Public Archives - Green Market Report

William SumnerWilliam SumnerJanuary 2, 2019
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3min1480

Cannex Capital Holdings Inc. (CSE: CNNX) today announced its financial results for the second quarter of the 2019 fiscal year, which ended on October 31, 2018.

Revenue for the quarter rose to $3.05 million, up roughly 223% from $1.8 million during the same period in the previous year. The bulk of the revenue increase was attributed packaging sales and rental income.

Likewise, the company’s net income rose to $696,746; a significant increase when compared to the loss of $815,188 during the second fiscal quarter of 2018. Adjusted EBITDA decreased slightly, falling from $1.1 million to $1.03 million. At the end of the period, Cannex had approximately $10.04 million in cash and cash equivalents.

Following the end of the quarter, Cannex took several steps to strengthen its balance sheet; including signing a binding letter of agreement to merge with 4Front Holdings LLC. In an all-stock transaction. The merger is still pending due diligence regulatory approval, and there is no guarantee that merger will be completed as initially proposed.

If completed, the Cannex will own, operate or manage cultivation and production facilities in Washington, Illinois and Massachusetts and five retail operations in Illinois, Massachusetts, Maryland, and Pennsylvania.

The company also secured $32 million in funding from Gotham Green Partners, LLC, and will use the proceeds to retire existing debt and to support Cannaex’s multi-state operations.

“Cannex is pleased with another quarter of good topline results driven by continuing strong performance of our Washington State operations,” said Anthony Dutton, CEO of Cannex. “Washington is a critical component to our long-term strategy and forms the underpinnings of our operational template that we will leverage as Cannex expands into additional jurisdictions as a part of our recently announced business combination with 4Front Holdings.”

It has been a rough year for Cannex’s stock, despite the recent gains over the last quarter. Since March 2018, the company’s share price has been on a slow decline, bottoming out at around CAD$0.56 in late October. Since then, however, Cannex has been on the rise and is currently trading at or around CAD$0.96.


William SumnerWilliam SumnerDecember 7, 2018
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3min2000

Today, Cronos Group Inc. (NASDAQ: CRON) announced that it had received a CAD $2.4 billion investment from Altria Group Inc. (NYSE: MO), the owner of Marlboro cigarette marker Phillip Morris USA.

The investment comes a little more than a year after Corona beer distributor Constellation Brands announced that it would invest billions of dollars in Canopy Growth Corporation (NYSE: CGC). For some, the investments from both Constellation and Altria represent the maturation of the cannabis industry and a sign that cannabis has truly gone mainstream.

For others, however, the investments mark the beginning of the end for the independent cannabis industry as Big Tobacco and Alcohol, which have fought against cannabis legalization for decades, start to take over the market.

The private placement investment will give Altria a 45% stake in Cronos Group. Altria will receive 146.2 million Shares of Cronos at closing at a price of CAD $16.25 per Share, representing a 41.5% premium to the 10-day VWAP of the Shares on the TSX on November 30, 2018. In addition, Altria will receive purchase share warrants, valued at CAD $1.4 billion, which if exercised would give the company an additional 10% in Cronos.

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Chairman and CEO of Altria. “We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential.”

Under the agreement, Altria will have the right to name four directors to Cronos Group’s board of directors, which includes one independent director, and the board will be expanded from five directors to seven. Altria will make Cronos its exclusive partner for all world-wide cannabis-related investments, with some limited exceptions.

News of the deal has caused to Cronos’ stock price to jump by nearly 25% in pre-market trading. Altria’s stock price rose by nearly 2% in pre-market trading. As of publication, Cronos is trading at or around USD $13.00 per share, and Altria is trading at or around USD $55.43.

Pending regulatory approval, the deal is expected to close within the first half of 2019. Earlier this morning, Cronos held a conference call discussing today’s announcement, and a recording of the call has been made available at https://thecronosgroup.com/investor-relations.


William SumnerWilliam SumnerNovember 30, 2018
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4min3790

MPX Bioceutical Corporation

MPX Bioceutical Corporation (CSE: MPX) reported its financial results for the second quarter ended on September 30, 2018. MPX recorded revenue of CAD$14.7 million, up from CAD$4.4 million in the same quarter during the previous year. The increase in revenue was attributed to wholesale operations and the company’s management of four cannabis dispensaries in Arizona. Gross profits for the quarter rose by 30.1% to $4.4 million.

The company’s net loss for the quarter rose precipitously to CAD$19.2 million, up CAD$3.9 million in the same period during the previous year. The company attributes its losses to general operations, accretion expense of CAD$1.4 million and costs related to the change in fair value for the Hi-Med Facility and convertible loan for CAD$9.2 million.

“For the second quarter, we again experienced strong growth, with revenue increasing $10.3 million year over year, topping $14.7 million, driven by the strong performance of our Arizona operations and much-improved production from our facility in Nevada,” said W. Scott Boyes, Chairman, President, and CEO of MPX. “We continue to execute upon our aggressive expansion strategy, as demonstrated by the successful openings of the Health for Life dispensaries in Maryland managed by one of MPX’s subsidiaries.”

Plus Products Inc.

The California-based edibles manufacturer, Plus Products Inc. (CSE: PLUS) announced its financial results for the quarter ended on September 30, 2018. Revenue rose to $2.56 million, up 60% over the previous quarter. The company’s loss and comprehensive loss rose to $1.79 million, up from $1.21 million during the same period during the last year.

PLUS ended the quarter with a gross margin of $0.38 million (15%) and $11.1 million in cash on hand. Shortly after the end of the quarter, the company  went public and closed a CAD$20 million IPO

“We are pleased that as measured by retail sales in Q3, the PLUS brand is now the leading edibles brand in the largest and most competitive cannabis market in the world, and we look forward to extending the brand beyond California in 2019,” said Jake Heimark, CEO of PLUS.

Emerald Health Therapeutics Inc.

Emerald Health Therapeutics Inc. (TSXV: EMH) reported its financial results for the third quarter ending on September 30, 2018. Revenue for the company rose to $321,070, representing an increase of 51% when compared to the same period in the previous year. Likewise, Emerald Health’s net loss also increased; increasing from $1.9 million in Q3 of 2017 to $6.26 million.

Shortly before the end of the quarter, Emerald Health was chosen as an authorized cannabis supplier by the Newfoundland Labrador Liquor Corporation (NLC), and by the last week of November had completed its first adult-use cannabis shipments to Newfoundland; as well as British Columbia and Labrador.

“As we move forward at this pivotal point of commercial production, we expect our Pure Sunfarms joint venture, Quebec facility, and hemp sourcing agreements to result in significant scaling of production and sales from the fourth quarter onward,” commented Avtar Dhillon, MD, President of Emerald Health.

 


William SumnerWilliam SumnerNovember 29, 2018
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3min3990

Today, Acreage Holdings Inc. (CSE: ACRG.U) announced its unaudited financial results for the third quarter, which ended on September 30, 2018.

Acreage reported quarterly revenue of $5.5 million, representing a 160% increase when compared to the same period in the previous year. The company’s year-to-date revenue increased by 92% to $10.6 million. The company’s net loss increased from $0.7 million in the third quarter of 2017 to $4 million. The year-to-date net loss was $2.1 million.

Gross profits for the quarter, excluding fair value items, was $1.9 million; up 118% when compared to the same period in the previous year. Year-to-date gross profits were $3.8 million, representing an increase of 76% over the previous year.

During the last quarter, Acreage launched its flagship brand, “The Botanist;” opening a cannabis dispensary in Baltimore, Maryland and increasing the number of dispensaries owned by the company to 16. By January 2019, the company expects to have as many as 23 retail dispensaries opened. Acreage was also awarded the right to receive one of eight total dispensary licenses in the state of North Dakota.

“We are in the midst of a transformative moment for the U.S. cannabis industry and we have been laying the groundwork to fully leverage our unique strategic advantages – scale, operational depth, and financial strength,” commented Kevin Murphy, Founder, and CEO of Acreage. “Our November public listing and private placement equity raise of approximately $314 million gives us the ability to continue to expand our industry-leading footprint beyond the 18 states that we are in. These efforts have laid the foundation for us to roll out the nation’s first truly national brands in the industry. With our operational foundation now in place and the tailwinds of transformational pending legislation that we anticipate will open new cannabis markets in the U.S., we believe we are in a strong position for the future.”

Acreage on the Move

Over the last month, Acreage has made a number of property purchases and acquisitions to strengthen its portfolio. Most recently the company close the acquisition of Michigan-based Blue Tire Holdings LLC, entered into an agreement to acquire the intellectual property rights of one of the world’s largest and diverse libraries of cannabis genetics, and has agreed to purchase a third Connecticut cannabis dispensary. The latest purchase in Connecticut will give Acreage three of nine dispensary licenses in the state.

 


StaffStaffJuly 19, 2018
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5min14930

Part 2 of 8 of the Cannabis Trends for 2018: U.S. companies run north of the border and IPOs are on the rise.

Over the next year expect an increase of cannabis companies to start going public in Canada instead of the United States. Although the U.S. market has great potential in the long run, there are a lot of short term advantages to going public in Canada.

The first, and most obvious reason, is that Canada has legalized recreational cannabis sales.

Sure, nine states have legalized recreational cannabis, but it’s still federally illegal. US cannabis companies continuously have to look over their shoulders, hoping that the federal government isn’t about to kick down their door and make their business close its doors for good. Not to mention the fact that the entire U.S. market still  operates as cash-only, with extremely limited access to banking services.

Put yourself in the position of a cannabis business owner: Would you rather operate in a market that has the *potential* of being more profitable but has no access to banking services and puts you at risk of being arrested? Or would you want to operate in a market that carries little legal risk and you can actually open a bank account? For many entrepreneurs, it’s a pretty simply choice.

One company that is not afraid to do business in both the United States and Canada is Sunniva. Headquartered in Calgary, Canada, Sunniva is on the fast track to becoming one of the first cannabis companies to be licensed in both Canada and California, which is one of the world’s largest cannabis markets.

Legality aside, there’s also the issue listing requirements in the U.S. Companies have to be meet very strict requirements in order to become listed on the New York Stock Exchange (NYSE) or NASDAQ. For example, in order to become listed on the NYSE you need to have publicly held securities that are valued at a minimum of $100 million. Likewise, companies hoping to go on NASDAQ need a pre-tax income of $11 million for an aggregate of three years.

Contrast that with the Canadian exchanges, where companies on the TSX only need a pre-tax income from the previous year totaling $300,000. Those are not the only requirements, of course, but from there you can get a pretty clear idea of how difficult it is to make it on the NYSE or NASDAQ compared to the CSE or TSX.

The vast majority of “cannabis companies” listed on the NYSE and NASDAQ are biopharmaceutical companies, like GW Pharmaceuticals, that aren’t primarily cannabis companies. The only two companies that are purely cannabis companies that are publicly listed in the United States is Cronos Group and Canopy Growth.

With fewer barriers and fewer risks, numerous companies that previously started as U.S. based companies have begun moving operations north of the border and are making preparations to go public. Some of those companies include Acreage Holdings, Dixie Brands Inc., and MJIC Inc.

In the short term, expect an exodus of cannabis companies either going public or completely moving their operations to Canada and expect them to stay there until the United States finally decides to tackle federal cannabis reform.


William SumnerWilliam SumnerJune 1, 2018
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3min6900

On May 30, 2018, Maricann Group Inc. announced the filing of its financial results for the quarter ending on March 31, 2018. It was a tough quarter for the company as profits took a precipitous tumble from $1,143,167 in Q1 of 2017 to $600,591 for Q1 of 2018.

The steep decline in revenue was due in large part to a bulk transaction in Germany that the company had planned to take place during the quarter. However, that transaction was pushed back to the second quarter because of the time it took the company to obtain a European Medicines Agency Good Manufacturing Practice certification. Current unaudited revenue for the second quarter so far is purportedly $905,000.

The company realized a net loss of $11.4 million for a loss per share of $0.11, which is drastically lower that its loss in the same period in the previous year; which was $66.8 million with a loss per share of $1.53.

A huge portion of the company’s losses stem from its general and administrative costs Over the last year, G&A expenses have grown tremendously, from $1.7 million to $6.6 million. Even if Maricann is able to sell all of its biological assets and inventory, which totals to approximately $1.7 million, G&A expenses would still outpace revenue, leaving some investors to worry about the company’s long term balance sheet.

With legal adult cannabis sales poised to launch in Canada in the next few months, and with Maricann set to begin exporting into Europe, the company should experience a boost in revenue; which means the next few quarters will be critical to the company’s long term success.

In a statement, Maricann CEO Ben Ward expressed support for the company’s current direction and reiterated the idea that creating better margins for the company’s products is more important than short term revenues.

“We maintain our position that establishing sustainable baskets of margin for our products that will be preserved over the long term is more important than immediate gross revenue. We base all our business decisions in the interest of long term value creation for our shareholders,” commented Ward.


William SumnerWilliam SumnerMay 11, 2018
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3min3820

InMed Pharmaceuticals (IN), a cannabinoid-based biopharmaceutical company, today reported its financial results for the company’s third quarter of the fiscal year 2018, which ended on March 31, 2018.

Most recently InMed commenced trading on the Toronto Stock Exchange on March 26, 2018 as well as upgraded to OTCQX from the OTCQB® Venture Market on May 4, 2018. Additionally the company continued to work on the development of its drugs INM-750 for the treatment of epidermolysis bullosa (EB) and INM-085 for the treatment of glaucoma.

InMed expects to discuss its clinical development plans for INM-750 with regulatory authorities in the second half of 2018. Recently a peer-reviewed study on INM-085 was published in Drug Delivery and Translational Research which showed promising results. The next step for the drug includes additional preclinical efficacy testing and advanced formulation development.

Despite these positive developments, the company’s losses continue to increase with a quarterly loss of $2.13 million, nearly double the losses from the same period in the previous year. ($1.24 million). During this most recent quarter, the company issued a total of 25,143,531 common shares, bringing the the total number of outstanding shares to 152,792,997.

Expenses related to research and development rose over the last year, from $0.17 million to $0.55 million. The increase in R&D spending was attributed to expense related to the advancement of INM-750 as a treatment for EB. General and administrative expenses, on the other hand, slightly decreased from $0.88 million to $0.81 million.

The company’s cash, cash equivalents and short-term investments were $13.88 million at the end of the quarter, compared to $6.71 million on June 30, 2017.

“During the third quarter of fiscal 2018, InMed continued to execute on its R&D and business strategy,” said InMed President and Chief Executive Officer, Eric A. Adams, in a statement. “InMed is making headway at establishing its leadership position as a fully-integrated cannabinoid pharmaceutical company; we are not only developing innovative therapies for the treatment of important diseases with high unmet medical needs, but are also leading the burgeoning cannabinoid sector with our first-in-class biosynthetic manufacturing technology.”


William SumnerWilliam SumnerMay 11, 2018
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3min5420

The cannabis-focused agricultural company Terra Tech Corp. (TRTC) has announced its quarterly financial results for the period ending on March 31, 2018.

Revenue for the quarter was $8.6 million, representing a 26% increase when compared to the period in the previous year. The company attributed its growth to the revenue generated from its cannabis dispensaries in California and Nevada, as well as a 40% increase in sales of produce and herbs nationwide through its Edible Garden brand. Compared to the same period last year, the company’s gross margin increased from 5.3% to 19.1%

Expenses for the company increased over the last year, rising from $6.4 million to $8.4 million. Likewise, the company’s long term debt of the last quarter has increased from $6.6 million in Dec. 31, 2017 to $13.2 million as of March 31, 2018. However over the last year the company’s losses have slightly decreased from $10.1 million to $10 million.

In terms of cash on hand, the company has $4.5 million. Additional, the company was able to secure an additional $40 million in funding during the last quarter and will be paid out in $5 million installments over the next two years. Equity for stockholders increased over the last quarter to $85.7 million.

“We were pleased to report revenue growth of 26% compared to the prior year period,” commented Derek Peterson, Chief Executive Officer of Terra Tech. “This was the first quarter in which we generated revenues from sales to California’s adult use cannabis market. We believe these revenues will accelerate as the industry’s supply chain professionalizes and the adult-use market matures.”

So far the markets have responded positively to Terra Tech’s financial results, causing the company’s stock to briefly rise to $3.15 per share before leveling off to $2.92. On May 10, 2018, Peterson held a conference call to answer shareholder questions, a replay of the call can be found here.


William SumnerWilliam SumnerFebruary 7, 2018
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8min22202

Cannabis may be illegal on the federal level, but that hasn’t stopped entrepreneurs and investors from making a killing off of the industry. While the vast majority of cannabis stocks remain on the OTC Market, a select few have graduated to the more prestigious exchanges; like the NASDAQ (NDAQ) or New York Stock Exchange (ICE).

In our two-part series, Green Market Report will take a look at the cannabis companies that have managed to break through and get listed on either the New York Stock Exchange or the NASDAQ Stock Market. First up is the New York Stock Exchange.

Innovative Industrial Properties Inc.
First listed on the NYSE on Dec. 1, 2016, Innovative Industrial Properties (IIPR) is a company with a focus on specialized industrial real estate assets. Specifically, the company owns and leases industrial real estate assets to medical cannabis companies. In addition to leasing medical cannabis cultivation and processing facilities, the company also provides their clients with the services of professional medical cannabis growers, many of whom have gone through the licensing process, as well as long-term triple net leases. Company stock is currently trading at $26.10, down from its all-time high of $36.57.

22nd Century Group
22nd Century Group (XXII) is a biotechnology company that made its debut on the NYSE on March 11, 2014. Specializing in genetic engineering and plant breeding, the company has been working towards the research and development of cannabinoid-related products derived from industrial hemp. Partnering with the University of Virginia, the company harvested its first hemp crop, valued at $1 million, in 2017. Most notably, 22nd Century has developed a strain of tobacco with “non-addictive” levels of nicotine, the first of its kind, and is currently seeking a patent on the strain. The company’s stock is currently valued at $2.90 per share, more than two dollars higher than it was at this same time last year.

India Globalization Capital

India Globalization Capital (IGC) is an internationally diversified company that works in both infrastructure and cannabis-related pharmaceutical research. Internationally, the company works in real estate, heavy equipment, and the construction and leasing of farming facilities. Domestically, the company is developing a product portfolio of phytocannabinoid-based therapies to treat Alzheimer’s, pain, nausea, etc. In December of 2017, India Globalization Capital’s received a huge boost in its stock price after it announced that it would work towards developing a blockchain-based platform aimed at solving industry-related issues, such as inadequate product labeling. However, much of those gains have been lost since the start of the year. The company’s stock is currently trading at $0.84 per share.

AbbVie
First launched as a spin-off company of Abbot Laboratories, AbbVie (ABBV) is a pharmaceutical company with one critical edge over its competitor: it already has a cannabis-related product on the market. Also known as dronabinol, Marinol is a synthetic form of THC used to help treat nausea in patients suffering from cancer and HIV treatments. Marinol has few competitors, most notable Syndros from Insys Therapeutics, and as a result, AbbVie has seen steadily increasing revenues over the last few years. However, the company’s over-reliance on US Markets make it a slightly riskier bet than it appears. Over the last year, AbbVie’s stock has risen over 50%, trading at approximately $111.20 per share.

Compass Diversified Holdings
Compass Diversified Holdings (CODI) is a company that focuses on acquiring and management “middle market businesses,” which are companies that fall somewhere between small businesses and billion-dollar businesses. The company was first listed on the NYSE on May 12, 2006. Although Compass is not primarily a cannabis company, it does have a holding in the hemp-based food companies Manitoba Harvest and Hemp Oil Canada. Compass’ stock price has been on a slow decline for the last several years, falling by 4% in the last year alone to approximately $16.60 per share.

Scotts Miracle-Gro
If you’ve ever owned a lawn or worked outside, then odds are you already know Scotts Miracle Gro (SMG). In 2016, Scotts Miracle-Gro surprised the cannabis industry and the markets when CEO Jim Hagedorn announced that he planned on investing approximately $500 million in the cannabis industry. So far the company has spent hundreds of millions of dollars to acquire hydroponics companies and technology. In addition, the company has also begun looking into developing pesticides developed specifically for cannabis plants. By focusing on the ancillary side of the cannabis business. Scotts Miracle-Gro has insulated itself from many of the legal risks with the cannabis industry while opening itself up to the industry’s benefits. For the last five years, the company has enjoyed steady growth but in the last month, like many companies investing in the cannabis industry experienced a steep decline in its stock prices following United States Attorney General Jeff Sessions’ announcement that he would rescind the Cole Memo. Scotts Miracle-Gro is currently at $89.13 per share.

Stay Tuned for Part Two
Check back again for Part Two of our two-part series where Green Market Report will give you a look into the cannabis companies listed on the NASDAQ Stock Market.


William SumnerWilliam SumnerJanuary 25, 2018
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3min10090

GW Pharmaceuticals plc (GWPH) is one step closer to bringing its cannabidiol based drug, Epidiolex, to market. On Jan. 24, 2017, the company announced, along with its U.S. subsidiary Greenwich Biosciences, that The Lancet has published results from a Phase 3 study of Epidiolex in patients with Lennox-Gastaut syndrome (LGS).

The study’s publication marks the first-ever well-controlled clinical study of cannabidiol in LGS. GW Pharmaceuticals has submitted a New Drug Application (NDA) submission to the U.S. Food and Drug Administration (FDA) for Epidiolex, which was approved in December with an assigned PDUFA goal date of June 27, 2018. If approved, Epidiolex could find its way to U.S. markets by the second half of 2018. GW Pharmaceutical stock was up slightly on the news and was trading at $138 a share.

LGS is a rare form of epilepsy that manifests itself during childhood and last throughout the patient’s lifetime. Often associated with a high mortality rate and developmental delays, LGS patients can be afflicted with multiple types of seizures, many of which can result in serious injuries.

In the study, patients treated with Epidiolex experienced a significant drop in monthly seizure frequencies compared to those treated with a placebo. Treatment of Epidiolex was generally well tolerated, with few adverse effects.

The randomized study was conducted with 171 patients suffering from LGS. ranging from age 2 to 55. Approximately half of the patients (85) were given a placebo while the other half (86) were given Epidiolex.

Over the course of the 14 week treatment period, patients treated with Epidiolex experienced a significantly greater average reduction in seizures (44%) compared to those treated with a placebo (24%). Epidiolex patients were also more likely to report an improvement in their condition (58%) than those treated with a placebo (34%).

Approximately 86% of patients receiving Epidiolex reported adverse side effects, compared to 66% of patients receiving a placebo, but most effects were mild and well tolerated. The most common side effects reported were diarrhea, drowsiness, elevated body temperature, decreased appetite, and vomiting.

“The publication of these positive results is an exciting milestone for the LGS community and we are encouraged that a new treatment option could soon be available,” said Christina SanInocencio, executive director of the Lennox-Gastaut Syndrome Foundation, in a statement. “Additional treatment options are desperately needed for patients who continue to struggle with uncontrolled seizures and these results offer much-needed hope to those living with this debilitating condition.”

 



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


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