It’s time for your Daily Hit of cannabis financial news for September 21, 2021.
On the Site
The Securities and Exchange Commission (SEC) filed charges against three individuals and one issuer on a crowdfunding scheme for two cannabis companies that raised $2 million. The money was supposed to be used to buy and invest in cannabis properties, but no money was ever used for those purposes. Instead, the money was siphoned off for personal use. In addition to that, the SEC also charged the registered crowdfunding portal, TruCrowd, and its CEO Vincent Petrescu, who placed the offerings on the portal’s platform. According to the SEC’s complaint, Robert Shumake, alongside associates Nicole Birch and Willard Jackson, conducted fraudulent and unregistered crowdfunding offerings through two cannabis and hemp companies, Transatlantic Real Estate LLC and 420 Real Estate LLC. The complaint alleges that Shumake and Birch raised $1,020,100 from retail investors through Transatlantic Real Estate, while Shumake and Jackson raised $888,180 through 420 Real Estate. Shumake, Birch, and Jackson allegedly diverted investor funds for personal use rather than using the funds for the purposes disclosed to investors.
Michigan-based SKYMINT, is buying 3Fifteen Cannabis and also closing its $70 million Senior Secured Term Loan from Tropics LP, an affiliate of SunStream Bancorp Inc., a joint venture initiative sponsored by Sundial Growers Inc. (Nasdaq: SNDL), and its $8 million equity investment from Merida Capital Holdings. The acquisition will bring Skymint’s workforce to 730 employees and a combined retail portfolio of 27 locations totaling 101,000 square feet, with an additional 18+in the 2021-2022 pipeline. The combined company will now have a dominant market share in four key Michigan regions: Grand Rapids, (4 locations), Greater Lansing (4 locations), Detroit / Metro Detroit (5 locations), and Ann Arbor (2 locations). In addition, it will have two indoor cultivation facilities totaling 77,000 square feet with a third indoor cultivation facility – totaling 184,000 square feet – due to come online next year and a 1,000-acre sustainable, sun-grown farm (Michigan’s largest outdoor cannabis farm).
Cannabis data and analytics specialist Headset just released its latest report comparing US medical and recreational cannabis market development, bearing results that reveal sales patterns and unifying trends across the industry. The report’s findings are grounded in the context of the predominant pattern of a three-step process in cannabis market development, including prohibition, medical access, and adult-use legalization.
Though there are exceptions to this evolution where markets leapfrog medical use and go straight from cannabis prohibition to adult-use legalization, flagship states like California, which approved medical use in 1996 but took another twenty years to allow adult-use cannabis, follow a more predictable pattern. The report compares California’s slower rollout to Illinois accelerated process, evident in its shorter six-year span between medical and recreational legalization.
In Other News
Dispense, a leading digital dispensary management platform, is announcing the completion of its $2M seed funding. The round of investment is led by NextView Ventures with NextView co-founder, Lee Hower, joining the Dispense board. Dispense is one of the fastest growing software companies in the cannabis space. The platform is currently used by dispensaries in five states, including Illinois, Michigan, Ohio, New Jersey and Massachusetts. Since its beta launch in August 2020, Dispense has processed over 1.5 million orders, with an order value of over $200 million with only two employees. Co-founders Kyla Moore and Tim Officer plan to use the funding to hire top talent, continue developing and enhancing their product, and scale their sales and marketing efforts.
Helix BioPharma Corp. (TSX: HBP), an immuno-oncology company developing innovative drug candidates for the prevention and treatment of cancer, announced that the company’s Chairman of the Board, Prof. Dr. Slawomir Majewski, will immediately assume the role of Interim CEO while the Company continues to identify and evaluate candidates.