Staff, Author at Green Market Report - Page 2 of 91

StaffStaffNovember 20, 2020
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7min1080

Harvest Health & Recreation Inc. (OTCQX: HRVSF) said it has settled its dispute with a small group of the previous owners of Interurban Capital Group. The disagreement goes back to March when Harvest had agreed to pay $85.8 million through Harvest stock and the assumption of $19.1 million of debt convertible into 205,594 Multiple Voting Shares. Plus a payment of an additional $9.3 million upon exercise of a call option agreement to acquire controlling interests in five Washington cannabis dispensaries or alternatively $12.4 million to acquire substantially all of the assets of these dispensaries.

It wasn’t long before Harvest decided to sue ICG in April against the Washington dispensaries and a small group of the previous owners of ICG to enforce terms of service agreements and the call option agreements.

“We are pleased to settle this dispute and move forward,” said Chief Executive Officer Steve White. “We are very excited to continue to focus on our core business operations as we execute on our plan to return to profitability.”

Settlement Agreement

The settlement resulted in a mutually agreeable resolution for all parties. Harvest said it will cancel a total of 42,378.4 Multiple Voting Shares issued to the small group of previous owners of ICG (equivalent to 4,237,840 Subordinate Voting Shares on an as-converted basis). Harvest will also receive a $12 million secured promissory note with 7.5% interest and five-year maturity. The settlement includes cancellation of the service agreements and call option agreements for the Washington retail locations.

Back Story

ICG would have added to Harvest’s existing retail footprint with three open retail locations and seven potential retail licenses in California, five open retail locations in Washington state and two open retail locations in Iowa. The California locations were dispensaries called Have-A-Heart and trouble began almost immediately. The employees complained about layoffs to Marijuana Business Daily, and in April it was learned that Harvest was suing ICG. The company has since sold those properties, but the litigation remains.

ICG and its Washington partners are also fighting amongst themselves. Harvest Health wrote in its SEC filing that on May 28, 2020, ICG filed a complaint in the King County Superior Court against the Respondents and other members of the Washington Retailers and their wives alleging a breach of the Washington Entities Options collectively, by the “Washington Entities Sellers”, who sold the properties to Harvest Health. The case alleges a series of charges, including breach of contract and, engaging in unfair or deceptive acts or practices.

The filing stated: In April, Harvest Health filed a Notice of Intention to Arbitrate before the Judicial Dispute Resolution, LLC in Seattle, Washington against Boyden Investment Group, LLC; Tierra Real Estate Group, LLC; Have A Heart Compassion Care, Inc.; Phat Sacks Corp.; Green Outfitters, LLC (collectively, the “Washington Entities”) and Ryan Kunkel (“Kunkel”, together with the Washington Entities, the “Respondents”) to compel mandatory arbitration for breach of contract, engaging in unfair or deceptive acts or practices in the conduct of the Respondents trade or commerce and affects the public interest, tortious interference with contractual relationships, and awards of damages, treble damages, and fees and costs.

Ryan Kunkel is a former officer, director and shareholder of ICG and manager and equity holder in the Washington Entities. The Arbitration relates to Amended and Restated Services Agreements entered into between ICG and the Washington Entities pursuant to which they agreed to pay ICG fees for services it provides to them (the “Service Agreements”). On
April 2, 2020, the Respondents filed a motion for temporary restraining order in the Superior Court for the State of Washington, in and for the County of King, seeking access to certain records and accounts related to the operation of the Washington Entities’ business. On April 7, 2020, the court denied the motion in the TRO Action and found, among other things, that the Retailers failed to show (i) they were likely to prevail on their claim that ICG breached the Service Agreements, (ii) a clear legal or equitable right to the relief sought, (iii) an invasion of their rights, and (iv) they would suffer an actual and substantial injury.

On April 8, 2020, the Respondents filed a motion for dismissal of the TRO Action and the case has been dismissed. In a separate lawsuit, ICG filed a petition for provisional remedies in aid of arbitration against each of the Washington Entities seeking prejudgment writs of attachment as a result of the Respondents’ conduct related to the termination of the Service Agreements (the “Provisional Remedies Action”). Following consolidation of the Receiver Action and the Provisional Remedies Action before the Superior Court, the case was dismissed on May 21, 2020 because the court ruled it lacked jurisdiction as a result of the appointment of an arbitrator in the Arbitration. In dismissing the Provisional Remedies Action, the Superior Court noted that the arbitrator should make the decision on ICG’s petitions for provisional remedies. The Arbitration is in the pleading stage of litigation, no discovery has commenced and no substantive rulings have been made other than the TRO Order.

 


StaffStaffNovember 20, 2020
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6min3821

Editors Note: This is a guest post.

Medical marijuana dispensaries are a vastly different business from recreational dispensaries. Most states have much more stringent licensing requirements for medical dispensaries, and dispensary staff requires more training and knowledge than the average recreational budtender. Yet, despite the extra hurdles required of medical marijuana dispensary owners, there are more markets where medical marijuana is permitted, giving greater opportunities to entrepreneurs in the medicinal space.

Whether you are interested in opening a medical marijuana shop of your own or are merely curious about the best places for medical marijuana shop owners, read on.

California

California is the largest and most populous state where marijuana has been legalized for recreational use, and it is the state with the longest-lived medical marijuana program. Both recreational and medicinal dispensaries have generated several billions of dollars in sales, despite fighting a booming black market. Because taxes for recreational weed are exorbitant and driving many adult recreational users away, entrepreneurs in this state should seriously consider starting with a medicinal shop, which is subject to lower fees and taxes. Even better, there are many counties and municipalities that have banned recreational marijuana businesses but permit medical marijuana use, so entrepreneurs in this space have greater access to less saturated markets.

Arizona

Arizona is poised to pass recreational marijuana regulations, which means the state is on the verge of a major uptick in cannabis interest. Already, marijuana use has been on the rise in the state, with medical marijuana sales growing significantly in every year since 2016. Greater acceptance of all cannabis use throughout the state will undoubtedly drive patients toward medicinal marijuana, especially within the next few years. Both recreational and medicinal dispensary licenses are available to entrepreneurs interested in capitalizing on a market yet to see serious competition.

Oklahoma

Oklahoma boasts one of the more fascinating medical marijuana programs in the country. Unlike other states, where patients must suffer from one (or more) qualifying health conditions, Oklahoma allows patients to work with their doctors to determine whether marijuana might be a viable solution to their health concern. As a result, it is much easier to get medical marijuana in Oklahoma — which means the medical marijuana industry in the state is booming. Though the market is smaller than in states like California and Oregon, Oklahoma’s medical marijuana industry is booming, and there aren’t nearly enough dispensaries to keep up with demand.

Alaska

Though sparsely populated, remarkably rural and quite conservative in its politics, Alaska has enjoyed a long and generally positive relationship with the good green herb. Technically, the state was the first to legalize recreational marijuana — way back in 1975 — but a few complications thwarted recreational sales until 2014. Currently, the medical and recreational marijuana industries in Alaska are earning hundreds of millions of dollars per year, and considering that marijuana tourism in the state is also popular, there is plenty of promise for entrepreneurs in this area. However, it might be worth noting that while dispensaries do good business, growers in Alaska are in particularly high demand. Starting a grow op and running a partnered shop might be a lucrative model to ensure enough supply of medicinal-quality goods.

Oregon

Though Oregon wasn’t the first state to pass any marijuana legalization, it has quickly become the nation’s posterchild of how marijuana regulation can go incredibly right. Oregon’s marijuana industry is perhaps the booming-est, generating record-breaking incomes for almost every month in 2020. Not only is the state’s dominant culture incredibly weed-friendly, but Oregon borders three states with remarkably strict marijuana laws and attracts millions of marijuana tourists every year. What’s more, Oregon weed growers are currently producing more bud than current dispensaries can manage, so there is plenty of space for entrepreneurs to hang their shingle and thrive. Plus, fees and taxes are much lower for Oregon cannabis business owners than they are in other states. If you can’t get ahold of a license, you should be able to find a licensed business for sale.

Even as recreational marijuana laws are enacted in more states, medical marijuana businesses will continue to be valuable and thrive. The sooner you open your medicinal weed shop, the sooner your establishment can see success.

 


StaffStaffNovember 19, 2020
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4min3150

Slang Worldwide Inc. (OTCQB: SLGWF) reported preliminary, unaudited financial results for the third quarter ending September 30, 2020. with revenue rising 73% to $7.9 million. The company said that the primary driver of sequential growth was a rebound in demand in its core markets of Colorado and Oregon, following the COVID-related shutdowns in the second quarter. Similar strength in the company’s emerging markets also contributed to sequential growth, as did the successful launch of new products.

“I am proud of the way our company has responded to the pressures we faced in the first half of the year,” said SLANG President & CEO Chris Driessen. “In the third quarter, we capitalized on rapidly evolving market conditions while also reducing costs, leading to significant improvements in both revenue and EBITDA. I am particularly pleased with how we are tracking in regards to profitability and expect even greater momentum to build in subsequent quarters as our acquisitions close and we begin to recognize both revenue and profit from plant-touching operations.”

Slang also noted that its adjusted EBITDA of $57,000 was positive for the first time since it became a public company and represented an improvement over a loss of $1.6 million in the third quarter of 2019 and a loss of $1.8 million in the second quarter. Cost reductions from streamlining activities at Slang and within the Slang Network have resulted in approximately $10.5 million of annualized cost savings. The company said it expects to file complete financial results for the third quarter of 2020 on the morning of November 30, 2020.

In October, Slang announced a strategic partnership to introduce its branded products in California with Natura. Natura was given an exclusive license to produce and distribute the Slang product suite in California, including its category-leading brands O.penVAPE, Firefly, Pressies, District Edibles, and Bakked. Slang will also provide sales consulting services and will receive royalty payments for each branded product sold in the state.

“California presents the perfect opportunity for us to lean into our emerging markets model. By partnering with a best-in-class operator like Natura, we are confident that we will be positioned for long-term growth and success within the Golden State,” said Driessen. “Our brand District Edibles was at one point the top-selling gummy product in California and represented nearly $2 million dollars per month in retail revenue at its peak. We expect to achieve similar success across all SLANG brands as a result of this new partnership.”

Also in October, Slang launched a new concentrate product called the Gyro. It’s the latest addition to the Bakked product line and is billed as the first spill-proof, gyroscopic container for live resin concentrates used for dabbing. “The Gyro innovates the way that cannabis consumers who prefer to dab transport their extracts. Because the Gyro is always right side up, dabbers never have to worry about spilling their costly extracts. The Gyro is designed to withstand shaking, tossing and even dropping, all without any spills.”

“The Gyro makes dabbing simpler and more convenient so that our customers can enjoy their dabbing experience,” said Driessen. “Full credit goes to the SLANG product team for once again developing an innovative product that is truly unique in the cannabis CPG space. The Gyro marks our third product in the hydrocarbon extract space, with more on the way.”


StaffStaffNovember 17, 2020
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8min890

Cannabis e-commerce company Dutchie,  has launched  “Dutchie Plus,” a fully customizable online shopping experience. Dutchie Plus will allow dispensaries to create seamless online shopping experiences through open APIs and powerful back-end tools, including access to deep analytical data to drive sales and a messaging platform to connect directly with customers. Dutchie’s latest solution extends its innovative product suite to meet the needs of large dispensaries and multi-state operators (MSOs).

“The cannabis industry is one of the fastest-growing in the world, yet even the largest businesses are still fighting with one hand behind their back with outdated technology tools,” said Zach Lipson, CPO, and Co-founder at Dutchie. “For the first time ever, dispensaries will now have full control over their online presence down to every line of code and design choice without limitations to give consumers a completely unique, seamless experience. By giving businesses this unprecedented level of customization, Dutchie Plus brings our vision to redefine the modern cannabis consumer experience to life.”

Dutchie processes 10% of all legal cannabis sales worldwide, and powers 25 percent of all legal dispensaries across 30 markets and 301 cities in the United States and Canada. Dutchie recently announced its $35M Series B funding round from investors including Snoop Dogg’s Casa Verde Capital, Kevin Durant’s Thirty Five Ventures, Thrive Capital, Gron Ventures, and Former Starbucks Chairman and CEO, Howard Schultz, bringing its total funding to $53M to date. The investment will continue to drive team growth, assist with expansion into new markets, and launch major product developments to support cannabis dispensaries while meeting consumer demand and expectations across North America. Dutchie was also recently named one of LinkedIn’sTop 50 Startups 2020,” reflecting its market leadership and exponential trajectory in just three years since its founding. To learn more, visit: https://dutchie.com/home.

According to IBM’s U.S. Retail Index, the COVID-19 pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. The cannabis industry is one of the fastest-growing in the world with the global cannabis market expected to reach $73.6 billion by 2027. Yet even the largest dispensaries and MSOs are currently unable to create fully customized online shopping experiences with the current tools on the market. Dutchie’s latest enterprise-level offering is a breakthrough for the industry, giving dispensaries the tools and expertise afforded to other mainstream industries to ensure their brand is represented on their terms, effectively navigate changes in the market, increase their bottom line, and retain more customers.

“Cookies has a discerning fan base that collectively demands and deserves world-class experiences, paired, of course, with the dankest bud on Earth. Dutchie Plus enables us to bring our polish and magic to digital, where innovation is sorely needed in the cannabis space,” said Sam Gammon, Director of Technology at Cookies, a preeminent international cannabis lifestyle brand. “We’re beyond excited to realize a truly seamless digital expression of cannabis commerce, and these new tools will allow us to channel our creativity without limitation. Technology and cannabis can be powerful equalizing forces, and Dutchie Plus is a big step toward something truly fresh and new that works great for operators while meeting customers where they are: the free and open internet.”

 

 


StaffStaffNovember 16, 2020
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5min860

It’s time for your Daily Hit of cannabis financial news for November 16, 2020.

On The Site

Neptune Wellness

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) reported revenue increased 155%  sequentially to $28 million for the second quarter ending September 30, 2020.  Revenues in the first quarter were restated to $11.2 million. It was a big jump over last year’s total revenues of $6 million for the 2019 second quarter. The stock was jumping over 15% in after hours trading to sell near $2.18.

The company delivered a net loss $21 million slightly more than last year’s net loss of $20 million. All figures are canadian dollars unless otherwise stated.

MediPharm Labs

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF)  announced its revenues fell to $4.9 million for the third quarter ending September 30, 2020, versus $13.9 million for the second quarter of 2020. This was a massive decline from last year’s revenue of $43 million for the same time period. The company also delivered a net loss before tax of $15.4 million, compared to a net income of $5.3 million for last year’s third quarter. It also increased sequentially from a loss of $3.7 million in the second quarter.

Strimo

Before there was the iPhone, there was the Blackberry. Everyone who was anyone had a Blackberry. It was a status symbol and a very functional piece of technology. It was also groundbreaking until it wasn’t. First-generation technology has its place as a pioneer, but it’s the next generation that is typically a better consumer experience.

Cannabis tech company Strimo is a textbook example of next-generation software that is better than its predecessors. CEO Helkin Berg learned that many cannabis companies were unhappy with the existing first-generation software options on the market. In the early days of the cannabis industry, Berg says the pioneers were creating frankensoftware to address the industry’s specific compliance requirements. “Seed-to-sale” didn’t exist before legal cannabis came along. So the pioneers were tasked with creating a new product in a short amount of time. This cobbled-together software, while somewhat functional, was in Helkin’s mind, flawed.

In Other News

AQSP

Acquired Sales Corp. (OTCQB: AQSP) announced that it achieved third quarter net revenue and positive net income of $1,509,437 and $95,823, respectively. Third quarter net revenue exceeded second quarter net revenue by 19%, and the company expects its fourth quarter net revenue to continue to grow.

Nicholas S. Warrender, AQSP’s COO and the CEO of its wholly-owned subsidiary Lifted Made, Zion, IL, said, “So far this quarter, Lifted Made’s sales are surging. Under Lifted Made’s flagship Urb Finest Flowers brand, our delta 8 THC cartridges and gummies, CBD moon rocks, caviar cones, and our private label products are experiencing a tremendous reception from our distributors and customers. We are also developing new and exciting SKUs that are launching throughout the rest of this year and early Q1 2021 that we expect will be picked up by our existing and growing distribution channels throughout the country.”

Captor Capital

Captor Capital Corp. (CSE: CPTR) announced its common shares will no longer be traded through the facilities of the OTC in the United States. The U.S. Securities and Exchange Commission has revoked the registration of the Company’s securities under Section 12(j) of the Securities Exchange Act of 1934 for not filing continuous disclosure documents.  Captor remains a reporting issuer in good standing in each of British Columbia, Alberta and Ontario, and its common shares remain listed for trading on the Canadian Securities Exchange under the symbol CPTR.

 


StaffStaffNovember 16, 2020
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7min1520

Editors Note: This is a guest post.

CBD products have become incredibly popular thanks to new legislation legalizing hemp-derived products with minimal THC content. The popularity of CBD is also attributable to the number of people experiencing benefits from it; CBD is being used to alleviate anxiety, help people sleep, and give people a deeper sense of wellness and relaxation.

But what does the future hold for this industry? Is CBD just a fad, or will it continue growing in popularity? And how will innovators direct the development of this market?

Product Innovation

First, let’s take a look at the area of product innovation. Already, there is a wide range of different CBD products available for consumers to try. You can buy and smoke CBD flower, just as you can buy and smoke weed, but most people prefer a different delivery system due to concerns about smoke and lung health. 

Instead, many people are turning to full spectrum CBD oil, an extract designed to provide you with a full spectrum of different cannabinoids (except THC, of course), in a much cleaner, more efficient delivery system. We’re also seeing the development and circulation of topical forms of CBD, including creams, and CBD cartridges for vaporizers.

In the future, we’ll likely see an even wider range of products that contain CBD. Already, we’re seeing hints of what’s to come. For example, there are gummies and other edibles that contain CBD being sold by food manufacturers. There are also some restaurants offering signature dishes cooked with CBD oil. Over time, as extracts become more concentrated and new forms of CBD delivery become discovered, we’ll see an even more diverse range of options for consumers.  

Consumer Demand

Consumer demand for CBD is unlikely to let up anytime soon. After becoming legalized, there was an understandable surge in demand due to the novelty of the substance. Some experts suggested that this would be short-lived; once people got over the newness of the substance, they would move onto something else.

But the numbers suggest something different. The market for CBD in 2020 is $967.2 million, but it’s projected to grow to $5.3 billion by 2025. There are many reasons why this growth trend will likely continue.

For starters, people who try CBD and like it tend to keep buying it. They discover the benefits, and don’t want to lose them. It’s not a fad for them; it’s a source of relief. Additionally, the benefits of CBD are still being discovered; new studies are constantly emerging to suggest new benefits from the substance, or to reinforce already existing ideas about how it works.

Consumer acceptance is also likely to grow. While some people were excited to try something new when it became legalized, CBD still carries a stigma among some circles, due to its association with marijuana, which is still illegal at the federal level. In time, negative perceptions will likely decline, and more people will be willing to try this substance for their own personal benefit.

Regulation

While the 2018 Farm Bill allowed hemp-derived products to be sold legally, this isn’t the end of the line in terms of regulation. In the future, the FDA and other governmental bodies may step in to more heavily regulate the manufacture, advertisement, and sale of CBD products. This is an area of much uncertainty since it’s unclear how or when the government may intervene.

Right now, there are minimal regulations for how hemp is grown and tracked. Companies are making bold claims about the health benefits of CBD, despite much of the research being new and limited in capacity. And some products, such as extracts, are hard to control in terms of potency and consistency. Increased regulation could make it more difficult for new companies to enter the space, and could cause headaches for companies that are trying to innovate and serve more consumers.

Increased Competition

No matter what, we’re likely going to see more competition in the CBD space. The CBD market has already proven itself to be a lucrative one, and it’s only going to grow in the future. Thousands of businesses are competing to become a top name in the CBD world, and entrepreneurs are coming up with new ways to help themselves stand out from the crowd.

This will have a cascade of different effects on the market. It will introduce more novel products. It will lower prices for consumers. It will bring more attention to the industry. And it will make it harder to be a business owner in the space.

The future of CBD products is somewhat uncertain, given the potential for further regulation. However, the CBD market is consistently growing, and will likely continue to grow for the foreseeable future. New CBD products will inevitably follow that demand. 

 


StaffStaffNovember 12, 2020
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4min730

Cannabis technology company Akerna (Nasdaq: KERN) announced financial results for its quarter ending September 30, 2020 with revenue rising 16% to $3.7 million over last year’s $3.1 million for the same time period. Akerna missed the Yahoo Finance average analyst estimate for revenue of $4.49 million.

The net losses jumped to $4.7 million over last year’s net loss of $2.3 million. The net loss per share was ($0.34), which missed the Yahoo Finance average analyst estimate of ($0.28).

“I’m thrilled to report we achieved 40% year-over-year software revenue growth in this quarter and have increased our total SaaS ARR by 44% over this same time last year,” said Jessica Billingsley, CEO of Akerna. “Looking forward, we are entering a period of massive market expansion.  Five new states have approved cannabis via ballot measure in the recent election potentially representing approximately $18M in new TAM for our software and services offerings, and many more states and countries have legislative initiatives proposed over the coming months. Our scaled ecosystem is uniquely positioned to capture these opportunities, with the most robust cannabis technology suite available.”

The company reported that its adjusted EBITDA was ($3.0 million), compared to ($2.2 million) for the period ending September 30, 2019. Cash was $14.3 million as of September 30, 2020

In a statement the company highlighted that its average new MJ Platform orders were up 94% year over year, MJ Platform transaction volume was up 181% year over year, retail order volume rose 68% year over year and retail order values were up 127% year over year. The company said it had a new bookings ARR of $1.2 million.

Akerna recently closed on a $12 million offering which the company said it intended to use for funding its growth initiatives, including product development, sales and marketing, strategic acquisitions, working capital, and general corporate purposes. At the time, investors were upset and the stock sold off. However, the shares began to rally again at the beginning of November, but this earnings miss has caused the shares to be trimmed in price again.


StaffStaffNovember 11, 2020
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3min840

Aleafia Health Inc. (OTC: ALEAF) reported its financial results for the quarter ending September 30, 2020, with net revenue of $4.9 million and revenues were flat from the quarter ending in 2019. The company delivered a net loss of $19.7 million versus a positive net income of $1.9 million and a loss of $29.8 million, in the same periods in the prior year. The net loss was attributed to a non-cash $14.3 million adjustment of saleable inventory to net realizable value during the quarter, to reflect a significant decline in cannabis wholesale prices.

“We expect to have our strongest quarter to date in Q4 2020 as we progress towards significant sequential growth in medical, adult-use, wholesale and international cannabis sales. The strategic path we’ve executed upon, from building out facilities, to receiving three major licenses in 2020, to formulating new products, is now bearing fruit. With the introduction of vape cartridges, sublingual strips, and with many more launches to come, the commercialization of our business at scale is truly in full swing,” said Aleafia Health CEO Geoffrey Benic.

The company was more intent on telling investors that the revenue was set to improve. Aleafia said it had contracted sales that would generate net revenue of $16 million. It said it is expected that the majority of the domestic wholesale shipments will be completed in the three months ended December 31, 2020, with the remainder shipping to customers early in the first quarter of 2021. In addition to the $16 million in cannabis sales Aleafia said it also expects to see significant growth in the adult-use and medical channels. With incremental revenue generated by new product launches, and a 32% sequential increase in active, registered patients during the third quarter, the company said it expects to report record medical cannabis net revenue during the fourth quarter, along with strong growth in adult-use revenue.

Benic added, “With respect to the most recent quarter, the successful sale of our entire 2019 outdoor crop was completed earlier in the year, which led to a significant sequential decline in cannabis revenue, due to lack of available product. This was coupled with a number of significant product launches that only began generating revenue following the end of the reporting period.”


StaffStaffNovember 9, 2020
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9min900

It’s time for your Daily Hit of cannabis news for November 9, 2020

On the Site

Canopy Growth

Canopy Growth Corporation (NYSE: CGC) reported net revenue of $135.3 million for the second quarter fiscal 2021 ended September 30, 2020, causing the stock to jump in early trading. This was a 77% increase over last year’s fiscal second-quarter revenue of $76.6 million. Still, Canopy delivered a net loss of $96.6 million versus last year’s net income of $242 million for the same time period.

The company also reported a loss per share of ($0.09) which beat the MarketWatch estimate for a loss of ($0.28). The stock was lately trading at $26, an increase of 13%. The company attributed the revenue growth to an increase in Canadian recreational revenue, continued strength in Storz & Bickel vaporizer sales and ThisWorks, and contribution from BioSteel, which was acquired in October 2019 . The net loss was driven by lower other income. Canopy also said that the increase versus the prior year period also benefited from favorable comparison, as Q2 2020 results included a $32.7 million charge for returns, return provisions, and pricing allowances primarily related to restructuring the company’s recreational softgel & oil portfolio.

Tilray

Tilray, Inc. (Nasdaq: TLRY) reported that its total revenue for the third quarter was flat at $51.4 million and up 2.0% sequentially. Net losses fell to  $(2.3) million versus last year’s net loss of $(36.4) million and fell sequentially from $(81.7) million in the second quarter. The most significant driver of the change in net loss during the period was the revaluation of the outstanding warrants associated with the equity offering completed in March. Tilray stock was slightly higher in after-hours trading.

The company attributed the disappointing results on the discontinuation of bulk sales and a slight decrease in Canada medical sales which caused cannabis segment revenue to fall by 11% to $31.4 million. Total cannabis kilogram equivalents sold decreased 53% to 5,107 kilograms from 10,848 kilograms in the prior year’s third quarter. Adult-Use and International Medical sales grew 26% and 42%, respectively. Excluding the year-over-year impact related to bulk sales, total cannabis revenue increased by 24%. Hemp segment revenue increased 28% to $20.0 million (C$26.5 million).

Aurora Cannabis

Canadian-based cannabis company, Aurora Cannabis (NYSE: ACB) reported their Q1 earnings this morning. The results were mixed at best, with shares rising 21% on the potential for cannabis legalization under a Biden administration. Unless otherwise stated, these figures are in Canadian dollars. 

The company’s adjusted gross margin before fair value adjustments on total cannabis net revenue didn’t waver much quarter to quarter, with Aurora Cannabis reporting a 48% adjusted gross margin compared to 50% in Q4 2020. Before fair value adjustments, the company’s adjusted gross margin on cannabis net revenue was 52%. 

Canopy Rivers

Canopy Rivers Inc. (OTC: CNPOF) today released its unaudited condensed interim consolidated financial statements in Canadian dollars and acknowledged taking a $112 million hit for its PharmHouse investment.  The total comprehensive loss for the quarter was $87.0 million. On a positive note, its investment into TerrAscend has appreciated implying an investment value of $214 million.

The company reported that its royalty, interest, and lease income (before provisions for credit losses) was $4.1 million for the quarter. It included income from its various royalty, convertible debenture, and loan agreements, among other items. Other comprehensive income was $23.4 million, net of tax, for the quarter, which included a net increase in the fair value of financial assets of $27.4 million attributed to the positive change in the fair value of the investment in TerrAscend. TerrAscend’s share value increase from $2.87 on June 30, 2020, to $9.75 as of the close of markets on November 6, 2020.

Zynerba

Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE) reported a net loss of $9 million for the third quarter ending September 30, 2020, with a basic and diluted net loss per share of $(0.31). This beat the Yahoo Finance average analyst estimate for a loss of ($0.43). Six analysts have a Hold rating on the company, while two give it a Buy rating. The company still does not have a revenue-producing drug, but Zynerba said it has enough money until that time comes.

Planet 13

Planet 13 (CSE:PLTH) (OTCQX:PLNHF) is potentially one of the most well-known dispensaries around. They are incredibly innovative, massive in size, and just all around at the top of the dispensary game. Planet 13 is even more special because currently, they’re only located in Las Vegas, Nevada. For having operations in only one state, they sure do gain a ton of attention!

The cannabis megastore just announced their third consecutive month of generating over $7.5 million in revenue. The company’s October revenue clocked out at $7.6 million, with gross margins above 50%. Planet 13’s figures include sales for the SuperStore, as well as Nevada wholesale. 

In Other News

Schultze Special Purpose Acquisition Corp. (NASDAQ: SAMA, SAMAW, and SAMAU) and Clever Leaves International Inc. announced today that they have amended their definitive agreement, which was entered into on July 25, 2020 and is anticipated to become a NASDAQ-listed public company trading under the ticker symbol “CLVR”.

 Under the amended terms, the initial expected enterprise value has been reduced to $206 million from $255 million and the minimum cash condition for SAMA has been reduced to $26 million from $60 million. Additionally, the cash consideration payable to certain Clever Leaves’ shareholders at closing has been amended, thereby increasing the equity rollover consideration of the transaction to approximately 97% while Schultze Special Purpose Acquisition Sponsor, LLC agreed to restructure its’ equity ownership to better align with the capital retained at closing. In connection with these revised terms, institutional investors have committed over $10 million through a private placement to be funded at closing of the Business Combination. Additionally, select SAMA stockholders have agreed not to redeem their shares held thereby providing a path to over $16 million of additional committed capital and thus having adequate capital to consummate the transaction. When including SAMA’s cash in trust, the parties expect to have over $80 million of cash on its balance sheet following closing.

 


StaffStaffNovember 9, 2020
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5min880

Zynerba Pharmaceuticals, Inc. (NASDAQ:ZYNE) reported a net loss of $9 million for the third quarter ending September 30, 2020, with a basic and diluted net loss per share of $(0.31). This beat the Yahoo Finance average analyst estimate for a loss of ($0.43). Six analysts have a Hold rating on the company, while two give it a Buy rating. The company still does not have a revenue-producing drug, but Zynerba said it has enough money until that time comes.

Research and development expenses for the third quarter of 2020 were $5.8 million, including stock-based compensation of $0.5 million. General and administrative expenses for the third quarter of 2020 were $3.4 million, including stock-based compensation expense of $0.7 million.   As of September 30, 2020, cash and cash equivalents were $64.3 million and the company said it believes that the current cash and cash equivalents are sufficient to fund operations and capital requirements until late in the fourth quarter of 2021.

“We made good clinical, operational and regulatory progress during the third quarter of 2020 including presenting new data from the pivotal CONNECT-FX and Phase 2 BRIGHT trials, and completing our discussions with the FDA to clarify our clinical path forward to late stage clinical trials in patients with certain developmental and epileptic encephalopathies,” said Armando Anido, Chairman and Chief Executive Officer of Zynerba. “The fourth quarter of this year is another important period for Zynerba. In particular, we look forward to announcing the results of our fourth quarter meeting with the FDA to discuss our pivotal CONNECT-FX results in patients with a fully methylated FMR1 gene and to understand the regulatory path forward.”

Fragile X

Zynerba said it expects to announce the outcome of its fourth-quarter meeting with the U.S. Food and Drug Administration (FDA) to discuss the CONNECT-FX Trial and the Regulatory path forward for Zygel in pediatric patients in the fourth quarter of 2020. This past summer the company disclosed that its latest top-line results from the 14-week pivotal CONNECT-FX (Clinical study of Cannabidiol (CBD) in Children and Adolescents with Fragile X) trial failed to produce the necessary threshold for positive results. However, the company went back to the drawing board and in October said, “Although the CONNECT-FX full analysis set did not achieve statistical significance in its endpoints, building on current scientific evidence, a pre-planned ad hoc analysis of patients having at least 90% methylation (“full methylation” or FMet) of the impacted FMR1 gene, representing 80% of the overall study population, was performed. The results, including the achievement of statistical significance (p=0.020) in the primary endpoint of improvement at 12 weeks of treatment in the Social Avoidance subscale of the ABC-CFXS compared to placebo, suggesting that Zygel may have benefit in patients with full methylation of the FMR1 gene.”

Autism

The company also reviewed its autism study saying that patients receiving Zygel in this study achieved statistically significant caregiver-reported improvements compared to baseline across all subscales of the Autism Impact Measure, which was designed to measure change in frequency and impact of core ASD symptoms: Atypical behavior (p<0.001), Communication (p<0.001), Peer Interaction (p<0.001), Repetitive Behavior (p<0.001), and Social Reciprocity (p=0.0053). In addition, statistically significant improvements compared to baseline were observed at week 14 of treatment with Zygel in the Autism Parenting Stress Index (p<0.0001). Zynerba also measured notable improvements in behaviors utilizing the Qualitative Caregiver Behavioral Problems Survey after 14 weeks of study drug. Clinically meaningful improvements were observed by a majority of surveyed caregivers in behavioral, social, and emotional behavioral problems.



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