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StaffStaffDecember 2, 2019
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9min1790

It’s time for your Daily Hit of cannabis financial news for December 2, 2019.

On The Site

Lil Wayne

The cannabis industry continues to see a crossover of rap artists entering the space. The latest is Lil Wayne who announced on Monday the launch of GKUA Ultra Premium. The GKUA Ultra Premium will offer a line of high-potency cannabis products designed to provide consumers with ‘the best high of their lives.’

“I used to just want to get high, now I smoke to get inspired,” said Lil Wayne. “With GKUA, I’m sharing a feeling that I love.”

SOL Global

SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) delivered its second-quarter results in Canadian dollars with a net loss of $51.3 million loss and no revenues only a loss of $57 million versus last year’s loss of $17 million for the same time period. The second quarter of 2018 also experienced a net income of $179 million due to the gain on the sale of a subsidiary.

Hemp Farmers

Currently, there is a bit of confusion regarding the legalization of hemp as an industry in the States. This confusion leads the local government to ban new farmers from attending to their hemp gardens for fear of being penalized under the new law.

The next few paragraphs will hopefully clear all the confusion away and allow new farmers to work on their land without much hesitation and limitation.

Giving Back

Last week was Thanksgiving and many cannabis companies and dispensaries ran holiday promotions. However, some cannabis companies though treat every day like its Thanksgiving as they make giving back to the community part of the company mission. These are some of the cannabis companies who give back every day and not just at the holiday.

In Other News

Indus Holdings

Indus Holdings, Inc. (CSE:INDS)(OTCQX: INDXF), a leading, vertically-integrated cannabis company, announced its financial results for the fiscal third quarter ending September 30, 2019. All figures stated are in US Dollars. Revenue generated for the three-month period ending September 30, 2019, was $10.1 million; 94% year-over-year growth. Revenue for the nine-month period ending September 30, 2019, was $26.2 million; 140% year-over-year growth.

EBITDA for the three-month period ending September 30, 2019, was ($16.8 million), EBITDA for the nine-month period ending September 30, 2019, was ($22.9 million). EBITDA included ($5.4 million) in write-offs of certain inventory in net loss, foregoing any future remediation, labor, and sales costs required. The inventory adjustments included revaluation and write-offs driven by the company’s decision to discontinue certain emending processes as a result of enhancing internal quality metrics, changes in materials requirements, inconsistent laboratory testing in California, and the overall economics of re-blending and reprocessing.

Chief Executive Officer, Robert Weakley, stated, “The Company achieved a new revenue record – $10.1 million in Q3. While that represents a 94 percent year-over-year increase, we did expect more. Our projections were impacted by a cultivation contract that was not fulfilled in Q3 – we had contracted for 2,000 pounds of flower in the quarter, which did not pass our lab tests and pricing agreement, resulting in more than a $3 million negative revenue impact. At the same time, our own harvest, which we planned to have two weeks of sales in Q3, got pushed to the beginning of Q4.”

4Front Ventures

4Front Ventures announced the company’s Q3 2019 earnings. As previously reported, Systemwide Pro Forma Revenue, a non-IFRS measure, of $16,902,029, an increase of more than 20% over the previous quarter’s $14,058,442. As previously reported, IFRS Revenue of $7,517,621. The company also reported a net loss of $7 million.

True Leaf

True Leaf Brands Inc. (CSE: MJ) (OTCQX: TRLFF) announced its operating and financial results for the fiscal 2020 second quarter ended September 30, 2019. True Leaf Pet division reported revenues from global sales totaling $706,752 (CAD), a 70% increase over the first quarter of fiscal 2020 and a 24% increase year over year. The company also reported a loss of $1.8 million.

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF)  reached a definitive Cannabis Material Purchase Agreement on November 29, 2019, with a Canadian Licensed Producer. Under the terms of the Agreement, Aleafia Health will sell 2,840 kg of dried cannabis flower at a price per gram of $2.50, generating $7.1 million in revenue. The transaction will include up to three shipments, all of which will be completed before January 31, 2020.

The dried flower was cultivated at Aleafia Health’s Port Perry Outdoor Grow facility, which yielded 10,300 kg in 2019. The yield figure is limited to dried flower only, and excludes stems or other parts of the cannabis plant.

Aurora Cannabis

Aurora Cannabis Inc.  (NYSE: ACB), the Canadian company defining the future of cannabis worldwide, today announced that one of the Company’s oil products has now been approved for use under Ireland’s new Medical Cannabis Access Programme (MCAP). Aurora’s High CBD Oil Drops received approval from the Irish authorities and have now been added to a regulatory schedule by the Irish Minister of Health enabling importation, prescribing and supply under the scheme and is to date, one of only two products to gain such authorization.

Aphria

Aphria Inc.  (TSX: APHA)(NYSE: APHA) announced that its subsidiary Aphria Diamond secured a credit facility, on November 29 2019, with a major Canadian chartered bank as sole arranger, sole book runner and administrative agent on behalf of a group of lenders for a committed senior secured credit facility of $80 million.


Debra BorchardtDebra BorchardtDecember 2, 2019
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4min3460

The cannabis industry continues to see a crossover of rap artists entering the space. The latest is Lil Wayne who announced on Monday the launch of GKUA Ultra Premium. The GKUA Ultra Premium will offer a line of high-potency cannabis products designed to provide consumers with ‘the best high of their lives.’

“I used to just want to get high, now I smoke to get inspired,” said Lil Wayne. “With GKUA, I’m sharing a feeling that I love.”

The rapper’s real name is Dwayne Michale Carter Jr. and has over 10 million followers on his Instagram account @liltunechi. At the age of 13, when he was discovered by Birdman and joined Cash Money Records as the youngest member of the label. His first platinum record was in 1999 and he has since had more gold records and won a Grammy.  Lil Wayne has sold over 120 million records worldwide, including more than 15 million albums and 37 million digital tracks in the United States, making him one of the best-selling artists of all time.

“The combination of our incredible products, market knowledge and commitment to quality, paired with the unmatched fanbase of Lil Wayne, the ultimate cannabis connoisseur, creates an unprecedented opportunity to create a cannabis brand that values creativity and the artistic pursuit,” said Beau Golob, President and Co-founder GKUA Inc. “It’s an honor to lead this company along with Lil Wayne, curating a premium line of products that inspires people and feeds their creativity. This is historic and really exciting!”

The products will be sold in Los Angeles dispensaries with a larger roll-out across the state in 2020. They include:

  • GKUA Ultra Premium Flower: Sourced from the most experienced growers, GKUA will produce strains that are very limited, incredibly potent and impossibly difficult to find…truly the best flower! Available at launch is HOLLYGROVE a unique strain for Lil Wayne and GKUA and UPROAR a very limited strain.
  • GKUA Ultra Premium Battery Technology: This new proprietary ceramic heating element and cutting-edge design is optimized to efficiently deliver vape in easily controllable doses while elevating the user experience. The battery technology combined with GKUA Ultra Premium THC or CBD oil is the future of vape.
  • GKUA THC Vape: Sourced from the best cannabis with all organic inputs, GKUA’s THC Vape is an exclusive formulation that carefully transforms the highest quality cannabis into potent THC vape oil. Independently lab tested and certified for purity. GKUA Ultra Premium vape oil, pure and potent.
  • GKUA Ultra Premium Concentrates: Intensely potent and flavorful, GKUA Ultra Premium Concentrates are sourced from the finest cannabis flower with off-the-chart THC levels created for dabbing or adding to flower. Potency you can taste and feel.

Beyond the products, GKUA plans to celebrate culture and artistic achievement. GKUA said it will support new artists in multiple mediums, such as fashion designers, song writers, musicians, models, dancers and visual artists through artistic collaborations that promote not only the brand, but the GKUA lifestyle.

 


Debra BorchardtDebra BorchardtDecember 2, 2019
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7min2500

SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) delivered its second-quarter results in Canadian dollars with a net loss of $51.3 million loss and no revenues only a loss of $57 million versus last year’s loss of $17 million for the same time period. The second quarter of 2018 also experienced a net income of $179 million due to the gain on the sale of a subsidiary.

In the last six months, SOL Global has recorded a net loss of $94 million or $1.75 per share. The company noted that 78% of this loss is due to SOL Global’s investment in Verano Holdings Inc. “Early in 2019, Verano announced a merger agreement with the public company Harvest Health & Recreation Inc. As a result of this merger agreement, the price of the company’s investment in Verano is linked to the value of the underlying Harvest shares that the company will receive should the publicly announced merger close. As the value of the Harvest shares decreased significantly from April 1, 2019 to September 30, 2019, the company recorded an unrealized loss of $74.2 million on its Verano investment. The remaining loss is primarily attributed to changes in the Company’s other cannabis-related investments.”

“We are disappointed in the volatility of certain core portfolio holdings which had a significant negative impact on our NAV, however, we continue to stand by those investments and their long-term value creation,” said CEO Brady Cobb. “Our stock has had a larger decline than others but traditionally an investment holding company trades at a discount to operating companies. That, coupled with 1 or 2 of our core holdings having larger price declines than expected due to HSR delays has had the majority of impact on our NAV decline.”

Confusing Acquisition Plans

In addition to the big losses, SOL Global has shifted gears with its acquisitions causing investors to lose track of what exactly the company is planning to do. SOL Global stated that it still intends to complete a transaction for the sale of 3 Boys Farms, LLC within 2 years of the closing date of its acquisition. “In the event that a sale of 3 Boys Farms, LLC does not occur within the two-year timeframe, only then would the Company be required to compensate the former CannCure shareholders US$80 million.” SOL was going to sell 3 Boys to Verano, but when Verano said it was buying Harvest Health, it didn’t need a Florida property and so that agreement was terminated.

The company also recently terminated the plan to acquire MCP Wellness, which would have given the company a large presence in Michigan, which just began recreational sales on Dec. 2.

Video Gaming?

Adding to the confusion is the company’s investment in a video game business. Two of SOL Global’s non-cannabis investments, Torque Esports Corp. (TSX-V: GAME) of which the company presently owns 9% of its shares, and Frankly Inc.  (TSX-V: TLK) of which the company presently owns 13.8% of its shares, have agreed to merge with a third company, WinView, Inc. in a triple-merger. The combined entity will be called Engine Media Holdings, Inc. with the plan to form integrated news, gaming, and esports platform. WinView Executive Chairman Tom Rogers, best known for founding CNBC and then CEO of TIVO, will serve as Executive Chairman of the new entity.

If shareholders were wondering whether this should be looked upon as a way to diversify risk, SOL Global shot that down by adding, “There are no assurances that the proposed transaction will be completed or at all.”

More confusing is that SOL Global also filed an early warning report in connection with a disposition of common shares of Frankly Inc. and also stated that it sold 103,500 common shares of Torque Esports resulting in SOL Global becoming a beneficial holder of less than 10% of the shares receiving approximately $ 130,864.

Cobb added, “This deal, which was brought together by our investment team, illustrates our strength in recognizing value in individual assets but also the foresight to cohesively align and bring investments together in order to maximize shareholder value by looking outside of the box. The esports industry marketing size is set to surpass the $1billion dollar revenue mark in 2019 according to NewZoo at a time when streaming is taking over cable providers. I’m personally excited to see this investment play out and am proud of our investment team for finding the opportunity in both Torque and Frankly and bringing them to another level. ”

Heavenly Rx To NASDAQ

SOL Global owns 40.7% of Heavenly Rx Ltd. which has signed a memorandum of understanding with the NASDAQ exchange. Heavenly is supposed to a reverse takeover of Therapix Biosciences Ltd (NASDAQ: TRPX), a specialty clinical-stage pharmaceutical company with a portfolio of technologies and assets based on cannabinoid pharmaceuticals. However, SOL also made sure to note that there also no assurances this deal would come to completion.

In October the company said it was changing its name to Bluma Wellness, but so far the board hasn’t voted to approve the name change.

Shareholders are apparently comfortable with the losses as the stock moved higher by 3% to trade at roughly 34 cents.


StaffStaffDecember 2, 2019
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3min1280

Company: Goldleaf Ltd.

Goldleaf brings a clear and credible perspective to the cannabis community by pairing compelling design with the latest peer-reviewed research, making the complex more approachable— beautiful, even. Specializing in guided notebooks and elegant print design for cannabis patients, growers and enthusiasts alike, Goldleaf products are available worldwide. Based in Cincinnati, Ohio, Goldleaf also provides custom design services for like-minded organizations around the world.

Full birth name:  Charles McElroy

Title: Creative Director, Owner

Years at current company: 3.5

Education profile: B.S. from Ohio University, Masters track in Business Informatics from Miami University

Most successful professional accomplishment before cannabis: Co-founded a sustainable clothing company, had the 3rd highest-grossing Kickstarter campaign at the time (in the fashion category) and went on to build a 100% USA supply chain — from the cotton farm in Georgia, knitting, and garment dying in North Carolina, sewn in Tennessee — fulfilled in Cincinnati.

Company Mission: 

Goldleaf values science, pleasing design, and education. Our mission is to create universal access to cannabis research while cultivating individual, community, and environmental wellbeing.

Company’s most successful achievement: 

We were the first to create guided journals specifically for cannabis cultivation and tracking medical therapy. We have since iterated on these initial designs and are now highly regarded for our dedication to accuracy and quality of information. Due to our approach to content creation — valuing vetted research and primary sources — we’ve garnered a stellar reputation for accuracy and integrity.  This has led us to get a great deal of mainstream media attention.

Has the company raised any capital (yes or no): No

Any plans on raising capital in the future? Yes.

Most important company 5 year goal: 

We have worked hard to build our reputation and authority in the educational design space. We plan to leverage this brand equity by expanding our custom B2B design and packaging offerings, collaborations, and growing our team of researchers and designers.


StaffStaffDecember 2, 2019
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6min5680

Last week was Thanksgiving and many cannabis companies and dispensaries ran holiday promotions. However, some cannabis companies though treat every day like its Thanksgiving as they make giving back to the community part of the company mission. These are some of the cannabis companies who give back every day and not just at the holiday:

Bloom Farms

Every day is a feast at Bloom Farms. For every BLOOM FARMS product purchased, the company donates one meal to a food-insecure family or individual in need. They have donated over two million meals since 2015. When you buy a vapor pen set or replacement cartridge from one of our retail partners in California, we pledge that a portion of your money is going to a good cause. “Anyone who considers themselves in need of food qualifies for assistance from food bank programs and pantries. It is important to us that anyone who experiences food insecurity be able to access food with dignity.”

Canna Craft

CannaCraft really keeps its giving close to home and helps those in its backyard. Best known as the makers of Care By Design, AbsoluteXtracts, and Satori Chocolates, they donated $150,000 of CannaCraft products to patients affected by the Northern and Southern California fires. CannaCraft partnered with 99 High Tide Collective in Malibu and the 530 Collective, Synergy Collective, Mount Shasta Patient Collective, and a Therapeutic Alternative Collective in the Shasta and Sacramento areas to distribute free medicine to patients impacted by the fires. The company also supports the Cannabis Voter Project and the Last Prisoner Project.

Green Thumb Industries

Green Thumb Industries (GTI) has a tab on its website that says Community. Within that page, the company lists seven different organizations that the GTI supports. They include the African American Chamber of Commerce, Illinois Women in Cannabis, Invest for Kids and Streetwise to name a few.  “Service in our communities is core to who we are as a company.  At headquarters, for example, we have Inspire Impact days where we volunteer as a group,” said Linda Marciano at GTI. “Some recent examples of causes we support through walks or volunteer efforts include suicide awareness, special Olympics and breast cancer awareness. Our Dogwalkers brand supports animal shelter organizations. We produced special rythm-branded pens for breast cancer awareness month and also a Pride pen for Pride month.”

Ocean Cannabis Company

Ocean Cannabis Company was founded by philanthropist couple, Patrick and Mary Ersig.  Their love for the ocean led them to create a cannabis brand with a focus on sustainability, going “green” to save the big “blue”.  In their commitment to raising the bar for what clean conscious cannabis truly looks like, Ocean Cannabis Company has partnered with Ocean Works and Sana Packaging.  Their child-resistant plastic tubes are made from 100% plastic that has been reclaimed and recycled from the ocean and all product packaging is made from recycled goods.

This commitment to saving the oceans doesn’t come without a price. They’re spending more on their product packaging out of social consciousness but their customers will never see those costs. It’s their small part to help clean up the world’s oceans and rid them of plastic

Harborside

Since its inception in 2006, the Harborside Inc. (CSE: HBOR) dispensary in California estimates it has donated a total of $500,000 to 58 community groups, including the United Seniors of Oakland and Alameda County and San Francisco AIDS Walk.

Since 2008, it has offered 20,000 hours of free holistic services to the surrounding community and given $250,000-worth of free medical marijuana to needy patients under a Care Package Program.

“Our mission is to build a world that lives by the values cannabis teaches us and one of those is generosity,” said Kelly Quirke, community engagement coordinator for Harborside. “That grows with the recognition that we’re embedded in a community that supports us, and we’re inspired to support the community.”

Sunday Scaries

Sunday Scaries produces CBD Gummies called Unicorn Jerky created to honor Julia, co-founder Mike Sill’s sister who passed away from suicide in 2011. Sunday Scaries donates $1 from every purchase to The Trevor Project, which raises awareness for suicide prevention in the LGBTQ community.  While $1 might not seem like a lot, it can go towards the salary of an operator that works full-time supporting LGBTQ youth in need. It can go towards creating new initiatives, supporting schools and social programs that seek to curb youth suicide, and raising awareness for LGBTQ issues. $1 can go towards saving a life.


StaffStaffDecember 2, 2019
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7min2480

Currently, there is a bit of confusion regarding the legalization of hemp as an industry in the States. This confusion leads the local government to ban new farmers from attending to their hemp gardens for fear of being penalized under the new law.

The next few paragraphs will hopefully clear all the confusion away and allow new farmers to work on their land without much hesitation and limitation. 

Where the Confusion Lies

The confusion lies mainly with the different individual laws that are passed with regard to hemp production and planting in different American states. Most of these areas act as though they are their country ways exclusive set of laws that only applies to their jurisdiction.

At present, a few news outlets have already expressed their dismay regarding the food and drug administration’s lack of clear cut guidelines regarding the implementation of the new ordinance regarding hemp production.

Some of these experts also tend to confuse CBD (hemp) with marijuana, which is still illegal in some American states. Because of the confusion, most of the so-called independent states that support the legalization of hemp have made some changes in their policies, which prevent new farmers from producing this helpful product and therefore damaging the industry as a whole.

The Effects

In addition to this, some establishments already prohibit the offering of hand based products in fear of the new laws. These bans in some New York establishments have taken effect since July of 2019. 

Law enforcement has arrested many under the assumption that the perpetrators allegedly carry marijuana and have delivered products laced with THC, which is known as the basic component of the plant-based drug in various states in the country.

The Official Statement

In a statement, the FDA said that the regulations and implementing rules regarding the ordinance would vary depending on the accused intent and purpose of use. This stipulation means that the alleged owner of the CBD would be released if they have carried and use the products as medication as opposed to eating it outright.

The agency also has said that they are aware of increased public interest in the use of CBD and are committed to finding ways to allow lawful marketing of CBD in public. This way, people will still be able to reap the health benefits of utilizing CBD or hemp as part of the farming industry.

Individual Policies

For now, the people must be content with each state’s individual ordinance against or for the legal use of hemp in each of these areas. Here are some additional details regarding the allowed amount of hemp in each state.

  • Alabama, Colorado, and Maine allow production and delivery of hemp as long as it has less than 3% of THC in it.
  • On the other hand, Indiana, Texas, and Utah require QR codes to allow this a delivery and distribution of CBD-based products.
  • In New York, some CBD-based products are allowed. However, there are a few that will remain uncertain about using this particular product as an additive in recipes.
  • California allows CBD-based food products as long as there are proper certification and labeling within the packaging itself.
  • New bills and ordinances could be passed for or against CBD Products and its producers in North Carolina.
  • In Alaska, officials will only place and enact new guidelines regarding hemp, its production, and use upon successful testing.

The U.S. is one of the proponents of the legalization of CBD-based Products in the world. However, it seems that the lack of clear regulation regarding the production of this product is most likely to affect the popularity of the product within the country itself.

The FDA certainly will make sure that they can provide the necessary evidence and tools that could help producers and vendors of these products to benefit from the ever-growing CBD industry, not only the U.S. but all over the world.

Conclusion

It is certainly just a matter of time, so if you are interested in becoming a CBD producer, it would be best to know the product itself and the regulations involved in making it. This way, you will be safe in running the business. You should look at some of the best weed strains available in the market before making your final decision. This way, you will get the best out of the product in the future.

Guest Post by Alan Wood.


Debra BorchardtDebra BorchardtNovember 29, 2019
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3min2060

1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) reported that its revenue increased 44% to $18.1 million in Canadian dollars for the fiscal year ending July 31, 2019. The revenue for 2018’s fiscal year was $12.5 million. Still, the company reported that it had a net loss of $19.1 million.

1933 noted that $5.0 million was attributed to a one-time non-cash impairment write-down of a non-performing subsidiary, $3.4 million in biomass purchases, non-cash share-based compensation of $2.2 million, $1.5 million in interest payments, a one-time non-cash loss on disposal of property and equipment of $1.9 million and a non-cash accretion expense of $1.2 million. The company also delivered an adjusted EBITDA loss of $10.1 million, compared to $3.1 million in 2018.

The total revenue for the fourth quarter was $5.4 million versus last year’s $3.8 million for the same time period. The net loss for the quarter was $5.6 million versus last year’s net loss of $3.8 million.

“Our second year of operations was met by a surge in market volatility, challenging capital markets and a changing regulatory environment,” said Chris Rebentisch, Chief Executive Officer. “Although not immune to sector-wide stock pressures and volatility, the Company remains positioned with growth and profitability in mind and we continue on target on this path. We are razor-focused on continuing to ensure the long-term viability of the Company. We have implemented cost-cutting measures aimed at reducing our current operating expenses, improving efficiencies and strengthening our product offerings while building a sustainable foundation.”

Gross margins fell dramatically to $815,690 (16%), compared to $2,197,803 (57%) during Q4 2018. Gross margins for fiscal 2019 were $5,296,980 (29%), compared to $6,351,466 (51%) during fiscal 2018, a decrease of 17% The decrease in the gross margin percentage from the prior year is primarily due to increased purchases by AMA of third-party biomass to produce concentrates and final products. The company said it expects to be producing sufficient amounts of biomass from its new facility, which is expected to significantly improve the realized gross margins. Partially offsetting the increased costs of AMA, Infused has significantly increased its customer base which has resulted in improved economies of scale in the production of CBD-based products, positively impacting overall gross margin.

Rebentisch added, “We forecast strong revenue growth in 2020 as we expand our proprietary portfolio of AMA branded THC flower and concentrates, continue innovating our unique, differentiated, quality-based CBD Canna Hemp portfolio and as our recently added licensing partnerships bear fruit. We anticipate significant margin improvements as we complete the build-out of new cultivation and production facilities in Nevada and become less reliant on wholesale biomass suppliers. With our focused vision on delivering the highest quality consumer branded goods, we have a disciplined growth path to scale up operations in 2020 and beyond.”

 


StaffStaffNovember 29, 2019
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It may be a holiday weekend for Americans with Thanksgiving, but Canadian companies soldier on with earnings announcements.

Westleaf

Westleaf Inc. (TSX-V:WL) (OTCQB:WSLFF) reported operating revenues of $1.7 million for the third quarter of 2019, up 82% from Q2 2019. The company also reported a loss of $4.9 million

The company said that total revenue reflects operations from three cannabis retail stores in the Saskatoon region and one in Calgary, the latter which was only operational for the final two weeks of the interim period. In management’s view, the urban stores continue to perform well and are achieving blended gross margins of ~37%.

“During the reporting period, we executed on our previously stated plans to build out a viable integrated premium cannabis company and prepare the Company for the coming of Cannabis 2.0, that is the legalization of a large variety of cannabis derivative products,” said Scott Hurd, President and CEO of Westleaf. “We successfully completed construction on The Plant, and we received a standard processing licence from Health Canada within the estimated time frame. Subsequent to the quarter-end The Plant has been operationalized and we are now prepared to begin manufacturing a number of cannabis derivative products for sale by the Company and through white label contracts for third parties.”

Selling General & Administrative costs of $3.1 million for the quarter, down ~$0.7 million or 17% from Q2 2019. Westleaf continues to be focused on cost reductions and is implementing further overhead reduction initiatives.

Naturally Splendid

Naturally Splendid Enterprises Ltd.  (TSXV:NSP) (OTC:NSPDF) announced its sales in Canadian dollars of $2,359,525 during the nine months ending September 30, 2019, compared to $1,304,040 for the nine months ended September 30, 2018. The company’s sales increased by approximately $1,055,485 representing an 81% increase over the same period last year.

Naturally Splendid recorded a net loss of $3,627,472 for the nine months ended September 30, 2019, compared to a net profit from continuing operations of $301,793 during the nine months ended September 30, 2018. The net profit in 2018 was mainly due to the company’s disposition of its shareholding of POS BPC Manufacturing Corp. which resulted in a material gain of $5,102,068 for the same period ended in 2018.

The company said it continued to expand its private-label bars and bites business by approximately $856,000 and other branded products increased by approximately $11,000. Branded hemp products decreased by approximately $208,000 as the company focused more on its new Natera Sport(TM) products which expanded by approximately $396,000. The company is focused on private label and branded sales and has entered the international markets such as German, Australian and Japanese markets.

Gross profits increased by approximately 77% for the nine months ended September 30, 2019, at $731,251 (31.0% of sales) compared to $413,235 (31.7%) for the nine months ended September 30, 2018. The cost of sales during the nine months ended September 30, 2019, was $1,628,274 compared to $890,805 in the nine months ended September 30, 2018. The company continues to maintain an approximate 31% gross margin for the nine months ended September 30, 2019. Increases in the costs of sales were approximately consistent with increased revenue and sales.

 


StaffStaffNovember 27, 2019
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6min2510

It’s time for your Daily Hit of cannabis financial news for November 27, 2019.

On The Site

Green Wednesday

While most people are starting to do Thanksgiving cooking on the Wednesday before, cannabis industry professionals prepare for one of the biggest sales days of the year. It’s known as Green Wednesday. Consumers stock up on cannabis for the holiday weekend that might be fraught with family tension.

According to new data by BDS Analytics, “In 2018, November 23rd had the highest cannabis sales of any other day during the entire month of November with over $6.2 million in sales on that day alone, which is 60% higher than the average daily sale day in November 2018 and accounted for over 5% of that month’s revenue.”

Busted Deals

The bear market for the cannabis industry is leading to the unwinding of deals that had great promise. Cannabis companies are no longer willing to write big checks with fingers crossed that the market will just continue to boom. Two of these deals were terminated after great fanfare.

Cresco Labs

Cresco Labs (CSE:CL) (OTCQX:CRLBF)  said it was ending its plan to acquire Florida-based VidaCann Ltd. which was originally announced on March 18, 2019. It was valued at $120 million when it was first announced.

SOL Global

SOL Global Investments Corp.’s (CSE: SOL) (OTCPK: SOLCF) said it decided against its deal with MCP Wellness to that was agreed to on April 23, 2019. SOL was to buy MCP Wellness for $35 million in cash and S$115 million in equity consideration in CannCure.

MCP is the Merida Capital Partners affiliate that owns the rights to own three Michigan cultivation licenses, a processing license, 9 licensed and operating dispensaries and 6 additional dispensary licenses, giving it the largest retail footprint in the state of Michigan.

Massachusetts

A year has passed since Massachusetts began sales its sale of legal adult-use cannabis and while the state showed no interest in rushing the matter, customers showed their interest as they rushed to the stores.

One year later, the state reported that licensees generated $393.7 million in gross sales and that 33 dispensaries had been licensed. The customer demand is high, but the inventory is low. There aren’t many licensed cultivators in the state of Massachusetts, leaving little room for excess.

In Other News

Dixie Brands

Dixie Brands Inc. (CSE: DIXI.U), (OTCQX: DXBRF) announced its third quarter 2019 financial results with revenue increasing 28% to $3,121,211 in Q3 2019, compared to $2,435,398 in Q3 2018. Sequential quarterly revenue increased, up from $2,995,310 in Q2 2019. Revenue growth was driven by sustained presence and increased dispensary penetration in established markets, increasing traction in the key California market, continued growth in Michigan, and the introduction of new products.

Net loss attributed to the Company in Q3 2019 of $4,915,807 was lower by $1,853,750 compared to the Q2 2019 loss of $6,769,557.  The lower net loss was due to more efficient general and administrative spending. The Q3 2019 net loss includes $2,245,413 of non-cash expenses resulting primarily from stock options issued as compensation for key management and external service providers. Dixie had $892,312 of cash at September 30, 2019.

MariMed

MariMed Inc. (MRMD:OTCQX) reported results for the quarter ending September 30, 2019. Filing of the Company’s 10-Q for the quarter was delayed awaiting receipt from GenCanna Global, in which MariMed, Inc. holds a 33.5% interest, of its operating results for the quarter., As previously reported, GenCanna experienced a major fire at its Kentucky facility in early November. Financial comparisons are to the same year-ago periods unless otherwise noted.

Total revenues increased 230.9% to $11.22 million compared to the same period of 2018. Of that total, cannabis revenues grew 24.1% to $4.21 million, while MariMed’s hemp division reported revenue primarily from seed sales, of $7.01 million in the quarter. Total operating income for the period increased to $973,000, up from an operating loss of $549,000. Overall, the Company reflected a loss for the quarter of $7.30 million primarily due to interest expense on short-term borrowings to fund hemp seed purchases, as well as the Company’s equity in the net loss reported by GenCanna. The GenCanna loss stems primarily from a one-time adjustment totaling $6.10 million relating to market value adjustments for product.


Debra BorchardtDebra BorchardtNovember 27, 2019
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5min3550

While most people are starting to do Thanksgiving cooking on the Wednesday before, cannabis industry professionals prepare for one of the biggest sales days of the year. It’s known as Green Wednesday. Consumers stock up on cannabis for the holiday weekend that might be fraught with family tension.

Or some consumers may need cannabis to help boost their desire to eat. Multiple large feasts are easier when you have appetite-inducing marijuana. Perhaps your tradition is “taking a walk” before dinner with your favorite cousin that you only see in the holidays and you use that walk to get a little buzzed.

Then there’s the uncle that wants to talk politics, but only watches one particular broadcast channel or the relative that insists climate change doesn’t exist and informs you that this crazy weather is caused by sunspots. In order to keep the peace and not get into a heated debate, cannabis mellows out these interactions.

Some people have parents that push their buttons or siblings where the relationship is complicated. A vape pen or an edible seems to melt away those anxieties. It’s certainly better than overindulging in alcohol. Or maybe the reason for the increased sales is that you’ll see old friends from home and you want to show up with party goods.

So there may be many ideas about why the purchases are being made, what isn’t disputed is that the sales are happening.

According to new data by BDS Analytics, “In 2018, November 23rd had the highest cannabis sales of any other day during the entire month of November with over $6.2 million in sales on that day alone, which is 60% higher than the average daily sale day in November 2018 and accounted for over 5% of that month’s revenue.”

BDS provided additional data to demonstrate just how widespread these sales increases are.

  • November 21st – Day Before Thanksgiving – was the second highest revenue day of November IN ALL TRACKED STATES (2018).
    • AZ: over $2.7 million in sales, 67.2% higher than average and 5.6% of November sales.
    • CO: over $5.6 million in sales, 34.4% higher than average and 4.5% of November sales.
    • OR: over $2.8 million in sales, 55.8% higher than average and 5.2% of November sales.
    • CA: over $10.3 million in sales, 36.4% higher than average and 4.5% of November sales.
    • NV: over $2.2 million in sales, 31.9% higher than average and 4.4% of November sales.
  • November 23rd –Day After Thanksgiving, Black Friday – was the highest revenue day of November IN ALL TRACKED STATES (2018).
    • AZ: over $3.6 million in sales, 125% higher than average and 7.5% of November sales.
    • CO: over $6.7 million in sales, 60% higher than average and 5.4% of November sales.
    • OR: over $3 million in sales, 67.3% higher than average and 5.6% of November sales.
    • CA: over $10.3 million in sales, 37.3% higher than average and 4.6% of November sales.
    • NV: over $2.7 million in sales, 57.8% higher than average and 5.3% of November sales.

The sales aren’t just limited to bricks & mortar stores. Online cannabis marketplace, Eaze saw a 136% increase in deliveries on Green Wednesday last year compared to a typical Wednesday in 2018.

As the stigma begins to decline, there may come a day where instead of passing the peas, family members may be passing the peace pipe.



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