Kaitlin Domangue, Author at Green Market Report - Page 2 of 6

Kaitlin DomangueKaitlin DomangueFebruary 5, 2020
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3min2840

It’s time for your Daily Hit of cannabis financial news for February 5th, 2020. 

On the Site

Business Strategy For Psychedelic Companies

The Green Market Report hosted its first conference on Psychedelic Investing in New York City on January 24. This panel was titled “Business Strategy For Psychedelic Companies.

Journalist Jeremy Berke of Business Insider moderated this panel.

Atai Life Science CEO, Florian Brand, was on the panel along with Shlomi Raz, the founder of Eleusis. The two were joined by Dr. Terry Kelly, the CEO of Perception Neurosciences.

Tilray Restructures, Cuts Workforce, Stock Rises

Canadian cannabis producer Tilray (NASDAQ: TRLY) said it was restructuring and cutting roughly 10% of its workforce. The stock was moving almost 2% higher on the news in pre-market trading to $18.50.

“By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry, which will drive value for our investor and employee shareholders,” said Chief Executive Brendan Kennedy in a statement.

74% of CBD Buyers Own Pets

A new industry report from Nielsen (NYSE: NLSN) and cannabis data provider Headset has highlighted the impact of hemp-based cannabidiol (CBD) on the U.S. pet care market. According to the 2020 Pet Industry Green Paper by Nielsen and Headset, hemp-based CBD pet products will represent 3-5% of all hemp CBD sales within the U.S. by 2025.

Key takeaways:

  • Pet products have logged over $9.4 million in sales at regulated adult-use cannabis retailers in California, Colorado, Nevada, and Washington combined (Q1 2018 through Q3 2019).
  • To date, 24% of pet owners use hemp-CBD either for themselves, their pet(s), or for both.

In Other News

Aurora Cannabis to Cut Workforce By 10%

Cannabis company Aurora has announced they are cutting their workforce by 10%. Shares are down 1% after hours. This comes right after the announcement of Tilray’s plans to also cut their workforce by 10%.


Kaitlin DomangueKaitlin DomangueFebruary 4, 2020
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5min4550

Many cannabis businesses are struggling to stay afloat, and it’s not because people aren’t interested in the industry. 

Due to the federal status of cannabis, businesses in the cannabis space are subject to different regulations than traditional businesses in the United States. One of the key factors responsible for the current state of affairs is Section 280E in the tax codes. 

Green Wave Advisors has released a new report explaining the impact of the federal prohibition on cannabis businesses. Since many multistate operators (MSO)’s have gone public, the companies are including financial disclosures explaining the influence of 280E. 

This tax code prevents those “trafficking” federally illegal substances from claiming business-related deductions on their taxes, and unfortunately at this time that includes cannabis, even if the business is operating legally at the state level. 

However, businesses are able to deduct the Cost of Goods associated with operating their business on their taxes. This is not an easy thing to prove, however, and can be costly to do so. This is not the only workaround 280E, but the others present similar challenges. 

Green Wave Advisors limited its scope to those businesses with a market cap of greater than $500M with the exception of MedMen Holdings Inc. (OTC: MMNFF). The report found that only three businesses it vetted turned a profit at the end of 2018’s fiscal year. 

Cresco Labs (OTC: CRLBF), Green Thumb Industries Inc. (OTC: GTBIF), and Trulieve Cannabis Corp. (OTC: TCNNF) were found to be those that were profitable, with tax provisions of $4.4M, $8.6M, and $28.8M respectively and income losses of $7.5M, $28.6M, and $71.7M. The three companies paid tax rates of 59%, 30%, and 40%. 

The remaining companies operated at a net loss in FYE 2018 and quantified a rough estimate of potential tax credits if Section 280E were not in place. 

Acreage Holdings (ACRG.U), Columbia Care (CCHWF), CuraLeaf (CURLF), Harvest Health & Recreation (HRVSF), and MedMen showed an estimated NOL tax credit loss of $13M, $8.3M, $11.8M, $14.7M, and $55.3M respectively.

“While regulatory uncertainty continues to loom, current valuations may provide an attractive risk/reward profile for investors with an undefined time horizon, able to “sit” patiently until federal laws are modified,” said Matt Karnes, the founder of Green Wave. “When the added costs of prohibition are no longer necessary, businesses will be better
able to generate meaningful free cash flows, become less dependent upon outside sources of capital
and ultimately garner higher valuations, in our view.” 

For the first nine months of 2019, the story is painted a bit differently as all mentioned MSOs incurred losses with the exception of Trulieve which has earned a profit due to an unrealized gain which was associated with the change in fair value of its biological assets. If Trulieve did not have this gain, it would also be in the red. 

As displayed, Section 280E is causing a fair amount of issues for cannabis companies. Other roadblocks for these companies include the limited access to traditional banking as well as the illicit market continuing to thrive. 

Green Wave Advisors believe that these problems will continue as long as restrictions are imposed and/or recreational cannabis use is legalized. 

Karnes added, “We believe losses in some markets will continue until restrictions are further eased and/or recreational use is legalized. A good example is New York State, and in particular, Manhattan, in which medical marijuana licenses are highly coveted. With limitations on allowable form factors (among other challenges) and high operating costs, these storefronts are likely losing money but the silver lining remains in the conversion to recreational use.”


Kaitlin DomangueKaitlin DomangueJanuary 30, 2020
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5min3110

It’s time for your Daily Hit of cannabis financial news for January 30th, 2020.

On the Site

CLS Nevada Projects 2020 Revenue Of $17 Million

CLS Holdings USA, Inc (OTCQB: CLSH)(CSE: CLSH) released its 2019 calendar year-end statement for CLS Nevada, not long after the company reported its quarterly earnings on January 14. The company said in a statement that it was “forecasting CLS Nevada 2020 revenue of $17 million and positive EBITDA of $4 million.” The company will need to hustle if it wants to hit that $17 million goal. CLS said that it plans to increase sales by 100% at City Trees by eliminating low return on investment SKUs, re-branding and increasing visibility through better marketing channels. That includes expanding the  Oasis Cannabis parking lot and vault to allow it to efficiently serve 1250 customers a day. The company also wants to create new revenue streams by offering advertising opportunities to brands and partners.

High Times Tells Shareholders It Needs More Capital

It’s been a tumultuous two months for venerable cannabis publisher High Times following an equally bumpy road to going public. On Wednesday, Chairman Adam Levine sent a letter to shareholders of the private company stating that it would once again extend its fundraising campaign and abandon its efforts to list on the NASDAQ Marketsite Exchange (NASDAQ: NDAQ).

The latest extended offering will terminate on the first to occur of either the date on which all 4,545,454 shares are sold or March 31, 2020. These shares though are priced back at $11 with the goal of raising another $5 million. According to the most recent corporate presentation, High Times had 32,460, 313 issued shares and if all were valued at $11, that is a $357 million market cap. The company’s current total liabilities are $68 million.

The First Historically Black College Is Launching A CBD Line

The Southern University Agricultural Research and Extension Center in Baton Rouge, Louisiana, along with its partner Ilera Holistic Healthcare is launching a CBD product line called ALAFIA. Southern is the first HBCU (Historically Black College University) to start its own CBD product line that is available for sale at dispensaries and other retail locations.

“Southern has been a leader in agriculture and the sciences for 140 years while staying true to its mission of access,” said Ray Belton, the president of the Southern University System. “This CBD venture with Ilera encompasses all of that.”

Hemp Glut Causing Prices To Drop, Unsold Harvests

Hemp Benchmarks report for January was published on Wednesday at the Hemp Benchmarks website. Founder Jonathan Rubin noted that wholesale hemp markets continue to face significant challenges, including oversupply and declining prices.

The report stated, “We have in previous reports emphasized the current glut of biomass on the market, which has led to farmers being unable to move their harvests. Such market conditions continued in January, with numerous members of our Price Contributor Network reporting that relatively little buying and selling of biomass was taking place. Transactions that were reported showed high-CBD biomass prices continuing to sink, with the assessed rate for transactions of over 1 million pounds down 53% from last month.

In Other News

Two Kentucky Hemp Companies Facing Bankruptcy 

Two companies are facing financial trouble as GenCanna has had three separate creditors try and force the company to declare bankruptcy. The three creditors are owed $50,000 collectively. Separately, Sunstrand owner William “Trey” Riddle filed for Chapter 7 bankruptcy in a Louisville court. 

A creditors’ meeting is scheduled for February 6th in Louisville, KY. 


Kaitlin DomangueKaitlin DomangueJanuary 29, 2020
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4min3730

It’s time for your Daily Hit of cannabis financial news for January 29th, 2020. 

On the Site

Top 10 Most Influential Communication Professionals To Watch In Cannabis 2020

Green Market Report compiled a list of the 10 most influential communication professionals in cannabis to keep an eye on. The list is Daniel Yi, Chief Communications Officer at Shryne Group Inc., Rosie Mattio Founder & CEO of Mattio Communications, Jason Erkes, Chief Communications Officer at Cresco Labs, Gia Moron, Founder and CEO of GVM Communications, Inc, Linda Marsicano, VP Corporate Communications at Green Thumb Industries, Alex Howe, Head Of Corporate Communications at Harvest Health & Recreation, Inc., Shawna Seldon Mcgregor, Founder & CEO of Maverick Public Relations, Lewis Goldberg, Managing Partner at KCSA Strategic Communications, Evan Nison, Founder & CEO of Nison Co., Heidi Haller Groshelle, Founder & CEO of Groshelle Communications

EcoGen Closes on $40 Million Private Placement

US-based company, EcoGen Labs, is continuing to expand and grow as it successfully closes on a $40 financing arrangement through private placement. EcoGen has a solid strategy for the utilization of this transaction, the plans include supporting the further development of its facilities, focusing on its research and development, and the expansion of marketing and sales divisions.

Cuomo Plan for Social Equity Forgets Minorities

Governor Andrew Cuomo (NY) announced his plans to legalize cannabis for adult use in his state budget speech last week. If we look closely at the Cuomo cannabis plan there are red flags. According to Cuomo’s budget, “the program will limit the number of producers and retail dispensaries to guard against a market collapse.”

States that have limited licensing markets face serious product shortages, increased consumer cost, and greater startup expenses that ultimately keep illicit markets going. Fewer licenses at higher costs mean fewer entrepreneurs. In many markets the initial capital requirements are so high minority entrepreneurs can’t compete.

“Hot Plants” Prove Problematic for Hemp Entrepreneurs

Current  issues plaguing hemp producers in 2019 are coming to light, and industrial hemp poses a new challenge: how to bring a crop in under the .3% THC limit mandated by the federal government

A hemp plant can “go hot” (aka experience a spike in THC levels) due to using a new seed variety, environmental factors, or a plant left to flower for too long. This can lead to what the National Law Review article describes as “excessive non-compliance and crop destruction”, not to mention devastating financial losses for growers.

In Other News

Curaleaf Set to Open First Adult Use Cannabis Dispensary on Cape Cod, Massachusetts

Curaleaf Holdings, Inc. (CSE: CURA /OTCQX: CURLF) is going to be the first adult-use dispensary in Cape Cod, the facility is set to have its grand opening on February 6th, 2020.

“We are very excited to bring the first adult-use cannabis dispensary to Cape Cod. Provincetown is a vibrant community where we plan to hire over 30 people and become engaged with the cultural activities, charities and local initiatives that are important and make the Outer Cape and Provincetown so special,” said Patrik Jonsson, President of Curaleaf Massachusetts.

Driven Deliveries to Acquire Humboldt Heritage Inc.

Driven Deliveries has announced its decision to purchase Humboldt Heritage Inc., a cannabis company based in Northern California.

The acquisition is expected to add an additional $20M to the company’s 2020 revenue forecast.


Kaitlin DomangueKaitlin DomangueJanuary 29, 2020
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2min5130

US-based company, EcoGen Labs, is continuing to expand and grow as it successfully closes on a $40 financing arrangement through private placement. 

EcoGen Labs is a vertically-integrated, seed-to-sale manufacturer and supplier of specialty hemp-derived ingredients and proprietary formulas in the United States. The company also produces private-label finished product, as well as providing unique genetics.

Since its launch in 2016, the company has expanded rapidly, producing over $80 million in revenue last year. EcoGen supplies nearly 70% of the ingredients used in various retailers across the US, including Whole Foods, Sephora, and CVS Health Corp.

Alexis Korybut, the Co-Founder of EcoGen says “We are very encouraged by the strong support we’ve received from the institutional marketplace. This investment is an important step forward that will allow us to further grow and expand our business.”

EcoGen has a solid strategy for the utilization of this transaction, the plans include supporting the further development of its facilities, focusing on its research and development, and the expansion of marketing and sales divisions. Advancing the company’s seed and genetics, the expansion of private-label finished goods, and new technologies are also on the agenda for EcoGen.

“With engineering as a passion and also my background, the prospect of new innovation is what led me to this industry,” says Joseph Nunez, Co-Founder of EcoGen. “When we first started, we were on a mission to create a state-of-the-art process to produce exceptionally pure CBD that set the standard for the industry. We’re proud to say that goal was quickly achieved and this capital raise will allow us to expand that success into other verticals of the business.”

EcoGen also has plans to develop their new national headquarters on a nearly-20 acre property located in Grand Junction, Colorado. When development is complete it will include everything from seed production to the making of CBD products.


Kaitlin DomangueKaitlin DomangueJanuary 28, 2020
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2min3190

Its time for your Daily Hit of cannabis financial news for January 28th, 2020. 

 

On the Site

 

Emerald Using Shares to Pay Bills

Canadian cannabis company Emerald Health Therapeutics (TSXV: EMH; OTCQX: EMHTF) had entered into a shares for debt transaction with Emerald Health Sciences, a control person for the former company. Presently, Emerald carries an aggregate debt of $2,816,963. The company will settle $794,182 owed to Sciences, as well as $2,022,781 owed pursuant to trades payable. Emerald Health Therapeutics will also issue 9,713,666 common shares of Emerald to Sciences at $0.29 per share.

 

TerrAscend Names Ackerman as Interim CEO, Ends Gravitas Deal 

TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF) has named the company’s Executive Chairman Jason Ackerman as the interim CEO, replacing the current CEO Michael Nashat.

Just yesterday, TerrAscend terminated its decision to acquire Gravitas Nevada Ltd. which operates a retail cannabis dispensary in Las Vegas, Nevada under the trade name “The Apothecarium.”

 

2020 Promises Greener Pastures for Cannabis Legislation

More than 75% of the United States of America have legalized (and decriminalized) Cannabis use. Whether that use is in the form of CBD, restricted to medicinal use, or completely without consequence, America’s legislation is changing rapidly.

The new decade started with Illinois celebrating its June 2019 legalization victory and now, New Mexico is following suit. New Mexico’s governor is currently pushing legalization. US News reported on the turn of the decade, there is strong legislative evidence five more states are rolling toward legalization before 2020 comes to a close.

 

In Other News

Vireo Health Expands Partnership With Leaf Trade

Physician-led, science focused cannabis company Vireo Health (CNSX: VREO, OTCQX: VREOF) announced the expansion of the company’s partnership with Leaf Trade. The partnership will provide a wholesale order and fulfillment management platform in four states where Vireo operates.


Kaitlin DomangueKaitlin DomangueJanuary 28, 2020
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2min9310

Emerald Health Therapeutics (TSXV: EMH; OTCQX: EMHTF), referred to as “Emerald” for clarity, is a Canadian cannabis company offering wellness-oriented and recreational cannabis products. Emerald provided an update yesterday on their recently announced a shares for debt transaction with Emerald Health Sciences, (“Sciences”) a control person for Emerald. 

Presently, Emerald carries an aggregate debt of $2,816,963. Per a previously disclosed loan agreement between both parties, Emerald will settle $794,182 owed to Sciences, as well as $2,022,781 owed to Sciences pursuant to trades payable. Emerald Health Therapeutics will also issue 9,713,666 common shares of Emerald to Sciences at $0.29 per share in order to fulfill the debt.

Currently, Sciences holds roughly 29,687,942 of Emerald’s issued shares and upon the completion of the debt settlement, Sciences will hold approximately 23.1% of the issued and outstanding shares of Emerald, on an undiluted basis.

Due to Sciences being a control person of Emerald, the settlement is considered to be a “related party transaction”, meaning the companies had a pre-existing connection prior to the transaction.

Emerald is not the only company in a cash crunch, and relying on selling common shares to stay above water. MedMen has also been making the headlines for a similar situation. The company recently sent out emails to their vendors stating they cannot pay them, and are offering shares in their company instead.

Green Market Report talked to Adam Bierman, the CEO of MedMen, about their circumstances. Bierman tells us, “We’ve been very forthright with the public, and with our investment community at large about the fact that at the end of last year we entered into a restructuring in the business, exiting the hyper-growth stage of the business, and getting into sustainability, and with that, there’s a lot of pain. And that pain starts at the employees that were on this mission with us, building this platform with us that we had to part ways with.”


Kaitlin DomangueKaitlin DomangueJanuary 27, 2020
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4min2460

Its time for your Daily Hit of cannabis financial news for January 27th, 2020. 

On the Site

Troubles Continue For Sunniva, Company Announces Ceasing Operations Of Full-Scale Distributors, LLC

Sunniva (OTCMKTS: SNNVF), a Canadian cannabis company announced the closing of wholly-owned subsidiary Full Scale Distributors, LLC set to take place in February 2020. “The closing of FSD is a necessary step that will eliminate the cash outlay required to operate that business,” said Dr. Anthony Holler, Chairman & CEO of Sunniva Inc. “We continue to focus on the preservation of our available funds to allow us to actively defend Sunniva’s rights under the previously disclosed dispute related to the Build to Suit Lease of the Cathedral City Glasshouse.” The company cannot file for bankruptcy because of cannabis’s federally illegal status. 

The Year Ahead for CBD

Farmers experiencing demand and profit surges since converting their land for hemp cultivation were profiled in a CNN report in April that projected sales of hemp products to be over 2.2 billion dollars by 2022. Despite these positive projections, the hemp industry has experienced its share of problems, as outlined in an October article by Iris Dorbian for Forbes.com. These issues include a lack of widespread, scientifically sound information about the legality and benefits of CBD products, which often deters retailers from carrying hemp products. 

Though projections may vary, there do appear to be strong commonalities that provide a clarified, if not completely clear, view of what 2020 holds for the CBD/hemp industry.

Airvape X Review: A Modern Multi-function Device

The few minor flaws (battery life and chamber size) with the Airvape X are greatly outweighed by the many positive aspects of the vaporizer. The change from smoking to purely vaporizing has a noticeable impact on the health of your lungs. Strong rips, easy to clean, does not take long to charge, and we are happy campers over here.

When our own Airvape X unit dies out from our daily use then we plan to replace it with another considering how great it has been to have.

In Other News

Indiana’s Smokeable Hemp Ban Moves to Federal Appeals Court

Indiana initially passed the ban on smokeable hemp in July, but it was put on hold by a federal judge. The state is attempting to revive it and The Midwest Hemp Council and seven Indiana hemp wholesalers are challenging the state’s action. 


Kaitlin DomangueKaitlin DomangueJanuary 27, 2020
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3min8770

Sunniva (OTCMKTS: SNNVF), a Canadian cannabis company announced the closing of wholly-owned subsidiary Full-Scale Distributors, LLC set to take place in February 2020. 

“The closing of FSD is a necessary step that will eliminate the cash outlay required to operate that business,” said Dr. Anthony Holler, Chairman & CEO of Sunniva Inc. “We continue to focus on the preservation of our available funds to allow us to actively defend Sunniva’s rights under the previously disclosed dispute related to the Build to Suit Lease of the Cathedral City Glasshouse.”

Cannabis companies that are strapped for cash not have the option of filing for bankruptcy. According to bankrupt stock expert, Rick Szambel, “Currently under U.S. Bankruptcy Law companies that are engaged in a business or product not legal under Federal Law may not use the U.S. Bankruptcy Code for protection in reorganizing their debt or centralize their assets for sale. Federal Law considers marijuana an illegal substance and U.S. Trustee who is part of the Department of Justice has aggressively blocked companies in the marijuana industry, employees, and even landlords from filing Chapter 7 or 11, often forcing companies to wind down at a state level.”

This is not the first time the company has been in hot water. Last year, the company and one of its subsidiaries were named in a lawsuit for failure to repay a loan. Green Market Report previously reported “Sunniva, through its subsidiary 116, entered into a $3.4 million mortgage to finance the purchase of land for the greenhouse facility in Okanagan Falls, British Columbia,” according to the company’s November financial statement. Also included in the statement was the acknowledgment the company had paid $400,000 of their loan as of September 30th, 2019 but they were in default on the remaining balance. The company’s stock also fell significantly in November following the resignation of its CFO and president.


Kaitlin DomangueKaitlin DomangueJanuary 25, 2020
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2min4000

Innovative Industrial Properties, Inc. (NYSE:IIPR) has placed approximately 2,000,000 shares of common stock for public offering, representing roughly 22% of the shares outstanding.

The company’s plan for the revenue of the sale is to invest in specialized real estate assets. The assets are intended for cultivation and processing facilities for corporate use and in alignment with the company’s investment strategy.

The company placed the public offering of 2.967M common shares at $73.25/share. Gross proceeds will equate to $217.4M. Underwriters are expected to be offered a 30-day option to purchase up to an additional 300,000 shares of its common stock.

According to MarketWatch, since the announcement of the public offering, the REIT’s stock has dropped 4.5% in premarket trading, pricing 7.8% Thursday’s close of $79.45.

Key players in the offering include BTIG, LLC as sole-book running manager, BTIG, LLC is acting as sole book-running manager for the offering; Compass Point Research & Trading, LLC and Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. as co-lead managers, and Roth Capital Partners as a co-manager.

Innovative Industrial Properties, Inc. is an internally managed real estate investment trust. It is focused on the acquisition, ownership and management of specialized industrial properties leased to licensed medical-use cannabis facilities.



About Us

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


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