busy retail corridors and just minutes from their respective city centers. 

In addition, Verano said in a statement that it will broaden its Nevada supply chain while increasing the dispensary count between Verano and its affiliates to four active storefronts, with a fifth planned location to open in Las Vegas later this summer. 

Debra BorchardtJuly 23, 2021


After the market closed on Thursday, Red White & Bloom Brands Inc. (OTC: RWBYF) delivered its fourth quarter and full year 2020 financial results. Revenue for the fourth quarter of 2020 increased 158% to $15.7 million versus $6.1 million in the third quarter of 2020. RWB said the increase in revenue was primarily driven by the reporting of the first full quarter post-closing of the PV acquisition.

For the full year 2020, revenue increased to $23.3 million versus zero in 2019. The company also noted that adjusted sales for the year which excludes RWB Michigan, RWB Florida and RWB Illinois was approximately $37.8 million driven primarily by the Platinum Vape acquisition (the Company recognizes revenue from California and MAG in its entirety and only packaging revenue from Michigan).

RWB also reported that for the full year a net loss of $18.6 million vs $12.5 million in 2019. The company attributed the increase in net loss to the net effect of a number of non-cash items, including an increase of $15.3 million in depreciation and amortization, a one-time listing expense of $31.7 million, a $9.8 million provision in G&A for a possible contingent earn-out payable and an offset in part by a gain of $53.6 million on the revaluation of the company’s put/call agreement with PharmaCo.

Brad Rogers, CEO and Chairman said, “We set out at the beginning of 2020 with a three-year plan for our success; our strategy was to establish a foundation for the overall company and identify the core states to operate in and a plan to scale in those states. We have set the foundation for our core states including Michigan, Illinois, Florida and California. In 2021 we look to expand through an asset light approach in other states, such as Arizona, and complete the integration of our M&A targets while gaining operational synergies from all we have accomplished over the last 18 months. For the balance of 2021 and throughout 2022, the Company will focus on the continued growth of our topline revenue and bottom-line results through expansion of our house of brands that continue to gain momentum, fortification of our vertically integrated businesses, and the synergies from our M&A success.”

Looking Ahead

RWB said that once all of the acquisitions are closed, RWB, and RWB brands will be available in six of the top 10 states in the US, measured by cannabis revenue, with sales in 2020 exceeding $8.8 billion.

Debra BorchardtJuly 22, 2021


GrowGeneration Corp . (NASDAQ: GRWG ) continues to gobble up regional hydroponic stores as the chain keeps growing. This week alone, the company has announced the acquisition of a California operation and one in Oregon.


Today the company announced its acquisition of Mendocino Greenhouse and Garden Supply, a Northern California -based hydroponic garden center, located in Mendocino, California. It is said to be the largest cannabis-producing region in the country including MendocinoHumboldt, and Trinity counties. GrowGen said that sales are expected to surpass $8 million annually.

“As the country’s largest legal cannabis market, California continues to be a critical market for GrowGeneration,” said Darren Lampert, GrowGen’s CEO. “The Emerald Triangle continues to represent tremendous market potential. We are proud to expand our presence in the area through a highly respected and leading hydroponics store such as Mendocino Greenhouse and Garden Supply. ”

Founded by Nick Halfacre in 2005, Mendocino Greenhouse and Garden Supply has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services. Mendocino Greenhouse and Garden Supply’s team of eight employees will join GrowGen’s team of over 600 grow professionals as part of the transaction, while Mr. Halfacre will stay on as the garden center’s General Manager.

Said Halfacre, “Mendocino Greenhouse and Garden Supply was founded by growers for growers, and that ethos is at the center of everything we do. We look forward to continuing to provide best-in-class supplies and services under the GrowGeneration name.”


Just two days ago, GrowGen said it was buying Aqua Serene, a southern Oregon-based hydroponic garden center with stores in Eugene and Ashland, Oregon. Aqua Serene is one of Oregon’s largest indoor/outdoor garden centers, with revenue of over $14 million annually. The Aqua Serene team of 10 employees will join GrowGen’s team.

“As the country’s fourth-largest legal cannabis market, Oregon continues to be a critical market for GrowGeneration,” said Lampert. “The Oregon market, in particular, represents tremendous market potential, with over thirteen hundred recreational producer cultivation licenses in the state. GrowGen is proud to expand its presence in the area through the acquisition of highly respected and leading hydroponics stores such as Aqua Serene.”

Debra BorchardtJuly 21, 2021


Cannabis software company Akerna (NASDAQ: KERN) has released its 2021 Mid Year report that highlights upcoming trends as well as recapping the first half of the year. These trends include interstate commerce, the importance of brands, and the quickly growing power of the female consumer.

Interstate Commerce

Scott Sozio who serves as Head of Corporate Development for Akerna wrote that while consolidation and access to capital have been important issues they are laying the groundwork for interstate commerce and the importance of brands. Sozio said, “The recently proposed Cannabis Administration and Opportunity Act (“CAOA”) contemplates interstate commerce. Whether the bill passes or not, interstate commerce is now part of the conversation, and operators large and small will have to develop their plans for how they will compete when state borders open.” He suggested that the consolidation that is happening in the industry today has been focused on accumulating assets and planting as many flags in as many states as possible. He believes this focus will shift to a geographically strategic production location that is positioned to service a national footprint. 

“The first evidence that the larger operators are positioning for interstate commerce came earlier this year when Curaleaf acquired Los Suenos, the largest outdoor grow in Colorado. The announcement noted that the transaction would provide Curaleaf with one of the largest outdoor cannabis cultivation facilities in the U.S. while building on its strategy of constructing low-cost supply chains critical to eventual interstate commerce,” he wrote in the report.  Sozio thinks there will be more acquisitions of strategic supply as companies begin building their national footprints now. 

Big Brands

Akerna thinks that the brands being built today could become the cannabis household names of the future. However, the company said many questions have yet to be answered. “Will a successful California brand resonate in Florida? Will the product be consistent from one state to the next? As in any industry, there will be national brands and niche brands.” There are brands that are flexing their muscle now as they begin to compete on a national stage. Cannabis brand Cookies was recently named by Ad Age as one of the Hottest Brands of 2021. The company is both creating its own dispensaries and selling its product in multiple states. It’s a strategy that many other brands are sure to try to replicate.

Girl Power

James Arhrendt Business Intelligence Architect at Akerna also noted in the report the growth of the female consumer in the cannabis industry. “Since 2019, females have steadily increased their percentage of sales, a total of 3.2%. While that may seem like a low number, it’s actually a significant change considering the vast numbers of cannabis consumers – 14.9 million have purchased in 2021 so far.” Like the rest of the market, women are also buying mostly flower. Even though flower purchases account for 44% of the female spend, concentrate purchases are taking preference over edibles. 

Akerna found that the concentrate category showed a direct correlation between age and the percentage of sales share for females. The report noted that the younger age groups spend more (14% of sales for under 30), and the sales percentage gradually drops in each age group as you increase in age (60+ age group only spends 5%). “Edibles also correlate with age but in an inverse relationship to concentrates. For the under 30 female age group, edibles are only 5.37% of their sales, 30-40 its 6.93% of their sales, and this trend continues up as the 60+ age group spends 19% of their sales on edibles.”

So, it seems that as the importance of the female customer grows, brands and companies will want to adapt and address the desires of this group. Money talks and if this group is gaining importance, it will also gain power.

Debra BorchardtJuly 21, 2021


July 10 or Dab Day is turning into a dud day. It’s also called “oil” day and the idea is that 710 upside down spells oil. It’s supposed to be a day that celebrates vaping and consuming oil or concentrate cannabis products. No one is sure where or how the holiday got started or how it went from Oil Day to Dab Day. Still, dispensaries and brands have been game to throw a Dab Day party, but the consumers seem less than impressed.

Headset Sees Decrease

Headset provided Green Market Report with data from this year’s 710 sales and cannabis sales actually decreased. Concentrate sales did increase and were the only category to do so. All data for the US is from CA, CO, NV, OR, PA, and WA and all data for Canada is from AB, BC, and SK

Total Sales Growth

On Dab Day 2021 (7/10/21) total US cannabis sales decreased by -10.4% over an average of the previous four Saturdays. Canadian cannabis markets also saw a decrease in sales of -2.6% over the same time frame.

Category Sales Growth

In the U.S., concentrates sales increased by 24.1% and were the only category that enjoyed positive growth. “Vapor pens, which we’ve seen also get a little lift from ‘Dab Day’ in the past, decreased in sales by – 13.5%. Unlike the US, ‘Dab Day’ was not as successful in Canada; Concentrate sales decreased by -5.1%. Vapor Pens also didn’t see a lift during Dab Day within Canada, with a sales decrease of -2.0%.”

Concentrate Segment Growth

In the US on Dab Day 2021, Rosin products had the strongest growth, increasing in sales by 213% over the previous four Saturdays. Crystalline / THCA / CBDA (+75.3%) was the next most successful segment.

Dab Day Discounts

There was certainly a concerted effort to get consumers on board with celebrating. Dispensaries and brands were running promotions like crazy. According to Headset, “Dab Day was a fantastic day for American Concentrate fans to stock up on products this year. In the US the average discount on Concentrates grew by a whopping 52%, rising from 14.6% during the previous four weeks to 22.3% on 7/10/2021.

Eaze Data Confirms Dud Day

Cannabis delivery company Eaze data also confirmed that sales fell this July 10 versus last year’s July 10. Considering the country was mostly in lockdowns at this time last year, that’s a real rejection of the Dab Day party.

Chart provided by Eaze

Dud Day

There are many reasons why Dab Day just isn’t resonating with consumers.

First, it falls too soon after the Fourth of July. Cannabis sales for the fourth are typically pretty high and consumers likely have no need to make more purchases. Headset reported that this year on the 4th of July, total cannabis sales in California, Colorado, Nevada, Oregon, Pennsylvania, and Washington increased by +8% during 7/1- 7/4 compared to the previous four weeks. “Pennsylvania and California markets saw the largest increase with +12% growth, while Nevada’s market shrank -5.4% over the holiday weekend. All cannabis categories grew in sales compared to the previous four weeks, and Tinctures were the most successful cannabis products with +23.6% growth. Edibles (+16.4%) and Beverages (+14.5%) also saw significant growth. Within the Edibles category, the ‘Cookies’ segment performed particularly well with +19.4% sales growth.”

By referring to it as Dab Day versus oil day, the vape category tends to get cut out of the picture. That would explain why concentrate sales got a boost, but vape sales fell.

It feels like a made-up holiday and that lack of authenticity doesn’t sit well with cannabis consumers.

Cannabis marketing firm Wick & Mortar’s CEO Jared Mirsky said, “Honestly I think the entire idea behind 710, which is oil flipped upside down, is kinda ridiculous and only makes the industry look unprofessional. We have to be more clever than this moving forward if we are going to make larger strides towards destigmatizing cannabis for everyone else who has yet to become a brand’s loyal consumer. Don’t get me wrong, I am a heavy consumer and take dabs daily, but not for one second do I take 7/10 seriously as I believe many others don’t either and only comes off now as a sales tactic.”

In Closing

It’s unlikely that 710 will fade away. The industry is built on the back of partying and any excuse to consume is a good one. Still, the hoopla could end up dying down as dispensaries and brands learn that it isn’t paying off. Maybe Mirsky is right, the industry could get more creative, and if it wants to create a special holiday akin to 420, it should pick a date further from an established holiday.

Debra BorchardtJuly 20, 2021


Michigan-based Gage Growth Corp. (CSE: GAGE) has added another high-profile name to its dispensaries. A couple of weeks ago it was Wiz Khalifa and his brand, Khalifa Kush (“KK”) that Gage said it was going to develop and launch in the state of Michigan in an exclusive deal. Now Gage and Pure Beauty have entered into an exclusive five-year partnership agreement to launch Pure Beauty’s line of premium cannabis products in Michigan, pending Michigan. Pure Beauty is a California-based boutique cannabis brand that combines art, culture, and style with sustainable and social justice practices.

“We are thrilled to announce this partnership with one of the top brands in cannabis,” said Fabian Monaco, CEO of Gage. “Brand recognition is key to winning in the cannabis industry and with the addition of Pure Beauty to our brand portfolio, we look forward to creating and delivering the highest-quality cannabis products and experiences to our customers and patients.”

Pure Beauty was founded by the same masterminds behind Marley Natural. Pure Beauty prizes indoor-grown, high-quality flower and combines them with fresh, beautiful packaging. Most of the company’s packing is paper because the company is concerned about waste. “We spent a year and a half perfecting a child resistant mylar bag that is made from plant starch and are pretty proud of this.”

Like the Wiz Khalifa deal, Gage will be the exclusive producer, processor, wholesaler, and retailer of Pure Beauty branded products in Michigan. Gage and Pure Beauty will work to develop and commercialize a product lineup that includes flower, a full range of pre-rolls, extracts, beverages, and edibles that will be sold at Gage branded provisioning centers (dispensaries).

“Our mission is to bring unique, high-quality products to market while being mindful of the social and environmental implications intrinsic to the cannabis industry,” said Imelda Walavalkar, CEO of Pure Beauty.  “As a brand that cares deeply about art and culture, we felt very aligned with Michigan’s distinct and thriving culture, specifically with Gage, who we find to be among the best cultivators and operators in the nation. We are confident they will execute at the highest level as they share our commitment to social justice.  We could not be more excited about this partnership.”

Pure Beauty has lofty goals when cultivating its flower. “All of the water used in our cultivation is collected from the air, we pull no water from California tap. Why? Because a single cannabis plant needs approximately 150-250 gallons of water to reach flowering state. Our cultivation has no runoff; even “safe” fertilizers and nutrients will contaminate surrounding water supplies making life inhabitable for indigenous species. And we love animals. We also love bugs and use them, like rolly pollys, earthworms and nematodes along with friendly bacteria, fungi and protozoa to create a “soil food web” which helps naturally prevent disease and plant-eating predators by working with the plant to provide nutrients and protection. And when we are done we donate all used soil to public parks. Because why not? Parks are great and we should all support them. And yes, we talk to our flower. These thoughtful cultivation practices and the good energy surrounding our flower in their life cycle creates robust terpene profiles, with a strong nose that—when you smoke it—you will understand the world in a different way.”


Debra BorchardtJuly 19, 2021


The Green Market Report Cannabis Company Index has added six companies to the Index and published its second-quarter recap report. The Index experienced an overall 8% decline in the second quarter due to the drop in valuations of the companies. Year-to-date the Index is still up 27%. The second-quarter stock performance was almost the polar opposite from the first quarter. The first quarter saw the Index companies delivering mostly positive returns. In the second quarter, most of the Index companies turned in negative results with only a handful in the green zone. Consolidation continues in the industry and the gap between small and large companies seems to be widening.

New Company Additions

The Index will be adding the following companies for the third quarter: Ayr Wellness (OTC: AYRWF), Curaleaf (OTC: CURLF), Fire & Flower (OTC: FFLWF), Gage Cannabis, Turning Point Brands (NYSE: TPB), and Verano (OTC: VRNOF). In May, Ayr Wellness Inc. (OTCQX: AYRWF) reported its financial results for the quarter ending in March with revenue rising 74% to $58.4 million. The company said it was in the early innings of its 2021 strategic transformation having closed on acquisitions like Liberty Health Sciences and adding the fourth largest retail footprint in Florida. 

It’s hard to explain how Curaleaf wasn’t already in the Index, but it is now. In May, Curaleaf reported its first-quarter total revenue increased by 170% to $260 million versus $96 million in the first quarter of 2020. Growth in retail revenue was primarily due to strong organic growth across Curaleaf’s footprint, the opening of six new stores across Florida, Maine, and Pennsylvania, and the rapid acceleration of revenue growth in Arizona after the introduction of adult-use sales in January of 2021. In June, Fire & Flower Holdings Corp. (OTCQX: FFLWF) reported that in its first quarter ending in May the company saw its revenue rising 90.7% to $44.1 million. The company said it was the fourth consecutive quarter of positive Adjusted EBITDA of $2.3 million as compared to an Adjusted EBITDA loss of $1.4 million for the first quarter of 2020.

In Michigan, Gage Cannabis (CSE:GAGE) has managed to get itself on the radar of several research analysts this summer and all agree that the company is a buy. Eight Capital, Viridian Capital Advisors, and PI Financial have all issued reports with Buy ratings and target prices ranging from C$4.25 to C$7.50. Gage also reported that its revenue increased 1,972% for the full year of 2020 to $39.9 million versus $1.9 million in the fiscal year 2019.  Gage also noted that at this time it has eight cultivation facilities in operation today (three Gage operated and five contracted cultivation assets) and is expecting to expand to 13 cultivation facilities by year-end.

For a company that mostly sells papers, Turning Point Brands (NYSE: TPB) is turning into a behemoth in the cannabis industry. The company announced during its recent earnings results that it was increasing its guidance for 2021 net sales to a range of $422 million to $440 million. This is up from the previous guidance of $412 million to $432 million. In May, Verano Holdings Corp.  (OTCQX: VRNOF) reported that its revenue on a pro forma basis as if the AltMed acquisition were completed on January 1, 2021. With that in mind, the first quarter of 2021 revenues increased 117% from the first quarter of 2020 to $143 million. Verano has completed the acquisitions of Territory, Emerald, and Local Joint, all in Arizona, giving it the third-largest retail footprint in the state with six active storefronts plus two cultivation facilities.

Index Removals

The Index is removing the following companies for the third quarter: Aphria, Zynerba Pharmaceuticals, Aleafia Health, Auxly, Akerna Corp., and Slang Worldwide. The landscape for available cannabis companies to be placed in the index continues to grow. The choices for larger companies with better revenues have allowed for Green Market Report to be more discerning in its choices.

Aphria was removed because it was acquired by Tilray. Zynerba is true biotech and won’t have revenues until its products hit the market, which could be some time from now. Aleafia’s revenue declines have been disappointing. Auxly’s debt could become a problem even though the company has managed to extend maturities. The revenue just doesn’t seem to support this much debt and the company could run into trouble. Akerna has struggled to show improving revenue and while the company is valiantly making acquisitions to get there, the Index has found better candidates. The same could be said for Slang, which continues to strengthen the company. The management is making great moves, but the Index is looking to larger names with bigger revenue streams. 

In Closing

While the second quarter was rough for cannabis stocks. The third quarter looks to be turning around and hopefully, valuations will continue to recover. The catalysts for the industry are overwhelmingly positive. New Jersey sales could begin in 2021 giving the state a jump on capturing the New England market. Then New York and New Mexico are both set for April 2022. Sales for these states are expected to be in the millions.

As retailers are slowly able to recover from COVID lockdowns and restrictions, more sales records are bound to be broken. Canadian retailers that suffered from store closures in the first quarter and are happy to be opening their doors once again. In the U.S., tourism is on the rise and people who have been stuck at home are ready to get out of town and party.


Debra BorchardtJuly 15, 2021


After the markets closed on Wednesday, The Valens Company Inc. (TSX: VLNS) (OTCQX: VLNCF) delivered its second-quarter financial results ending May 31, 2021. Valens reported that its revenue increased 16.1% to $20.5 million versus $17.6 million in the second quarter of 2020. The net loss was $8.6 million in the quarter versus $3.5 million for the same time period in 2020.

Tyler Robson, Chief Executive Officer, Co-Founder and Chair of The Valens Company, said: “We believe that our business model remained resilient despite ongoing challenges presented by the pandemic, and our strategy continued to demonstrate its effectiveness as we gained significant market penetration across the country. We are proud to share that in the second quarter alone, Valens had 132 SKUs listed in Canada – a 76% increase in comparison to 75 SKUs listed in the first quarter of 2021. This material growth in SKU listings stands in stark contrast to many of our competitors in the sector and is a testament to the innovation and quality we are bringing consumers and retailers.”

The adjusted EBITDA was $(5.0) million in the quarter versus $2.7 million, or 15.3% of revenue in 2020 for the second quarter. President Jeff Fallows said: “Predictably, our accelerated launch of a targeted portfolio of high-volume SKUs resulted in an increase in costs which impacted our adjusted EBITDA in the quarter. However, we expect these costs to produce accelerated revenue and margin growth in the coming quarters particularly as we achieve greater utilization of our largely completed manufacturing platform.”

Green Roads

In June, Valens entered the US market with the acquisition of Green Roads for $40 million. With the Green Roads acquisition, Valens more than triples its total addressable market and secures a global leadership position in the cannabis health and wellness vertical with one of the largest CBD brands by market share. Additionally, the acquisition strengthens Valens’ capabilities to supply global markets with an expanded product offering and increased speed to market with a US-based manufacturing and cGMP certified co-manufacturing platform. Valens said it plans to invest approximately $10 million into Green Roads to strengthen its resources across various business lines, including sales and marketing. Valens said that in the back half of the year, it will introduce Green Roads’ CBD products to the Canadian market.

Looking Ahead

Fallows added, “We continue to dedicate efforts and remain keenly focused on completing our listing on the Nasdaq which we expect to be completed in the third quarter of the 2021 calendar year, and which has been fortified by our US entry. These initiatives will be instrumental in advancing global market opportunities and will lead to Valens accomplishing its strategic and operational growth objectives which we believe will be transformational for the company, generate additional sources of sustainable revenue, and drive shareholder value. We continue to maintain a strong balance sheet as we successfully raised additional capital from our bought deal financing which closed after the quarter. This equity raise provides Valens with the capital to pursue its strategic initiatives, specifically by taking an opportunistic approach to additional accretive acquisitions and to further secure our entrance into additional Cannabis 2.0 and 3.0 product verticals.”

The company noted that its recent $46 million bought deal financing was closed subsequent to quarter-end on June 1, 2021. The company said it plans to use the bulk of the net proceeds, $28 million, to pursue opportunistic acquisitions and business expansion opportunities across North America and international markets. The remaining proceeds will be used for capital expenditures, working capital, and other global general operating expenses.

Robson concluded by saying, “Importantly, we are seeing this momentum continue into the third quarter with an additional 40 SKUs accepted by the provincial boards with shipments during the third and fourth quarters. These new listings include products from four newly entered categories during the second quarter, such as flower, pre-rolls, topicals, and edibles, with many of them already receiving high consumer acclaim. Additionally, we have enhanced our platform with increased technical capabilities and greater efficiency to develop and commercialize winning products, which we expect will drive revenue growth in the second half of fiscal 2021. We look forward to continuing to drive new product innovation in the sector, specifically in the flower, pre-roll, beverage, concentrates, and edibles categories. With our recent distribution wins into New BrunswickManitoba, and Yukon, we are positioned well to capitalize on these investments.”

Debra BorchardtJuly 14, 2021


While Florida-based cannabis company Trulieve (OTC: TCNNF) is not involved in the trial of businessman John “J.T.” Burnette, the company can’t help but get mentioned in the trial. Burnette is the husband of Trulieve CEO Kim Rivers and she has been attending the hearings as noted with court drawings. The Tallahassee Democrat has been covering the case and reported that on Monday, “Federal prosecutors laid out their case against businessman John “J.T.” Burnette during the first day of his public corruption trial, telling jurors that he and former Tallahassee City Commissioner Scott Maddox conspired together out of greed.”

According to the case, Burnette and Tallahassee City Commissioner Scott Maddox flew to Vegas in December 2016, where they met up with undercover agents posing as Mike Miller, owner of Southern Pines Development, an FBI front company; Mike Sweets, a medical marijuana entrepreneur, and Brian Butler, a “green energy” businessman.  Burnette is being charged with racketeering, extortion, fraud and making false statements. He is also accused of arranging $40,000 in payments to a consulting firm owned by Maddox friend Paige Carter-Smith but alleged to be secretly controlled by Maddox from an out-of-town vendor called Southern Pines Development. The company, which was eyeing potential development projects in town and wanted Maddox’s official help, turned out to be an FBI front. Burnette had wanted advice from Sweets for Rivers.

The Tallahassee Democrat reported that Maddox and Carter-Smith, former head of the Downtown Improvement Authority, pleaded guilty to bribery charges in 2019 and that both will testify against Burnette.

Trulieve Connection

To be clear, Trulieve is not connected to the case. Burnette though was involved in the construction of many Trulieve facilities. In 2018 his construction company received payments of
$8.7million and in the first three quarters of 2019 the construction company was paid almost $28 million. Trulieve has said in a statement, “JT Burnette is a minority owner in the construction business. Trulieve has retained the services of Burnette Construction company, as well as other construction companies over time. These service providers are chosen
because they are knowledgeable, experienced, and provide high-quality services at favorable terms. These business relationships are completely separate from the indictment case against J.T. Burnette. All transactions have been approved by independent board members and the value is provided in our public disclosure documents. They are arms-length and below market in cost to Trulieve.”

Burnette’s lead attorney, Tim Jansen told jurors this week, “He’s trying to help his wife out with Trulieve. So he contacted Mike Sweets for marijuana advice.” The Tallahassee Democrat reported, “The advice turned out to be helpful, Jansen said, adding that jurors will hear more about that.” Some shareholders have faulted Trulieve for not disclosing more information about the case, while others believe the company has adequately addressed it. The trial is expected to last several weeks.

Grizzly Report

In December 2019, stock short-seller Grizzly Reports issued a scathing report on Trulieve and highlighted the accusations that prompted the current trial. In January 2020, Trulieve filed a lawsuit in Florida state court against GRIZZLY RESEARCH LLC alleging, among other claims, defamation for publicly disseminating false and libelous statements about Trulieve to manipulate the stock price and further its own financial interests. The case has supposedly stalled due to the pandemic.


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