Editor-in-Chief

Debra BorchardtDebra BorchardtDecember 24, 2019
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6min5910

Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) said that it expects its Illinois cannabis stores Rise Mundelein, Rise Canton, Rise Quincy, Rise Joliet and 3C Joliet will be open for adult-use cannabis sales on January 1, the first day it is legal to purchase cannabis in the state of Illinois for all consumers aged 21 and above.

“January 1, 2020, will be a historic day in Illinois and we are ecstatic to be a part of it. GTI kicked off the medical program with the very first cannabis sale at Rise Mundelein in 2015 and we are proud to do the same with adult use sales at the same location just four years later,” said GTI Founder and Chief Executive Officer Ben Kovler. “The state has been a leader in regulated cannabis programs, particularly with social equity as a focal point for legalization. We have created jobs, tax revenue, and – most important – access to safe and compliant products for people to improve their well-being. Congratulations to the cannabis and social equity advocates, cannabis operators, legislators, regulators and the citizens of Illinois who have made this happen.”

Illinois Governor J.B. Pritzker released the plan for full cannabis legalization in May which is set to begin on January 1. Companies that currently had medical cannabis licenses would get a jump on other companies with regards to applying for licenses.

Two of GTI’s Illinois stores, The Clinic Effingham and 3C Naperville, will only offer sales to customers with a valid Illinois medical marijuana card. The Clinic Effingham is expected to begin adult-use sales later in January pending a special use permit hearing. Naperville will hold a non-binding voter referendum on adult-use sales in March, and until then the store will only be open to registered medical patients.

GTI is rebranding its Illinois adult-use stores to Rise as part of its national retail brand that focuses on well-being through the power of cannabis. Rise Mundelein (formerly The Clinic Mundelein) and Rise Canton (formerly Salveo Health & Wellness) are the first of the rebrand rollout in Illinois. Rise Quincy and Rise Joliet are both brand new stores and are expected to be the first state-approved stores to begin operating following the most recent dispensary license issuances as part of the passage of the adult-use program. Rise Joliet is expected to be open January 1, pending a scheduled inspection in December.

The company also wanted cannabis customers to know that they can expect tents, food, beverages, music and heat lamps to ensure comfort during potentially long waits. Security personnel will be on the premises to facilitate safety. Rise Mundelein and 3C Joliet will also hold patient-appreciation events the weekend of December 28 to 29.

“GTI has been serving medical cannabis patients since November 2015 and we will continue to do everything possible to ensure patient access to safe and effective products during this rollout period,” said Kovler. “Our team has been hard at work increasing production at our cultivation and manufacturing facilities in Rock Island and Oglesby; adding production and retail staff; expanding and opening new retail stores; and adding hours and points of sale at our retail locations.”

Information on adult use stores and hours for the first week of adult use cannabis sales are:

Rise Mundelein: 1325 Armour Blvd., Mundelein, IL. First week hours – 6:00 am to 10:00 pm. Email: mundelein@risecannabis.com

Rise Canton: 3104 North Main Street, Canton, IL. First week hours – 8:00 am to 8:00 pm.  Email: canton@risecannabis.com

Rise Quincy: 2703 Broadway Street, Quincy, IL. First week hours – 8:00 am to 8:00 pm. Email: quincy@risecannabis.com

Rise Joliet: 2903 Colorado Avenue, Joliet, IL. First week hours – 6:00 am to 10:00 pm. Email: joliet@risecannabis.com.

3C Joliet: 1627 Rock Creek Blvd., Joliet, IL. First week hours – 6:00 am to 10:00 pm. Email: info@gticlinic.com


Debra BorchardtDebra BorchardtDecember 23, 2019
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5min3450

Aurora Cannabis Inc. (NYSE: ACB) provided an update on its operations with the introduction of new product formats, recent industry recognitions, and updates to existing operations. It didn’t seem to have the intended effect as the stock dropped another 7% to lately trade at $2.06.

Aurora disappointed shareholders last month when the company reported that its consumer cannabis revenues fell 33% sequentially from the previous quarter. The decline in cannabis net revenues was attributed ordering that slowed considerably during the summer as distributors worked through inventories and as the industry was impacted by the slow pace of retail store licenses.

“We have focused our collective efforts to be ready for the successful launch of Cannabis 2.0 as Canada takes the next step in the legalization of newly allowed product forms. We are ready and have launched a diversified portfolio of new product formats and are excited for Canadians to have access to high-quality, safe alternative cannabis products such as edibles, vape pens and other derivatives,” said Terry Booth, CEO of Aurora. “We have prudently deployed capital and we believe that we’re ready with the appropriate combination of technology, scale and consumer insights to have the right products on store shelves in a timely fashion. This was not an easy task and I would like to thank the entire Aurora team for their collective efforts in getting 2.0 across the goal line in time for our provincial regulators.”

The company said it trying to reduce expenses, cut near term debt and bolster liquidity in an effort to position itself for long-term success. The previously announced deferral of construction and commissioning activities is expected to conserve approximately $200 million of cash in the near term. Aurora believes that its existing assets are sufficient to meet current demand at a low cost per gram. The company said it expects to have the flexibility to ramp up projects as global demand dictates.

In late November, the company also retired $227 million of the $230 million 5% unsecured convertible  debentures that were due in March 2020 with the issuance of shares and thereby preserving cash. Aurora continues to evaluate multiple sources of capital and currently has access to undrawn capacity under a C$360 million credit facility with a syndicate of banks, in addition to its $400 million at-the-market equity distribution program.

New Products

Aurora said it started shipping initial orders received to ten of Canada’s provincial regulators of Cannabis 2.0 products following December 17, 2019, however, the company cautioned that most Canadian consumers will likely not see these products on retail store shelves until early January 2020 due to varied retail operations across the country. Patients can now immediately access a variety of the new product formats.

Initially, the company said it is providing a variety of CBD and THC vape and edible products, such as gummies, chocolates, baked goods, and mints. These new cannabis products are being produced at Aurora Sky in Edmonton, Alberta, Aurora River in Bradford, Ontario and Aurora Vie in Pointe-Claire, Quebec. These centers have been outfitted to provide centralized production, packaging, logistics and distribution capabilities. The Company has prioritized its resources to prepare for a successful initial launch and has built inventories to support an ongoing replenishment strategy to help ensure consumers across Canada have access to a diverse portfolio of high-quality derivative products.


Debra BorchardtDebra BorchardtDecember 19, 2019
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15min4630

The Green Market Report sat down with Curaleaf’s CEO Joe Lusardi at last week’s MJ Biz conference in Las Vegas NV. This interview has been edited for grammatical purposes.

Debra Borchardt:             The Select deal – you brought those numbers I guess to a new reality. Where are you now with that transaction? Because you’ve pretty drastically changed the valuation on that.

Joe Lusardi:                         I’m not sure I’d characterize it that way. What I would say is that we reduced the base consideration. The transaction, if they do what we think they’re going to do, will be 90 million shares. So it’s just, we restructured it to de-risk it and make some of the consideration an earnout. And we thought that that was the prudent thing to do given what was going on in the vape environment.

Now you’re maybe aware that the Massachusetts vape ban lifted today. The CDC is saying that we’ve already reached the peak of people showing up with lung disease. And that started the decline, which all points to the fact that the problem is largely from the black market. So we’re actually pretty confident in that category overall, and that consumers are going to come back to that form factor, and we feel pretty good about the transaction, to be honest. And I think it’s also important to know that the Select brand is not just the vape brand, it’s a family of products. So you’re going to be seeing a number of new products from Select over the coming months. One is a gummy that’s now available in a couple of markets. You’re going to see a spray, a tincture, and a couple of other novel form factors in the Select brand. So we feel good about the transaction.

Debra Borchardt:             Were you surprised at all with any of the Select sales numbers when you really started to peel back some of the layers on Select? Because I had heard a lot of rumors out in the market about Select before you guys got interested in them.

Joe Lusardi:                         There’s no manipulation of the numbers. I mean we did a pretty thorough diligence of the business. What I would say is that they clearly felt the impact of the vape crisis. We did a thorough vetting of the transaction before we did the deal. We’re very optimistic. Again, I said that consumers are becoming more aware that they should buy regulated products. Select’s whole brand ethos is about safety and quality, and I think you’ll continue to see that as they pioneer new hardware and new products. So I think we felt very good with the transaction. We’re trying to close it on January 2nd. We’re working with regulators right now. We’ve cleared the DOJ HSR review, which is a pretty big event. So everything looks to be on track for early January close.

Debra Borchardt:             You just put in a new executive, Joe Bayern, a president that was from INDUS Holdings, but he seemed like he had mostly a CPG background. We’re seeing a lot of that within the cannabis industry, this whole hiring of CPG executives. What is the thought process for you guys behind that?

Joe Lusardi:                         I would characterize Curaleaf as an early-stage consumer product company. And I think people that come out of that industry, that have a depth of knowledge and building brands, building infrastructure and taking companies from small to bigger is highly relevant for where we are in our growth curve. So I’m ecstatic that he joined the team. He’s a bit of a unicorn in that he also had cannabis experience. But that’s not why we hired him. We hired him for his experience before cannabis.

It’s helpful that he’s been in the industry for 11 months and we don’t have to explain Cannabis 101. But we hired him because he has worked on some very significant transformations of businesses, including Cadbury, Dr. Pepper, Snapple, he was on the senior team that built VOSS Water, which is now a premier global water brand. So he’s a very capable executive, has skills that I certainly don’t have. And it’s going to be a huge addition to the team.

Debra Borchardt:             So you just mentioned that Select has got new products coming out. What’s really your strategy then for 2020?

Joe Lusardi:                         The marketing people would kill me if I say too much more. But what I’ll tell you, we really think that consumers are coming to cannabis and they’re looking for a variety of form factors. So you know, flower already represents less than half the sales and in most states, vapes are coming out strong and the edible category continues to grow. And so I think that’s where you’re going to see a lot of development in 2020, particularly for brands like Select. And I think that those products are really exciting because they’re consumer packaged goods, right? And so they lend themselves to marketing, form factors, predictability, consistency, and really brand building. So that’s why we’re really excited about what we have ahead of us.

What makes Curaleaf unique is that when we close Grassroots in the spring, we will have a platform unlike any other cannabis company really in the world. And what’s really exciting is we’re going to take the number one brand from the West Coast and move it all across the United States. So Select will be the number one brand in most major markets in the country for 2020, and no one else is going to do that.

Debra Borchardt:             When you look at Illinois and Michigan, everybody’s saying Michigan is going to be the next big market. Oh no, it’s Illinois. Which is it?

Joe Lusardi:                         It’s Illinois.

Debra Borchardt:             Illinois?

Joe Lusardi:                         That’s not debatable, it’s 13 million people in 55 stores. The numbers stack up really well. It’s just math, I’m not a genius.

Debra Borchardt:             But I’m sure you’ve heard people say the same thing like, “Oh, Michigan is going to be the big one.”

Joe Lusardi:                         Look, I think Michigan is a really interesting market. It has a very prolific caregiver market that has a huge amount of patients in the state. It’s really, really going to come down to how the market structurally changes, because you have a lot of what I would say, activity, that hasn’t always necessarily fit within the framework or the regulations. There’s been a lot of caregivers and a lot of dispensaries that are operated that were not fully licensed by the state. And so if they can corral all that activity and really push it out through the regulated channel, unlike California, then Michigan has a chance to be a very big market, a regulated market. There’s no denying that both Michigan and California are big cannabis markets, that’s for sure undeniable, but can they be good regulated markets? We’ll see. California clearly is struggling with that concept.

Debra Borchardt:             And Massachusetts recently started their adult-use sales. Everybody was saying, “Oh, all the New Yorkers are going to go across the state lines, and that really doesn’t seem to be happening. I think a lot of people thought that Massachusetts was going to be the domino that was going to tip a lot of the other Northeastern states. And that doesn’t really seem to have happened.

Joe Lusardi:                         Massachusetts. My home state has clearly not lived up to expectations in 2019. I would say that that was largely driven by factors out of the operator’s control. It was really driven by how the government rolled out the program. I think that only now the state has 30 stores open. So this…

Debra Borchardt:             And they’re disappointing. I’ve been in a couple of them and I’m like, “You got to be kidding me.” But I’m used to going to California dispensaries, and such.

Joe Lusardi:                         I mean California has had a 20 years quasi-legal marijuana market. So you’re not going to get there tomorrow. But it’s also true that because Massachusetts has been, I’ll say deliberately in rolling out the program, it’s supply constraint. So you don’t have a diversity of manufacturers. You don’t have a diversity of growers. You don’t have a diversity of stores, there isn’t a really prolific wholesale market.

It’s a very challenging operating environment right now. The early numbers are promising. I think 2020 will be a big year for Massachusetts. It will be a big leap forward. We just opened our first adult-use store in November. We’re going to open up two more, one in Provincetown, we think in early 2020 and then another in the state. So it’s going to be a good year for Curaleaf and I think that as more operators get open, the market will develop, there’ll be more specialization in manufacturing. There’ll be more products, and the shelves will fill up, and it’ll be a more wholesome retail experience, but it’s unreasonable to expect it will be like California. It’s just, we don’t have that history. Right? The East Coast has been very deliberately rolled out with a limited number of players, very capital intensive.

Debra Borchardt:             Very, very conservative.

Joe Lusardi:                         So it’s going to take time. But I mean anecdotally, if you go to the stores out in the Berkshires and you’d go in the parking lot, there’s a lot of New York license plates in those parking lots. And what I would also say is that I do think it will be a catalyst in 2020 because it’s putting a lot of pressure already on Connecticut. If it had rolled out the program faster, the pressure would have been greater. But Connecticut clearly needs to address a massive budget shortfall and I think they’re going to look to cannabis as one avenue.

Maine is going to go adult use this spring. Governor Mills has been fantastic and is really driving the program. So you’ll have two Northeast states, Connecticut is under a lot of pressure. New York, the dialogue is going to be very active in January through March, I mean the Lieutenant Governor came out today and said that it’s long overdue. So that’s interesting. And Governor Murphy in New Jersey said he’s going to take another crack at it, so it’s going to happen. Governor Wolf in Pennsylvania supports it. Progress is not linear or sometimes quick, but I genuinely feel like maybe the dominoes are falling, not as fast as people hope, but they’re going to fall.

Debra Borchardt:             So it sounds like you’ll be ready to put a close to 2019. 2020 looks a lot more promising.

Joe Lusardi:                         I have to say for Curaleaf, despite the pain in the equity markets, this is a fantastic year for our business. We had a major inflection point in Q3 we showed 30% top-line growth for the second quarter in a row, we’re adjusted EDITDA positive two quarters in a row. We’re opening stores, we’re executing on our business. We’re turning all of the investment we’ve made into cash-generating assets. So this is the best year in our company history. I mean, it was really a great year, operationally. 2020 sets up to be even better.


Debra BorchardtDebra BorchardtDecember 18, 2019
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12min4380

This interview was conducted at the 2019 MJBiz Conference in Las Vegas. Green Market Report sat down with Leif Harrison CEO Americas for Elixinol.

Debra Borchardt:             Let’s talk about the FDA and the guidance or lack of guidance that we’re getting from them on CBD. We know they have had public hearings, but I feel like they’ve been going back and forth on how quickly they’re going to react or make decisions around CBD. I mean, how is Elixinol addressing that or responding to them?

Leif Harrison:                     On staff, we have one of the best regulatory and compliance advisors, we think, in the industry, Joy Beckerman. She’s our face on all of the industry-leading associations and lobbying firms, and our point of contact for the best attorneys in FDA related law. And so we make sure that our voice is heard in how legislation should be moving forward. But I think it’s generally been a surprise to all of us that there are these pauses and there’s no news. And then there’s sort of a reaction to a long pause by restating things they’ve said before and people try to parse that out as much as possible but it’s really just saying the same things they’ve said before.

I think in general, for us at Elixinol, and I imagine others in the industry thought that by the end of 2019 we would see some material movement and where this is going. Instead, it seems to just be falling down to a simple argument. Is CBD a dietary supplement or isn’t it? And until that’s addressed head-on, the rest is really just a lot of turmoil for people trying to stake out how to run their businesses or what products and services to offer to the best of their ability. So it’s put a delay on what was otherwise, I think, a moment in time that we were targeting for some solutions and some outcomes instead of just more of the same.

Debra Borchardt:             One of the things that they did recently was they issued several warning letters to some fairly small companies. Certain marketing words triggered them. It seems though that by sending these warning letters it gets harder for the companies to actually just describe their products, not even say what their products can do, but just describe the products. Are you finding it really hard to work within those strict guidelines on verbiage?

Leif Harrison:                     Absolutely. It’s a constant tension. And then that doesn’t even take into account how this has been unfolding state by state. So labels are ground zero. We don’t make wellness claims, we never have. So our mindset has been in the right place with that from the beginning. But labels have been challenging because, okay, you have to say dietary supplement. No, you can’t say dietary supplements. Do you want to call it extract? No, it’s hemp supplement, whatever that is, and it’s this constant word game going around. And so it’s really who has the better argument at the end of the day because somebody is going to tell you it’s being done wrong and these whole issues need to be settled. We’re well into the twenty… This has been a year now, I can’t imagine going through 2020 and not having resolution to this.

Leif Harrison:                     It’s not like delaying is going to make the problem any simpler to solve. So the warning letters have been going out to characters in the industry who make wellness claims and they’re pretty blatant about it. So we acknowledge that that’s something we wouldn’t do. We understand why the warning letters go out. But at a higher level are potential class-action lawsuits, just strictly based on labeling state by state and best efforts. In one state you’re right in the next state you’re wrong. And federally you’re always wrong. So we’re not there yet.

I think keeping in line with the other companies in the industry that are essentially running every day to make sure it’s right, and if we have to change a label, we change a label. But at the end of the day, it’s essentially a full-spectrum CBD hemp extract product and the nutrition panels are right, the ingredients are right. What we say is in the bottle is in the bottle. If there’s something in the bottle, it’s listed in the proper amounts and all of that. So it’s essentially, operate to the best of your ability, but we don’t have closure and I think we’re further away from closure now than we thought we were going to be just a little while ago.

Debra Borchardt:             We did get some news from the financial agencies having to do with SARS reports and hemp growers. Now some people took that as an interpretation to mean hemp companies and some people took a very narrow interpretation that it meant just literally the farmers, they have growers. How did you guys feel about that recent decision?

Leif Harrison:                     It’s not even just these decisions, they’re all, everything is being parsed to the maximum possible degree depending on what side of the fence you’re on. And everybody is finding lawyers that will write legal opinions in support of them and it’s confusing. It seemed like an unnecessary challenge to the farmers for the 2020 crop that’s going to be in place. So to practically enforce any of these things they’re trying to enforce also seems like a whole other set of challenges. So this has literally got to play itself out. I think there’s a little bit of time for the farmers for next year, but I don’t know if I’ve ever seen sort of a confluence of the laws of unintended consequences happening in one place at one time. So as soon as you think you’ve got something stated just right, boom, everybody comes and jumps on it and rips it to shreds. And whether you’re the government or a private company and it’s difficult.

Debra Borchardt:             Let’s talk about the company’s rebranding. You have changed your look and feel, what prompted that?

Leif Harrison:                     So this will be a rolling effort across all of our skus starting in January, with a big sort of commercial launch targeted for Expo East in March. But it’s just driven by a lot of consumer reaction that we’re maybe too masculine, too medicinal in our look and feel. We hear that loud and clear. And so we have a whole new marketing team on board and they’ve got a whole new vision for what the brand should be given what the demographics are in the industry and who’s buying. And we’ll be rolling that out on existing skus and new skus along the way.

Debra Borchardt:             Elixinol has always been really known for the quality of the product. It’s something that the brand is well known for and maybe more so than many other brands, but you’ve got an organic version coming out. Tell me about that.

Leif Harrison:                     Right. So in terms of quality, Brightfield Group has us rated as the number one CBD company for recommendations by store employees, for stores who carry our brand. But with that is, we’re trying to essentially meet the customer where they’re at. And most customers are brand new, they have a strong learning curve, they have a lot of noise in the industry, they need to filter through, and so we have a double challenge of not only trying to make the best products but also educating customers because most of them are new to this type of wellness product. So organic is just another differentiator. It’s sort of a natural extension that as there’s more and more opportunity for certified organic crops, certified organic processing, certified organic extract, CBD ingredients all the way down the supply chain, organic is not the end-all to be all, but it’s just a necessary option for a consumer who might feel that there’s a value difference in their wellness between a conventional tincture, let’s say an organic tincture.

Debra Borchardt:             Let’s talk about Japan. What happened there? You guys pulled out of that market?

Leif Harrison:                     Yeah, we pulled out. Elixinol went through a major leadership change last July so we’re about four to five months into new leadership. Part of that leadership was auditing every single aspect of the business and the markets we were in. And without question, our culture is built on compliance, and when we find that we’re not in compliance domestically or internationally, we take action. And in the case of Japan, it meant giving up on a market that we were in, but we weren’t in it in all the ways necessary to dot all the I’s and cross all the T’s. And we’re not interested in misrepresenting who we are, what our products are, just to be in a market.


Debra BorchardtDebra BorchardtDecember 17, 2019
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3min2620

Fire & Flower Holdings Corp.  (TSX: FAF) announced that its third-quarter 2019 revenue increased 443% to $13.7 million for the quarter ending November 2 over last year’s $2.5 million for the same time period. It was also higher sequentially over the 2019 second-quarter total revenue of $11.1 million.

The company also delivered a net income of $10.2 million over last year’s net loss of $22.5 million for the same time period. Fire & Flower also noted that the net income per share of $0.08 or $0.07 on a fully diluted basis for the quarter was attributed to accounting gains recorded in other income on the revaluation of the derivative liabilities associated with the convertible debentures.

“With the emerging Canadian cannabis industry facing headwinds, Fire & Flower continues to deliver a track record of growth and meeting our objectives” shared Trevor Fencott, Fire & Flower’s, Chief Executive Officer. “We anticipate meeting our goal of 45 open and operating stores by the end of our fiscal year. Our industry-leading Spark Perks members program ensures that our customers are engaged with the Fire & Flower brand as their cannabis retailer of choice.”

Post Quarter

Since the quarter closed in November, Fire & Flower has received nine additional cannabis retail store licenses and began operating three additional cannabis retail stores in the province of Alberta. The company said it is also preparing to start operations at the remaining six licensed cannabis retail stores prior to the company’s fiscal year-end. In addition to that, Fire & Flower has entered into the final stages of the application process for cannabis retail store licensing in the province of British Columbia.

Convenience Stores

It was just a note, but one of the most important items in the company’s announcement was that it closed the strategic investment with Alimentation Couche-Tard Inc. including an initial investment of $25.9 million (through its subsidiary). The company said that the strategic investment would result in Couche-Tard obtaining a controlling interest in Fire & Flower if all securities issued in connection with the strategic investment are converted/exercised in full. This would mean that a major convenience store chain would own a cannabis company.


Debra BorchardtDebra BorchardtDecember 16, 2019
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4min3150

HEXO Corp. (TSX: HEXO)(NYSE: HEXO)  reported its financial results for the first quarter fiscal 2020 ended October 31, 2019, in Canadian dollars. The company reported that the net revenue in the first quarter decreased sequentially to $14.5 million versus $15.4 million in the fourth quarter of 2019. The revenue increased over $5.7 million reported in the first quarter of 2019.

The net loss for the quarter was an eye-popping $62.4 million. The company attributed the increase in loss to “The larger magnitude of the company’s operations, the expanding scale production and sales in the period, and an impairment loss.” Operating expenses increased from $22 million in the first quarter of 2019 to $35.1 million for the first quarter of 2020.

The stock was falling over 8% on the news of the losses and was lately trading at $2.08, down from its 52-week high of $8.40.

“We have done some pretty heavy lifting on our operations, as we work towards profitability in 2020. The choices that we have made and implemented have already led to a 25% reduction in our operating expenses,” said Sebastien St-Louis, CEO, and co-founder of HEXO Corp. “Cost control combined with our multi-brand approach, an updated strain mix, as well as the introduction of new products, will help us increase our market share and total revenue, leading us towards great results in 2020. I am more confident than ever in our ability to continue down this path and to pivot with more speed and assertiveness should market conditions evolve again.”

The company noted that adult-use sales volume during the quarter increased 5% to 4,196 kg from 4,009 kg equivalents sold in the prior quarter. Gross adult-use revenue per gram equivalent decreased to $4.35 in Q1’20 from $4.74 in Q4’19, reflective of the provision for sales returns and price adjustments recorded in the quarter. “The provision is reflective of a general best estimate provision for returns and price adjustments based on the Company’s assessment of sell-through and slow-moving inventory. This was partially countered by the addition of the premium brand Up cannabis, which commands revenue of $7.03 per gram on dried flower during the quarter. The adult-use net revenue per gram equivalent decreased to $3.24 in Q1’20 from $3.51 in Q4’19, reflecting the impact of the provision above.”

Block B Issues

Hexo disclosed on November 15, 2019, that there was a licensing issue in Block B of its Niagara facility, inventory from Block B was quarantined and held back from sales. The inventory was kept on the books and although destruction was a possible outcome, Hexo has said it has reassessed any risks related to such inventory and concluded that it is cleared for sale and will not be subject to destruction. Block B is now fully Licensed by Health Canada.

 


Debra BorchardtDebra BorchardtDecember 11, 2019
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3min4860
REX Shares (REX) has launched the MJO, the first leveraged exchange-traded product in the U.S. linked to the cannabis industry. MJO is an Exchange-Traded Note (ETN), is linked to MSMJ, the Indxx MicroSectors™ North American Cannabis Index, and will seek to provide 2x leveraged exposure to the Index.
In a statement, REX announced that the MJJ, a 1x version of the Exchange Traded Notes is linked to the Index. The MicroSectors Cannabis 2x Leveraged ETN (symbol: MJO) and MicroSectors Cannabis Index ETN (symbol: MJJ) started trading today on NYSE Arca. The ETNs are senior, unsecured obligations issued by the Bank of Montreal.
“We created the MicroSectors lineup to innovate the ETP landscape and launch ‘first of’ products like this first 2x Cannabis ETN in the United States,” said Scott Acheychek, President of REX. “BMO has been a great partner and we enjoyed working with Indxx for the first time on this index. We are all thrilled to launch these ETNs. They represent a tremendous step forward for cannabis stock investing and trading, and we believe they are providing many U.S. investors with the targeted North American cannabis industry exposure they’re looking for.”
The Index provides a quarterly IPO review for new issuances and a quarterly review for stocks facing potential regulatory bars to engaging in the cannabis industry. The Index selects U.S. and Canadian constituents from five key sub-themes: Cultivator, Pharmaceuticals, Testing & Analytics, Industrial Hemp, and Ancillary. Companies are screened as either pure play or quasi play depending on the percentage of revenue that is derived from Cannabis.
As the first leveraged exchange-traded cannabis product available in the U.S., MJO opens up new trading possibilities for sophisticated investors. “We’re particularly excited about providing U.S. tactical investors with daily 2x leveraged exposure to the cannabis industry,” Acheychek continued. “We think it will serve as a valuable additional tool in investors’ trading toolkits.”

Debra BorchardtDebra BorchardtDecember 9, 2019
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2min6150

Cresco Labs (CSE:CL) (OTCQX:CRLBF) has completed its first harvest from its expanded cultivation facility in Lincoln, IL. The state will begin sales of legal adult-use cannabis on January 1 and is projected to be a $2-4 billion dollar market once it has matured and is expected to be one of the largest cannabis markets in the country.

Cresco has an advantage in the marketplace as the only operator in the state with three cultivation facilities and currently has 25% of the share in the medical market. It has 35,000 square feet of cultivation space across the three facilities.

“Cresco Labs has worked tirelessly to bring additional capacity to the Illinois cannabis market. The beneficial changes in the medical law created a rapid increase in demand that has recently outpaced supply. With this first harvest out of the expanded Lincoln facility, we are thrilled to bring this additional capacity to the patients of Illinois and the consumers in the soon to launch adult-use program,” said Charlie Bachtell, Cresco Labs CEO and Co-founder. “With the scale of this expansion phase, additional incremental production from the expansion areas will gradually increase ramping up for market distribution starting now and accelerating late Q1 through Q2. The ability to restock shelves reliably to ensure customers always have access to product is key to both generating solid financial results and building long term customer loyalty with medical patients and adult-use consumers.”

According to the company’s statement, “The company embarked on an ambitious expansion plan that will bring the total area under cultivation to approximately 243,000 square feet by year-end. At the Lincoln location alone, Cresco has created the largest cultivation facility in Illinois at roughly 224,000 sqft and added over 140,000 sq ft of additional indoor and greenhouse cultivation space. Cresco is legally entitled to expand its three facilities to have an aggregate total of 630,000 sqft of flowering canopy – the largest capacity footprint in the state.”


Debra BorchardtDebra BorchardtDecember 9, 2019
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4min5710

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) named David Klein as the company’s Chief Executive Officer effective January 14, 2020. 

“Canopy Growth sits at the forefront of one of the most exciting new market opportunities in our lifetime,” said Klein. “Thanks to the efforts of Mark and the entire team at Canopy Growth, no company is better positioned to win in the emerging cannabis market. I look forward to working with the team to build on the foundation that has been laid, to develop brands that strongly resonate with consumers, and to capture the market opportunity before us. Together we will drive sustainable, industry-leading growth that benefits employees, shareholders and the communities in which we operate.”

The company said that Klein has served in a number of senior leadership capacities over the past 14 years at Constellation Brands. His background includes extensive CPG and beverage alcohol industry experience, strong financial orientation, and experience operating in highly regulated markets in the U.S., CanadaMexico and Europe. However, Klein has zero experience in the cannabis industry.

Interim CEO Mark Zekulin will be stepping down from his role and resigning his seat on the Board of Directors of Canopy effective December 20, 2019.  As a founding employee of Canopy Growth (then Tweed Marijuana Inc.), Mark was instrumental in building Canopy into what it is today first in the role of President, then President and Co-CEO, and finally as CEO.

“It has been an incredible six years at Canopy Growth, and I have witnessed the team and Company grow from five people in an abandoned chocolate factory to thousands of people across five continents,” said Zekulin. “Canopy today is positioned to win with the resources, infrastructure, team, and award-winning culture needed to succeed. It has truly been an honor to be part of building a unique, Canadian success story like Canopy, and I look forward to seeing the Company continue to evolve and grow under David’s leadership.”

Canopy’s original CEO Bruce Linton was ousted within a year of the Constellation Brands investment. Since that time, the company has floundered as the company took a restructuring charge of $32.7 million for returns, return provisions and pricing allowances primarily related to its softgel & oil portfolio in the second quarter. Canopy also has recorded an inventory charge of $15.9 million to align the portfolio with its new strategy. The company said that the new strategy included new retail pricing architecture, a rationalized package assortment, and a focused marketing/educational strategy to further develop this category.

While Klein is listed as an experienced strategist with the ability to build a consumer brand while leveraging operational scale across a dispersed production footprint, there was no indication with regards to his knowledge of cannabis other than his having served on the Canopy Growth Board of Directors for over a year and is presently Canopy Growth’s Board Chair.


Debra BorchardtDebra BorchardtDecember 5, 2019

4min4190

Mostly known for Pax and Juul sales, Greenlane Holdings Inc.(NASDAQ: GNLN) is now launching a line of functional glassware decorated with the imagery of legendary graffiti artist Keith Haring. The smoking accessories include small glass pipes, larger water pipes ashtrays and regular rolling trays.  The K.Haring Collection launches November 21, 2019, in Higher Standards stores and will be available online on November 25, 2019, at haringglass.com.

“As a longtime admirer and supporter of Keith Haring, his art, and his legacy, I am thrilled to introduce the K.Haring Collection,” said Sasha Kadey, Chief Marketing Officer of Greenlane and Creative Director for the K.Haring Collection. “The art world has long had an intertwined relationship with cannabis and has in many ways been instrumental in the advancement of the industry. The K.Haring Collection will help our mission to destigmatize and elevate the cannabis experience.”

Kadey said he has looked at numerous deals for branding efforts, but none resonated as strongly as the Haring artwork. The artist is not only well-respected in the art world, but as a graffiti artist, he also brings street cred amongst the cannabis community.

Haring passed away in 1990 at the age of 31 in Manhattan from the Aids disease. The Haring Foundation has a mission to continue to promote the artwork but is also known for supporting not-for-profit organizations that help underprivileged children, as well as organizations involved in education, prevention, and care related to AIDS. Haring doesn’t have any cannabis images in his artwork, but his skateboard images are loved by the skateboard community which does support the cannabis community.

Kadey said there was a lot of crossover between cannabis, the art world, and skateboarding which led to the company’s launch party that combined a show of the new products with apparel from Diamond Supply that featured Haring artwork. The event was held in Manhattan and drew a combination of cannabis industry insiders, as well a some of the top city skateboarders.

The ten-piece collection consists of high-quality glassware that may be used as décor and includes all of the essentials for an elevated smoking experience. Kadey made a point of mentioning that the company didn’t just grab and glass product and slap an image on it. The items were specifically designed for this project. Each piece is distinguished by Haring’s designs with four different colorways to be released in the coming months.

The Keith Haring Glass Collection includes:

K.Haring x BiC© Lighter, $5
K.Haring Taster, $30
K.Haring Tray, $60
K.Haring Dog Bat Catchall, $60
K.Haring Bat Man Catchall, $60
K.Haring Angel Catchall, $60
K.Haring Spoon, $50
K.Haring Bubbler, $120
K.Haring Rig, $180
K.Haring Water Pipe, $220

Kadey said he has since been inundated with other artists wanting a similar brand launch, but for now, he is being very selective. “We are looking forward to offering this sophisticated glassware collection to Higher Standards customers both in stores and online as we continue to grow our house of brands and expand our direct to consumer business, offering innovative designs and products to consumers across the U.S.”



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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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