Debra Borchardt, Author at Green Market Report - Page 2 of 49

Debra BorchardtDebra BorchardtFebruary 5, 2019
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4min3230

Green Thumb Industries Inc. (OTCQX: GTBIF) is acquiring For Success Holding Company, the owner of Los Angeles-based Beboe branded cannabis products for an undisclosed amount that will be paid in GTI stock.

Beboe is known as a premium brand for its high-end packaging including its iconic rose gold vaporizer pens. The products are available in more than 125 California and Colorado retail locations and via home delivery across California.

“We believe authentic brands distributed at scale is the key to winning in this industry and we’ve built the national infrastructure to produce and distribute high-quality products across the country,” said GTI Founder and Chief Executive Officer Ben Kovler. “The meticulously crafted suite of Beboe products supports the premium segment within GTI’s brand portfolio and is firmly aligned with our long-term growth strategy. Beboe has an extremely talented team, a robust innovation pipeline, and an aligned vision for what cannabis can mean for enhancing everyday life, not only for today but importantly for tomorrow’s cannabis consumer.”

Beboe was co-founded by celebrity tattoo artist Scott Campbell and is a tribute to Campbell’s beloved grandmother Beboe who alleviated the cancer symptoms of Campbell’s mother by baking marijuana-infused brownies. The other co-founder is Clement Kwan who has a long history in executive roles across the fashion industry. He has been integral to the growth and success of luxury brands such as Theory, Diesel and Dolce & Gabbana. In 2012, Clement took on the role of President, heading the U.S. business of YOOX Group.

“In appreciation of all my grandmother did to bring warmth and love into our house, we started Beboe to offer the same sense of care and possibility for people like myself, high-functioning adults, who don’t have the patience for anything less than the best possible experience,” said Campbell. “Having seen the entire landscape of this industry, I truly believe in GTI. We’ve sat down in countless conference rooms of cannabis operations and funds, and it’s disheartening how many people in the space are operating with a slash and burn mentality. Rapid growth at all costs with little regard to the sustainability of growth or respect of existing cannabis culture. GTI has the resources and intent to lead the growth of the cannabis industry in a way that celebrates the plant and the irreversible culture shift that it has inspired.”

Beboe recently launched a direct-to-consumer hemp-derived CBD line of products and has launched several collaborations, including a CBD-infused drink with wellness brand Dirty Lemon. Beboe products will expand beyond California and Colorado with distribution in select GTI markets.

Kwan added, “We aligned with GTI because we agree with their strategies and philosophies.  We believe cannabis enhances the quality of life, and to be able to improve the lives of more people with Beboe’s introduction into additional stores and new markets is extremely gratifying. With the support of GTI, we will waste no time in growing Beboe brands’ availability and to help define cannabis’ place in American culture.”


Debra BorchardtDebra BorchardtFebruary 4, 2019
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9min8841

MedMen Enterprises Inc. (MMNFF) is facing a new lawsuit from the company’s former Chief Financial Officer James Parker. Parker filed his case on January 29 in the Superior Court of California in the County of Los Angeles claiming wrongful termination for an undetermined amount of damages.

MedMen spokesman Daniel Yi said that the company was unable to respond to the filing because it had not been officially served, but would do so once that happened. “These are baseless claims and we’ll defend ourselves vigorously in court,” said Yi.

Parker resigned from the company in November less than a year after the company began trading on the Canadian Securities Exchange following a reverse take over. It’s highly unusual for a company to experience a change at this level so quickly after becoming a publicly traded company. At the time, Jim Miller, who was the Vice President of accounting was appointed as the interim CFO and then in December MedMen named Michael Kramer as its official CFO. Kramer worked previously in senior jobs for retailers such as Apple Inc., Abercrombie & Fitch and Forever 21.

The Allegations

The allegations are harsh. Parker says that he to “Choose between complying with his fiduciary duty to the company and its shareholders or turning a blind eye and a deaf ear to improper and unlawful behavior, he had been constructively and wrongfully terminated without cause and in violation of public policy.” Parker claims MedMen went behind his back to begin searching for a new CFO and diminished his authority within the company.

He also complained that the company instructed him to make payments that he questioned.

“Plaintiff was ordered to spend several millions of company dollars on such items as 24-hour armed Executive Protection (security) for the CEO, President, and their families, high-tech safe rooms and security systems for their new houses, personal drivers, private jets (often with friends and family along for the ride), luxury hotels, special order pearl white Escalades for the CEO (and another car for his family), a custom $160,000 Tesla SUV demanded by the President, tens of thousands of dollars apiece on multiple extravagant custom conference room tables, and placing CEO Bierman’s personal therapist and marriage counselor on staff fulltime as a “performance improvement expert” at a pay rate in excess of $300,000 a year.”

Parker alleges that Bierman and President Andrew Modlin engaged in inappropriate name-calling.

“Mr. Parker was forced to tolerate being ridiculed by CEO Bierman and President Modlin for the way Plaintiff dressed (not hip enough to satisfy the Founders’ millennial culture); being called “fat and sloppy”; being called a “pussy-bitch;” having his office diminished in size; assigned to a shared a parking space with his executive assistant while less senior VP’s and Administrative Assistants had their own exclusive spots; subjected to hearing CEO Bierman’s racially inappropriate reference to Los Angeles City Councilman Herb Wesson as a “midget negro” and the CEO’s characterizations of cannabis social equity programs as “reparations”; CEO Bierman’s references to a representative of the Drug Policy Alliance as a “fat, black lesbian;” CEO Bierman’s and President Modlin referring to women in conflict with them as “cunts” and those with different ideas or perspectives as being “retarded;”

Parker also made serious securities violation claims saying:

  • “Ordering Plaintiff to wire hundreds of thousands of public dollars to a “consultant” in Canada to “buy up our stock when it is under attack”
  • “Ordering Plaintiff to pay prohibited success fees to unlicensed broker-dealers for various fundraising efforts, under the semblance of “consulting agreements”
  • “The CEO and President not being fully transparent about non-arm’s length deals with numerous related parties (including Pharmacann and Captor Capital)”
  • “The CEO and President failing to publicly disclose all Named Executive Officers and other Material Officer compensation packages (in violation of Canadian National Instrument Form 51-102 F6 which requires that the compensation of the CEO, CFO and next three highest-paid executives be publicly disclosed)”

Parker also claims that Bierman and Modlin have continued to treat the company as if it were still a private company and not one owned publicly by shareholders.

“Plaintiff having to deal with all of the resulting cultural fallout at the company; relegated to using his personal American Express card to fund company purchases ranging from $150,000-$250,000 a week because CEO Bierman and President Modlin, and Defendant could not obtain credit cards with high enough limits since MM Enterprises was in the cannabis industry”

MedMen Claims Performance Issues

Within the case, Parker included emails from Andrew Modlin suggesting the company was unhappy with Parker’s performance leading to his ouster.

Modlin wrote, “You have engaged in other serious neglect in the performance of your duties and you have willfully and repeatedly failed and refused to perform your duties. We will be providing you with a more detailed description of your performance deficiencies shortly as well as a plan for curing those deficiencies.”

In another email stated in the case, Modlin wrote, “We are taking the time to thoughtfully memorialize the myriad well-documented deficiencies in your performance so that both you and MedMen can understand what is expected of you in your very well compensated position. Given the amount of your base salary, the annual bonus available to you, and the value of the equity grants given to you, MedMen has every right to expect you to perform your job duties
admirably. ”

Damages

Parker was being paid $750,000 a year and if he was terminated without cause he would receive $2.2 million. In addition to other lump sum payments and unvested stock options. However, the filing states that damages would be determined in court.

Other Lawsuits

MedMen is facing another lawsuit. Brent Cox and Omar Mangalji founders of The Inception Companies founders (through an affiliated entity – MMMG-MC, Inc. – that holds a significant stake in MedMen’s management company MMMG, LLC) filed a complaint against Adam Bierman; Andrew Modlin and various MedMen Enterprises (OTC: MMNFF) entities for alleged breaches of fiduciary duty. A Los Angeles Superior Court though denied a request from the plaintiffs for a temporary restraining order and a preliminary injunction and giving the company a slight early victory.

However, similar to Parkers claims that Bierman and Modlin are self-dealing when it comes to the company, Cox and Mangali also stated, “MedMen veneer is a complex web of interconnected subsidiary entities, virtually all of which are directly managed, directed, controlled, and owned by BIERMAN and MODLIN, and all of which always pursue the best interests of BIERMAN and MODLIN, rather than the best interests of any stakeholder or entity. It is that perverse interconnectedness and rampant, brazen self -dealing that renders the actions of BIERMAN and MODLIN, and of the Entity Defendants, unlawful.”

 


Debra BorchardtDebra BorchardtFebruary 4, 2019
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6min4352

Namaste Technologies Inc.  (NXTTF)  has fired CEO Sean Dollinger and could be reviewing selling the company. The Canadian-based cannabis company said that following an investigation by a Special Committee of the Board of Directors, the Board terminated Dollinger for cause and removed him from his position as Director, effective immediately. The company has appointed Meni Morim as its interim CEO and also appointed Darren Gill as Chief Strategy Officer.

Special Committee Investigation

Namaste came under a short seller attack by Citron Research in October 2018 which caused the board to form a Special Committee to investigate the allegations. The only one that was substantiated and required action according to the company was related to the sale of Namaste’s US subsidiary, Dollinger Enterprises US Inc., in 2017, and subsequent transactions involving its assets and companies in which Sean Dollinger and Namaste’s head of marketing David Hughes have a beneficial interest, as well as breaches of fiduciary duty by Sean Dollinger and evidence of self-dealing. The company said it is also  taking legal action against Dollinger for damages and disgorgement.
Citron Accusations
Citron accused Namaste in saying it was planning on listing on NASDAQ in order to bring in investors. “Fake claim of a Nasdaq Listing to get investors to buy the stock. Mr. Dollinger has promised investors a Nasdaq listing and the simple takeaway that comes with it, a higher share price on the back of an up-listing.”

Next, it claimed there was an issue with the sale of Dollinger Enterprises US, which it seems turned out to be true. “With the hope of obtaining the NASDAQ listing on Nov 28, 2017, Namaste announced that it divested of its US assets, Dollinger Enterprises US Inc. Just to be clear, Dollinger said he sold this asset to an arm’s length party… but it was really sold to David Hughes who has been with Namaste since Feb 2015 (and Paul Burn who has been with Namaste since 2016) – can investors trust anything Dollinger says going forward? Namaste has lied to its shareholders, Canadian Regulators, US Regulators; and most of all has attempted to hide US assets from the Justice Department in an attempt to obtain a US listing.”

The report went on to say, “And just in case you say…NOOOO this can’t be our CEO who would do this…just
remember this is the same guy who just three years ago raised money based on the underlying promise of guaranteed returns…the SEC would have nailed him for this but he was living in the Bahamas.”

Strategic Review Process Initiated

The company also stated that the board had initiated a formal strategic review process to consider all value-maximizing alternatives, which could include exploring a potential corporate transaction that may, but not necessarily, result in the sale of the company.  “We are in the process of engaging an investment bank to advise a Special Committee of the Board overseeing the process,” read the statement.

The company went on to state, “Namaste remains in a strong financial position, with cash balances intact, and will continue to execute on its unique and effective business strategy.”

Citron has suggested that the company’s real valuation should be $0.26 a share and the company is currently trading at $1.04.
Sexy Nurses
Things started to go downhill for Namaste in September of 2018 when the company held a “pledge party” stockholders who promised not to sell company shares for 90 days. The party featured women dressed as sexy nurses to sign up patients for its telemedicine portal. The party though was in Quebec which bans telemedicine. Tilray (TLRY) had just signed an agreement with the company but immediately terminated it upon hearing about the party and the promotional activities.


Debra BorchardtDebra BorchardtFebruary 4, 2019
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5min2590

Treehouse Global Ventures has added two accomplished women in the cannabis industry to its Senior Advisory Board.  Emily Paxhia of Poseidon Asset Management and Tahira Rehmatullah of MTech join TGV founders Lindy Snider, Gaynell Rogers and  Lori Ferrara who were named  “Women to Watch in 2019” by the leading industry publication trade MJ Business Daily.

Treehouse Global Ventures investment fund is the capital partner of choice for companies led by women and minorities. There is no other funding vehicle focused primarily on women, minorities, and innovative business models across multiple industries.

Emily Paxhia is Co-Founder and Managing Partner of Poseidon Asset Management. Barclay Hedge awarded Poseidon as the #1 Sector-Based Performing Fund (2016-2018). Paxhia has also been named as one of the most powerful women in the cannabis industry by Fortune Magazine,  she has reviewed thousands of companies in the cannabis industry and worked with a number of founders in a multitude of capacities including consult for founders’ pitch preparations, go-to-market strategies, product launches, and day-to-day business operations. Emily has dedicated time and energy to supporting policy groups, serving previously on the Board of Directors for the Marijuana Policy Project, presently for Athletes for CARE. Additionally, she serves on the Board of Directors for The Initiative accelerator program.

Tahira Rehmatullah is the CFO of MTech Acquisition Corp. and Managing Director of Hypur Ventures, where she is responsible for investment sourcing and portfolio company management. Also named by Fortune as one of the most powerful women in the industry, Tahira is dedicated to developing female and minority leadership in cannabis and serves as an advisor to  numerous businesses and entrepreneurs in the space.

Most recently, Rehmatullah was instrumental in bringing together MTech and cannabis seed-to-sale tracking company MJ Freeway, which has filed to be listed on the NASDAQ exchange in the U.S. If MJ Freeway is approved to list on the exchange, it will be the first cannabis company to list on a major U.S. exchange that is le by a female CEO – Jessica Billingsley.

“We are delighted to add Emily and Tahira to our senior advisory board and look forward to many collaborations around the country and the globe with these two gifted women leaders,” said, Founder Lindy Snider.

 

 

 

 


Debra BorchardtDebra BorchardtFebruary 4, 2019
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4min3051

LB Equity has raised $50 million for a portfolio titled LB Equity Emerging Growth Fund, which will be concentrating its investments in cannabis companies that are involved in beauty, health, and wellness. The company’s first investment is with the platform Standard Dose, which is dedicated to selling hemp-based CBD products as well as educating consumers on these new products. The company did not announce how much of an investment it made into Standard Dose.

The retail platform will provide content to educate consumers on the emerging CBD market, plus current industry research and information about CBD products. This information will include dosage and regulatory updates.

The market has been exploding with CBD products since the 2018 Farm Bill was passed legalizing hemp and products made from hemp-derived CBD. The problem is that not all hemp CBD is created equally and there is quite a bit of inferior product on the market. Standard Dose is starting with 37 distinct beauty and lifestyle products that it has vetted and tested.

The company’s ingestible products include vape pens, tinctures, olive oil, honey, and beverages. Consumers should be aware though that the FDA must approve of any foods containing hemp-derived CBD. In a statement issued in December, the FDA said, “Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act.” The FDA went on to add, “The FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce.”

“Our goal at Standard Dose is to facilitate an honest conversation about CBD and to help consumers gain clarity of an industry that, until now, has been confusing and unregulated,” said Anthony Saniger, Founder and CEO of Standard Dose. “We take the time to vet all of our products and share information so that consumers can choose CBD products with confidence. With the very recent legalization of CBD, we know that interest in the industry and its products will skyrocket.”

LB Equity is led by Jay Lucas, a former partner at Bain & Company, Karen Ballou, a highly experienced beauty industry professional (Redken and Elizabeth Arden) and Jim Morrison, who served as President of L’Oreal U.S. for nearly 10 years. The extended team consists of strategy and investment professionals along with an advisory group of veteran industry executives across core value creation disciplines.  Prior to Standard Dose and the latest Fund, LBE has completed investments in ten additional beauty and personal care brands, including MD Complete, Marula Pure Oil, Immunocologie and Blamtastic among others.

“LBE is targeting the massive opportunity available at the intersection of the rapidly growing cannabis industry and the many emerging brands within the skincare, beauty and related personal care sectors,” said Jay Lucas, Managing Partner of LB Equity. “With experienced executives from both the finance and beauty industries, LBE is perfectly positioned to leverage the transformational impact that these newly legalized cannabis-based products will have on the beauty industry.”


Debra BorchardtDebra BorchardtJanuary 31, 2019
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9min4490

The Super Bowl would probably prefer to not have anything to do with cannabis, but the cannabis industry and football are destined to work together. Whether it’s the rejected Super Bowl ad from Acreage Holdings Inc. (ACRG.U) or dispensaries running super bowl promotions the two keep crossing paths. Plus, there is the issue of cannabis being used to treat former players who suffer from head injuries.

The NFL even found itself mentioned in the Pennsylvania Auditor General report saying, “ In 2018, the NFL rejected an unprecedented therapeutic-use exemption request from running back Mike James, a free agent who sought medical marijuana treatment to break a dependence on opioids. If players’ access to medical marijuana is going to be compromised, legalizing marijuana altogether would make it unnecessary to threaten Philadelphia Eagles and Pittsburgh Steelers players with suspension, fines, and banishment from the league over its use.”

The report went on to note that its cherished Philadelphia Eagles could be hurt by if players sought to live in states where cannabis is legal in order to treat themselves.  “As marijuana is legalized in other states, it could incentivize athletes — who literally injure themselves for our entertainment — to seek to be traded to states where they can legally access pain management and do not have to wait for exemptions to stay off opioids.

Brady Cobb is a medical cannabis pioneer and the CEO of SOL Global– which is currently in the middle of a five-year study at the University of Miami on how CBD can help treat concussions. He said, “The NFL is holding onto this long-held association between cannabis and Reefer Madness. It’s been only recently, with newly enacted legislation, that the public and companies are recognizing the difference between the non-psychoactive medical properties of CBD and the mind-altering effects of THC. With the farm bill’s passage, I think it’s only a matter of time that the NFL catches up to the NHL and other sports leagues that realize the real potential of the healing benefits of CBD.

He noted that the players and the players’ association all support looking into and researching the effects of using cannabis and CBD in treatment. When asked about CBS rejecting the proposed ad which only showed patients discussing how medical marijuana helped them he said, “CBS’s position is clearly completely at odds with the public’s position. A recent Gallup poll shows that the public supports cannabis upwards of 66% to 67%. So six out of ten people watching the super bowl – if not more, considering the demographic – could ultimately be a consumer of the products.”

The issue of cannabis advertising during football only looks to be getting more attention versus dwindling away. “With the increasing efforts to legalize cannabis products for both medical and recreational use, advertising standards and practices are coming rapidly into focus,” said Deb Gabor, CEO of Sol Marketing. “While CBS snubbed an ad for medical marijuana during the Superbowl — they did consider it. The mere fact that the network considered an ad for cannabis shows that we’ve turned a corner, and we’re going to see advertising and branding for these products come rapidly into the mainstream.” Gabor is the author of the new book, releasing nationwide March 2019 titled, Irrational Loyalty: Building a Brand That Thrives in Turbulent Times.

Gabor noted that the cannabis industry has been working hard to overcome stereotypes and change perceptions of the culture of marijuana usage. “Advertising to large audiences like those watching the Super Bowl — and getting in on the PR value of Super Bowl advertising — is one tactic in kickstarting a perceptual change,” she said.

Even though CBS has refused the ad, the stadium doesn’t seem to have as big of a problem. A CBD-infused coffee and will be allowed during the game at the stadium in Atlanta. “While this is not technically a Super Bowl commercial, this is a sponsorship activation, which is designed to engage audiences in a more experiential fashion. While it’s unclear to me what CBS’ advertising policy says, and whether this would constitute a violation of that, I’m sure that CBS is concerned about this from the perspective of wanting to manage their OWN brand as a media company,” added Gabor.

While the experts debate the ability to run a medical marijuana ad, dispensaries have no problem capitalizing on the event for sales. Some companies are suggesting added their CBD tinctures to recipes like salsa and others suggest drinking cannabis-infused beverages instead of alcohol. “Cannabis sales leaped 40% last year on the Saturday before the big game and this year could rise even higher thanks to California’s recent legalization of recreational marijuana,” said cannabis software company Green Bits.

In Washington, Mt. Hood Cannabis Company will deliver a free cheese or pepperoni pizza with the purchase and delivery of any half-ounce of pot Feb 1st, 2nd, and 3rd over the big Game Day weekend.

“We were enjoying a joint and a slice of Mogul Mountain pizza while brainstorming marketing opportunities for our dispensary when it hit us. Let’s announce our new weed delivery with free pizza, and what better way to kick it off than over Super Bowl weekend. Our shop works really hard to engage the local business community and since their pizza was so inspirational, partnering with Mogul Mountain Pizza was a no brainer,” said Devin Houston, Director of Marketing, Mt. Hood Cannabis Company.

 

 

 


Debra BorchardtDebra BorchardtJanuary 31, 2019
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Licenses for cannabis operators are multiplying as fast as the plants can be grown. According to Cannabiz Media, in the fourth quarter, the state of Connecticut doubled their dispensaries from nine to 18 and Oklahoma went on a license issuing frenzy. By the end of 2018, the Sooner state issued 805 dispensary licenses, 1,302 growers and 341 processors.

They are dwarfed by California which has almost doubled its licenses since November. The state has 10,940 active licenses, although Ed Keating the co-founder of Cannabiz Media noted that only a few dozen are annual licenses. In comparing licenses issued by activity, many categories almost doubled like distributor at 198%, manufacturer at 188%, and cultivator at 178% and retailers increased by 58%.

As more states legalize adult use sales, cannabis is becoming a rapidly growing market that topped $8.5 billion in spending in 2017 and will nearly reach $11 billion in 2018 and then push past $23 billion by 2022.

In Colorado, there were 509 retail dispensaries. Washington State has 514 and Oregon has 561. The numbers continue to grow as more states like Michigan, New York, and New Jersey begin planning for legalized adult use sales. As a result of this, being on the front line and customer facing is seen as the sweet spot for many companies. These are some of the top consumer-facing retail technology cannabis companies in the industry today.

Headset

Headset is the top retail data provider. This company captures consumer purchasing data at the point of sale in real time. Producers can use the data to learn what is and isn’t selling and determine consumer preferences. For example, when it comes to cannabis edibles, gummies are the big winner in Colorado, while mints are the product of choice in Washington. The retailers can also mine this data to track inventory levels and learn what their customers prefer. Do they like sweet or sour flavors?

Dispensary owners can also use the past performance data to predict future buying habits. If the upcoming Valentine’s holiday demonstrated a big jump in chocolate sales, then the owner can make sure they are stocked up.

Headset recently completed a Series A funding round of $12.1 million. This money will go towards improving current products and services and expanding the company’s offerings to additional U.S. states and international markets. It will also help the company serve new customers from the consumer packaged goods, beverage/alcohol, and financial industries, who are taking an increased interest in cannabis.

Springbig

Dispensaries can’t advertise in traditional methods and the customers probably wouldn’t respond to traditional ads anyway. Springbig is able to capitalize on this by helping dispensary owners reach customers in loyalty programs through text messaging. Everybody loves to be rewarded and find bargains when shopping and cannabis consumers are no different. Earning points for purchases motivates customers to stick with their favorite stores.

The data also helps owners get more sales and it also lets them analyze what works best with their customers. The company said that dispensaries that use Springbig found that their customers spent more and that revenue increased by 25%. The company can even drill down into the customer’s preference and then only send targeted promotions. For example, if a consumer only wants flower, then they won’t be sent promotions for edibles if that is what they prefer.

Seed

Seed is an in-store cannabis educator. With interactive touch screens, customers can easily get answers to their questions, which frees up the dispensary employees time. The company was developed to help the dispensary staff and also give the customer a nonjudgmental way to learn more about the products. Of course, the ultimate idea is to sell more product, but dispensaries are such a new experience for many people and the products are mostly unfamiliar. There is a huge learning curve and if you can ask your questions through a cool interactive touch screen, that seems easier than taking up  20 minutes of a budtenders time if there is a line of people waiting.

The units are integrated with the dispensaries inventory so once the customer goes through the touch screen to see what it is they want, the Seed is programmed to suggest items that are in stock. Having said that the company says it remains focused on education more than pushing a product. It isn’t a pay to play model such that one product can pay to be recommended over another.

Flowhub

Flowhub is the behind the counter solution for dispensary owners. This point-of-sale software is sold as a compliance solution to dispensaries. Flowhub includes a small handheld mobile device called a Nug to help speed up daily operations like scanning barcodes, checking in customers, and auditing inventory. The software gives managers complete control over their data, allowing them to generate inventory discrepancy reports and make adjustments before submitting via an API. Customers can also opt for the company’s free loyalty software that is included.

The system is also tightly synced up to METRC — the track and trace system used in most legal cannabis markets — making compliance really easy in those markets. At this time, it isn’t aligned with MJ Freeway or BioTrack, but that is expected to happen as the company expands into other markets. Flowhub is a little different from the others because it provides an open source option. This lets customers with a high level of technical knowledge customize the software for their needs. A tech nerd’s delight.

KlickTrack

KlickTrack is the new kid on the block after a beta launch in September. Co-founder Brendan Hill (of Blues Travelers fame) said it addresses common issues and pain points that the founders themselves experienced when they tried various software solutions as owners and operators of Paper and Leaf, a retail cannabis boutique, located on Bainbridge Island in Washington state. After years of frustration with non-integrated systems, they developed KlickTrack as a synchronized ecosystem, saving retailers time and money.

KlickTrack co-founder Steve Kessler said, “We created this system from inside a working retail shop from the ground up. We teamed with world-class developers, using a proprietary translator to solve industry-wide problems. KlickTrack removes the compliance worries from retailers and allows them to focus on running their business and having access to real-time actionable data.”

The company said it gives retailers the ability to easily view and manage inventory and offer their products organized by brand. It reduces inventory redundancies, speeds up workflow and enables retailers to maintain customer service on high traffic days. It provides real-time insights into all sales metrics, allowing retailers the ability to analyze historical customer and product data. The compliance translator ties directly into state regulatory systems and the company said it virtually eliminates the risk of fines and violations.


Debra BorchardtDebra BorchardtJanuary 31, 2019
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3min1110

 Organigram Holdings Inc. (OTCQX: OGRMF) has surpassed making one million cannabis pre-rolls since the legalization of adult use recreational cannabis in October 2018. The company said that it credits the automation of its processes along with surging consumer demand for the success of its large-scale production.

“At Organigram, we are proud to be among a select group of licensed producers who have been able to rise to the challenge of large-scale pre-roll production,” says Greg Engel, CEO, Organigram. “Our operations team has done an amazing job introducing automation to important parts of our process, building our overall capacity while retaining our focus on product quality.”

Organigram said that very few licensed producers have been able to supply the market with dried cannabis pre-rolls which are in very high demand. The demand can be blamed partly on the limitations the country set at the onset of legalized adult use sales. Vaping products and edible won’t be available for purchase until later this year. Making pre-rolls the most convenient of options for consumers.

Knowing these limitations, Organigram said it expected demand for cannabis pre-rolls to be in line with other regulated markets at approximately 10%, although sales to this point have surpassed that due to high customer demand and industry under-supply. The company said that pre-rolled products represent approximately 12% of all its gross sales. Organigram currently supplies Edison Cannabis and Trailblazer 0.5g pre-rolls to nine provinces from coast to coast.

“We take our commitments to our partners and customers very seriously,” says Engel. “Through an aggressive but highly actionable growth strategy, meaning that with the expansion of our team, its expertise, and our facility, we are on track to deliver on our strategic promises.”

Expansion Update 

Organigram also gave an update on the expansion of its Moncton Campus located in New Brunswick. Phase 4A,  is currently underway and will offer the Organigram team 31 new grow rooms and a new mechanical room. As the Company’s Phase 4A construction progresses, Phase 4B construction also begins to take shape with 32 new grow rooms. Phase 4C will follow with 29 new grow rooms.


Debra BorchardtDebra BorchardtJanuary 29, 2019
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3min4780

Sproutly Canada, Inc. (OTCQB: SRUTF)  announced financial results for the three and nine months ended November 30, 2018. The company reported a net loss of C$2.8 million or $0.02 per diluted share for the quarter versus last year’s net loss of C$473,405 for the same time period. The company also delivered a $9.5 million net loss for the nine months ending November 30.

In the filing, Sproutly noted that it has not generated any revenues from operations and has incurred losses since inception. The company has an accumulative deficit of $12,312,832 and negative cash flows from operating activities for the period from January 17, 2017 to November 30, 2018. To date, the company’s activities have been funded through financing activities.

“We continued to make significant progress toward a number of our key corporate initiatives in Q3. We completed a $20.7 million bought deal financing, which strengthened our balance sheet and provides us the ability to accelerate our objectives for fiscal 2020. “, said Keith Dolo, Chief Executive Officer of Sproutly. “In addition, we added key personnel and advisors, and began cultivation at THR. With the completion of these milestones and the proceeds of our recent financing, we are well positioned to execute on our plans to advance the business towards our short term and midterm goals.”

The company has a cash position of C$11.5 million as at November 30, 2018, up from $0.3 million as at August 31, 2018, as a result of completing a $20.7 million bought deal financing in the quarter. Sproutly also reported working capital of $4.2 million on November 30, 2018.

The company said in a statement that it completed the development and formulation of an initial portfolio of functional beverages with its proprietary naturally water soluble cannabinoids (“Infuz2O”). The beverages combine recently licensed rights for the proprietary water-soluble mineral platform (“MiST Platform”) with Infuz20. The initial portfolio consists of three separate cannabis/hemp infused beverages that provide the following functions: a) Focused Energy; b) Stress relief and Relaxation; and, c) Restful sleep support.


Debra BorchardtDebra BorchardtJanuary 29, 2019
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The New Mexico Medical Cannabis Program racked up $106 million in sales in 2018 for a 23% increase over 2017. Patient enrollment grew by 45% from 2017 to 2018 and now counts 67,574 patients in the system. It’s easy to see an imbalance here. The patient count grew faster than sales.

The largest provider in the system Ultra Health said that the problem is plant count limits combined with regulatory hurdles. The company was the largest provider in the state with a market share of 15.4% in 2018 and reporting $16 million in revenue for the year.

“Surpassing $100 million is a great milestone for the Medical Cannabis Program,” said Ultra Health CEO Duke Rodriguez. “However, the industry would have exceeded $212 million if patients were able to purchase an adequate supply of cannabis as allowed for similar patients in Arizona and Colorado.” The belief is that patients are being forced to seek medicine outside of licensed providers which is considered the black market.

Some of the restrictions include purchase limits, potency caps, no reciprocity with patients from other legal states and the inability of producers to offer savings for large purchases.  The problems re causing high prices for the patients.

The state’s top five producers accounted for 43% of the reported revenue in 2018 and there are 35 licensed producers. Only 12 grew faster than the overall industry’s pace, while 23 producers fell behind.

2018 Revenue  $ Increase 2017 % Increase
1.     Ultra Health $16,325,711 $5,787,168 55%
2.     R. Greenleaf $9,014,260 $320,555 4%
3.     Verdes $7,304,424 $1,192,124 20%
4.     Sacred Garden $6,445,460 $3,050,136 90%
5.     PurLife $6,177,973 $3,281,062 106%
        Total Industry $105,796,892 $19,593,808 23%

Ultra Health said that under the current medical marijuana program, revenues are projected to reach $131 million by the end of 2019 and patient enrollment is forecast to reach 87,500. The company said that if the program allowed patients to fully access medical cannabis like Arizona and Colorado, the industry could have easily hit $290 million in sales.

“Whether it’s for physical, mental or social well being, every adult presenting themselves should have the full legal right to choose the cannabis products they need, in the quantities they want, from the provider they prefer and at a price they can afford,” said Rodriguez.

A new report from BDS Analytics and Arcviews stated, “Despite inaction on calls to expand access by adding
qualifying conditions, the state has made some small improvements to the cannabis program. State officials
have simplified the application process for those seeking a medical cannabis card and made other changes
to the application process to address complaints of long application backlogs that result in delayed card issuance.”



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