Daily Hit Archives - Green Market Report

Kaitlin DomangueKaitlin DomangueDecember 5, 2019
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6min1510

Its time for your Daily Hit of cannabis financial news for December 5th, 2019.

 

On the Site

 

Greenlane Brings Keith Haring Artwork To The World of Cannabis

The company mostly known for Pax and Juul sales, Greenlane Holdings Inc.(NASDAQ: GNLN) is now producing a line of functional glassware with legendary graffiti artist Keith Haring’s work. The smoking accessories include small glass pipes, larger water pipes ashtrays and regular rolling trays.  The K.Haring Collection launches November 21, 2019, in Higher Standards stores and will be available online on November 25th at haringglass.com.

“As a longtime admirer and supporter of Keith Haring, his art, and his legacy, I am thrilled to introduce the K.Haring Collection,” said Sasha Kadey, Chief Marketing Officer of Greenlane and Creative Director for the K.Haring Collection. “The art world has long had an intertwined relationship with cannabis and has in many ways been instrumental in the advancement of the industry. The K.Haring Collection will help our mission to destigmatize and elevate the cannabis experience.”

Haring passed away in 1990 at the age of 31 in Manhattan from the AIDS disease. The Haring Foundation wants to continue to promote the artwork, but is also known for supporting not-for-profit organizations that help underprivileged children, as well as organizations involved in education, prevention, and care related to AIDS. Haring doesn’t have any cannabis images in his artwork, but his skateboard images are loved by the skateboard community which does support the cannabis community.

In Other News

Class Action Lawsuit Filed Against HEXO Corp.

 

The Schall Law Firm has announced a class action lawsuit has been filed against HEXO Corp., and encourages investors with losses in excess of $250,000 to contact them. The company is in hot water for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.

 

CBD Sparkling Water Company Makes a Splash in the Beverage World

 

Infuzed Brands is a zero-sugar, zero-calorie, all-natural CBD-infused sparkling water brand. The brand is blowing up on Instagram, and within a few short months, the product is now in shelves in over 100 independent retail stores across the United States. It is quickly growing into reaching the convenience store shelves, which is considered the “make or break” sector for emerging beverage brands.

 

Zenabis Stock Drops After Facility Fails EU Quality Inspection

 

Zenabis stock trading is down following reports that one of their facilities did not comply with the EU’s GMP requirements during an inspection last year. European Union regulators published a “statement of non-compliance with [GMP] good manufacturing practice” against Zenabis on November 27th. The inspection was conducted last December when it was determined that Zenabis did not meet the EU’s requirements.

 

 

 

 


Kaitlin DomangueKaitlin DomangueDecember 4, 2019
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5min1710

Its time for your Daily Hit of cannabis financial news for December 4th, 2019. 

On the Site

Banks Cleared For SARS Reports With Hemp Farmers

On Tuesday, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Financial Crimes Enforcement Network (FinCEN), and the Office of the Comptroller of the Currency issued a statement clarifying banking rules around hemp customers.

The key takeaway from the statement is that banks no longer need to file the onerous Suspicious Activity Report, known as SARS for hemp farmers. The statement said, “Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.”

Sunniva Racking Up Default Notices As Turmoil Continues

Sunniva Inc.  (CSE: SNN) (OTCQB: SNNVF) has been named in a lawsuit, along with its wholly-owned subsidiary, 1167025 B.C. Ltd., co in connection with loans made by Matrix Venture Capital Management Inc.  to Sunniva on August 28, 2019 and October 11, 2019, respectively, in the aggregate amount of $7 million. According to the company’s November 26 finance statement, it said that in June 2018, Sunniva, through its subsidiary 116, entered into a $3.4 million mortgage to finance the purchase of land for the greenhouse facility in Okanagan Falls, British Columbia. “The mortgage is repayable on October 31, 2019, and has an interest rate of 5% per annum. This balance has been reclassified to Liabilities associated with assets held-for-sale (note 7). The Company has repaid $400,000 as of September 30, 2019, but is currently in default on the remaining balance.

Separately, in the company’s lastest MD&A dated November 26, Sunniva said that on November 25, 2019, it received a 30-day notice of termination and a notice of default from SPCL “for items related to payment of outstanding balances and failure to meet certain conditions of the Build to Suit Lease. In addition, the Company received a notice of default from a promissory note holder for not applying a certain portion of the note proceeds to agreed-upon outstanding amounts.

Additionally, the company has had many of its executives resign for various reasons, and the stock fell another 13% to lately trade at 23 cents. The 52-week high was $4.30.

In Other News

Canopy Growth Launches CBD Consumer Line in the U.S.

Canopy Growth has quietly launched its hemp-derived CBD brand, First & Free, in the 31 U.S. states that allow such sales. Company spokesperson Jordan Sinclair says early signs are “positive” with some orders successfully placed.

Exactus, Inc. Announces Closing of $2 Million Convertible Note

Extractus, Inc., industrial hemp farmer and manufacturer of hemp-derived products, announced today the closing of the initial tranche of a $2 million senior secured convertible note financing from a single institutional investor. The total net proceeds from the note are approximately $1.94 million, after deducting the initial purchaser’s discount, commissions and estimated offering expenses. The note consists of three tranches where the initial financing consists of the issuance of a note in the principal amount of $833,333.33, to be followed by a $277,777.77 tranche upon the filing of an S-1 and concludes with the remaining $833,333.33 to be distributed pending the S-1 becoming effective with 25% warrant coverage priced at 105% of the closing price on the subsequent closings. 

 


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.


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.


StaffStaffNovember 26, 2019
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7min2230

It’s time for your Daily Hit of cannabis financial news for November 26, 2019.

On The Site

FDA

On Monday, the U.S. Food and Drug Administration has issued warning letters to 15 companies for illegally selling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act). The FDA also published a revised Consumer Update detailing safety concerns about CBD products more broadly. The FDA also indicated in the press release that it cannot conclude that CBD is generally recognized as safe among qualified experts for its use in human or animal food.

The warning letters sent to these companies were accused of using product webpages, online stores and social media to market CBD products in ways that violate the FD&C Act, including marketing CBD products to treat diseases or for other therapeutic uses for humans and/or animals. The FDA also noted that some of the products were marketed towards infants and children, which could have adverse reactions. Other violations include marketing CBD products as dietary supplements and adding CBD to human and animal foods.

MedMen

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) reported first fiscal quarter revenue of $44 million, up 105% year-over-year and 5% sequentially. The company also reported an eye-popping net loss of $82 million. MedMen delivered an Adjusted EBITDA loss of $22.2 million for the quarter.

Approximately $7.4 million of rent expense was not included in Adjusted EBITDA for the quarter due to the application of IFRS 16 Leases. Adjusted EBITDA loss under the previous methodology would have been $29.6 million compared to a $39.4 million loss in the previous quarter.

“We entered Fiscal 2020 on a mission to build a more nimble and financially flexible MedMen,” said Adam Bierman, MedMen co-founder and chief executive officer. “As we right-size our organization and implement an intensified focus on free cash flow generation, our business will become more efficient, in turn allowing us to better serve our stakeholders. Through the successful execution of these goals, we expect MedMen will be EBITDA positive by the end of calendar year 2020.”

Green Growth Brands

Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) reported its results for fiscal first-quarter 2020 ending September 28, 2019. Revenues for the period totaled $12.7 million, a 77% increase over the previous quarter. However, the company delivered a whopping net loss of $30 million versus last year’s net loss of $2.8 million for a net loss of 15 cents per share over last year’s net loss per share of three cents per share.

Harvest One

Harvest One Cannabis Inc. (TSX-V: HVT)(OTCQX: HRVOF) announced a net revenue of $4.1 million for the three months ending September 30, 2019, representing a 34% increase over the previous quarter, and a 142% increase over the same period in 2018. The company also reported a net loss of $5.2 million, which was slightly less than last year’s net loss of $5.7 million for the same time period.

Slang

SLANG Worldwide Inc. (CNSX: SLNG) reported its 2019 third-quarter revenue in Canadian dollars of $9.3 million which rose 29% over the $7.2 million of revenue produced in the second quarter of 2019. It easily overshadowed last year’s net revenue of $1.6 million for the same time period.  The company said that the increase reflected ongoing business strength in core markets and a favorable shift in product mix, including accelerating sales of premium products in the SLANG portfolio.

Slang also delivered a net income of $0.4 million in third-quarter versus net income of $17.5 million in the second quarter.  The company reported a net loss of $16 million in 2018 for the same time period.

In Other News

Origin House

CannaRoyalty d/b/a Origin House (CSE: OH)(OTCQX: ORHOF) has closed its previously announced non-brokered financing. In connection with the Financing, Origin House issued approximately 9,800,000 common shares of Origin House at a price of C$4.08 per Common Share for aggregate net proceeds of approximately C$39,600,000.

TGOD

The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) (US:TGODF) entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. to purchase, on a bought deal basis an aggregate of 29,334,000 units at a price of $0.75 per Unit for aggregate gross proceeds to the Company of approximately C$22.0 million.

 

 


StaffStaffNovember 25, 2019
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7min1620

It’s time for your Daily Hit of cannabis financial news for November 25, 2019.

On The Site

Organigram

Organigram Holdings Inc. (OGI) (OGI) reported that its gross revenue grew to $19.2 million for the fourth quarter ending August 31, 2019, versus $3.1 million for the fourth quarter in 2018. The net loss for the 2019 fourth quarter was $22 million versus last year’s net income of $18 million for the same time period. The larger loss was due to “non-cash fair value changes to biological assets and inventories.”

For the full year, Organigram delivered net revenue of $80.4 million, which grew 547% over 2018’s $12.4 million. The net loss for 2019 was $9.5 million versus 2018’s net income of $22.1 million.

Four Biggest Fibs

The Facilities Are Fully Funded

On Oct. 9, 2019, The Green Organic Dutchman (OTC: TGOD) said in a press release that it was updating the market on credit financing. In the statement, it noted that “The Company may revise the construction schedule for its Ancaster and Valleyfield projects if it is unable to obtain sufficient financing on reasonable terms, within the required timeframe. There can be no assurance that this review will result in the completion of any financing transaction.” Basically, TGOD said it needed money to finish the projects as planned.

Business on a Budget

Guest Post by Joseph Collins, Content Director at The Amsterdam

Ever since states began to legalize medical and recreational marijuana, the cannabis business is booming. Eleven states and the District of Columbia have passed laws making recreational marijuana use legal. Another 22 states have laws legalizing medical marijuana. The Farm Bill of 2018 legalized hemp for industrial purposes, including the production of CBD oil.

It is not too late to get in on the profits by starting your own cannabis business. If you’re thinking that too much startup capital is needed, then take a look at these cannabis entrepreneurs.

In Other News

MJardin

MJardin Group, Inc. (CSE: MJAR) (OTCQX: MJARF), a leader in premium cannabis production, today announced its financial and operating results for the three and nine-month periods ending September 30, 2019. Revenue of $7.6 million, includes $0.8M contribution from Cheyenne since acquisition date; Generated positive Adjusted EBITDA of $0.5 million; Sequential revenue growth from AMI facility of 47% compared to the prior quarter.

”The third quarter results reflect another period of building out size and scale across our operational platform, which as expected comes with challenges in any business, however we continue to successfully tackle these issues as we execute against our strategic plans which are centred around growth and profitability in 2020,” commented Pat Witcher, CEO of MJardin. “We further reduced SG&A and have decreased those costs by 45% compared to Q2 2019. This allows us to focus on and effectively allocate resources to developing our product lines within Health Canada’s upcoming regulations around extraction, edibles and topicals. We continue to invest in these business lines on both sides of the border. Responsible deployment of capital to maximize shareholder value remains our top priority as we grow our operational footprint with accelerated revenue growth.”

GrowGeneration

GrowGeneration Corp. (NASDAQ: GRWG), the largest chain of specialty retail hydroponic and organic garden centers, with currently 25 locations, is pleased to announce that its common shares have been approved for listing on the Nasdaq Capital Market. GrowGeneration Corp. common shares will begin trading on NASDAQ on December 2, 2019 under the trading ticker symbol “GRWG.”

“This up-listing to NASDAQ is a major corporate milestone and reflects the financial performance of our Company. As the premier hydroponic supplier in the country, we continue to focus on expanding the number of garden centers, increasing our commercial portfolio of customers, focusing on the cutting-edge products, while expanding revenue and EBITDA. We believe our NASDAQ listing will increase long-term shareholder value by improving awareness, liquidity, and appeal to institutional investors” said Darren Lampert, CEO of GrowGeneration Corp.

True Leaf

True Leaf Cannabis Inc.  (CSE: MJ) (OTCQX: TRLFF) (FSE: TLA) has secured licenses from Health Canada to cultivate, process and sell cannabis for medical purposes pursuant to the Cannabis Act for its 18,000 square foot True Leaf Campus facility in Lumby, British Columbia.

The license allows True Leaf to begin cultivating, processing and selling medical cannabis from its facility immediately and to produce alternative cannabis products such as edibles, topicals, and capsules. True Leaf Campus sits on a 40-acre site of industrial zoned land wholly owned by True Leaf.

“Today marks an important milestone for True Leaf as becoming a licensed producer helps support the continued development of our therapeutic pet care products,” said Darcy Bomford, Founder and Chief Executive Officer of True Leaf. “Our facility is now licensed and meets EU GMP and HACCP standards. This is required for the ‘Cannabis 2.0’ market in Canada and also opens the door to export cannabis to the booming European market.”


Kaitlin DomangueKaitlin DomangueNovember 21, 2019
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3min2800

Its time for your Daily Hit of cannabis financial news for November 21st, 2019.

 On the Site

Tilt Secures More Funding, Not Out Of The Woods Yet

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has closed an additional private placement of $10.2 million of senior secured notes from a syndicate consisting of existing shareholders and new investors, bringing to the total amount of the facility to $35.8 million, up from the previously announced maximum of $35 million. While Tilt has been quick to note that the company has reported net income for the quarter, unlike many other cannabis companies, it still isn’t completely out of the woods. Canaccord Genuity analyst Bobby Burleson pointed out that the company will continue to face vape headwinds. Jupiter is 70% of the company’s revenue and while sales have rebounded, Burleson said he expects the company crisis to continue to have an effect on fourth-quarter sales. Especially the ban that was recently lifted in Massachusetts.

In Other News

 GW Pharmaceuticals Stock Price To Recover After Adverse Effects Of Cannabis Collapse And Speculators

GW Pharmaceuticals produced excellent third-quarter results because of the steep decline in stock prices. There were some unrealistic expectations by some observers going into Q3 earnings, but the company is a strong buy for long-term play for active investors.

Why TD Ameritrade, HEXO, and L Brands Jumped Today

Despite the recent turbulent nature of cannabis stocks, some companies still gained. TD Ameritrade, HEXO, and L Brands were among the top performers. TD Ameritrade’s shares climbed 18% after investors learned they may be a possible acquisition target. HEXO saw a 33% jump after the judiciary committee voted to send legislation to the full chamber that would take cannabis off a list of illegal controlled substances. HEXO, in particular, has been hit hard with the illegalities surrounding cannabis lately, so investors will have a lot to gain with the company if the laws change. L Brands’ shares rose 10%, despite reporting tepid results from the third quarter.

 

 

 


Kaitlin DomangueKaitlin DomangueNovember 20, 2019
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8min3230

Its time for your Daily Hit of cannabis financial news for November 20th, 2019.

On the Site

House Judiciary Committee Approves MORE Act

In a 24-10 vote, the House Judiciary Committee approved the MORE Act that would effectively end marijuana prohibition on Wednesday. This is the first time that a congressional committee has approved a bill to make cannabis legal.

The Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act was sponsored by House Judiciary Committee Chairman Jerry Nadler (D-NY) and would federally decriminalize and deschedule cannabis. In addition to that, the MORE Act contains strong social equity provisions with an emphasis on restorative justice for communities most impacted by cannabis prohibition.

TerrAscend Delivers Rising Revenue, Rising Expenses

TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF)  reported that its third-quarter for 2019 increased 53% sequentially to $26.8 million from $17.6 million in the second quarter. It was a large increase over the $1.8 million delivered in the third quarter of 2018.  All figures are reported in Canadian dollars. The company attributed the increase to higher overall sales in Canada as well as strong sales in the U.S. Late in the third quarter, TerrAscend acquired Ilera Healthcare, the owner of one of five fully vertically integrated licenses in the State of Pennsylvania.

Harvest Health Reports Earnings, New Financing, Changes CannaPharmacy Deal

Harvest Health & Recreation Inc. (CSE: HARV)(OTCQX: HRVSF) reported total revenue for the third quarter of 2019 of $33.2 million, an increase of 197% from $11.2 million in the third quarter of 2018. This was an increase of 25% sequentially. The net loss was $39.1 million for the quarter, which the company attributed to the cost of investments to support its growth initiatives, disclosed acquisitions and planned expansion. It was also announced that Harvest and CannaPharmacy, Inc. agreed to revise their pending transaction. “Under a new binding agreement, Harvest and CannaPharmacy have agreed to terminate their current agreement whereby Harvest would have acquired CannaPharmacy’s right to own or operate cannabis licenses in Pennsylvania, Delaware, New Jersey, and Maryland.”

In Other News

Green Thumb Industries Reports Increased Third Quarter Revenue 

GTI increased its 2019 third-quarter revenue increased 296% year-to-year to $68 million. The company’s EBITDA and adjusted operating EBITDA was $1.6 million and $14.1 million, respectively. Green Thumb Industries had a reported net loss of $17.1 million, as compared to the net loss of $22.2 million in 2019’s second quarter. Their current assets totaled $123.8 million and included cash and cash equivalents of $66.1 million, while total outstanding debt was $96.9 million. 

TILT Holdings Reports Earnings

TILT Holdings Inc. (CSE: TILT) (OTCQB: TLLTF) reported revenue of $46.1M in the third quarter of 2019, an 18% increase from the second quarter of 2019. The company also posted its first-ever positive adjusted EBITDA quarter, $2.7M, up from negative ($4.0M) in the second quarter of 2019. Third-quarter net income was $26.1M, compared to a net loss of ($48.9M) in the second quarter of 2019. When compared to the second quarter of 2019, the net income improvement reflects revenue growth, improved margins, and SG&A reduction to cost initiatives as well as a reduction in non-cash stock compensation expense due to forfeiture of legacy stock options.

iAnthus Earnings

iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) reported revenues of $22.3 million, up 16% from the prior quarter. The company recorded a third-quarter net loss of $15.3 million, compared to a loss of $9.3 million in the prior quarter. The company maintained expense discipline in the quarter, and began to see the results of planned procurement and expense control initiatives; adjusted EBITDA loss net of biological assets was $3.6 million, compared to a loss of $6.9 million in the prior quarter.

Canopy Growth Sued Again by Rosen Law Firm

Rosen Law firm filed a class-action lawsuit against Canopy Growth. The lawsuit seeks to recover damages for Canopy investors under the federal securities laws. According to the lawsuit, Canopy made false claims or failed to disclose that the company was experiencing a low-supply issue with its soft gel and oil products. 

 


Kaitlin DomangueKaitlin DomangueNovember 19, 2019
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9min3220

Its time for your Daily Hit of cannabis financial news for November 19th, 2019.

 

On the Site

 

HEXO Admits To Growing Cannabis In Unlicensed Room

 

HEXO released a statement explaining they were unknowingly growing cannabis in an unlicensed area of their facility. They did not know about this section of their facility being an unlicensed portion until their acquisition from Newstrike Brands. They quickly notified Health Canada and they were satisfied with the company’s actions to remedy the situation.

 

Canopy Growth Gets Big New York Tax Break

 

Canadian cannabis producer Canopy Growth is set to receive a large tax break for their new Kirkwood, New York facility. Canopy will receive a standard 15-year payment-in-lieu-of-taxes deal, qualifying for a 39% reduction in property taxes for the first five years of the agreement. When all is said and done, their tax break will equate to $1.7 million.

 

Merida Capital, Minority Cannabis Business Assoc. Announces Winners of Accelerator Program

 

Minority Cannabis Business Association and Merida Capital Partners announced the winning recipients of investmentthrough the Inclusive Industry (“i2”) Accelerator, which will deploy $500K initially to fast-track the development of five minority-owned businesses. MCBA and Merida launched i2 earlier this year to accelerate the development of minority-owned businesses in the cannabis and hemp industry by creating a meaningful executive mentorship program for underserved communities. The recipients are: Vega Holdings, High Road, Higher Learning Institutions, James Henry, and Canna Bistro.

 

Money Moves: Flowr, Meta Growth

 

The Flowr Corporation (TSXV: FLWR)(OTC: FLWPF) reported that it has closed its previously announced credit facility from a syndicate of lenders led by ATB Financial and including Farm Credit Canada. The $25 million facilities consist of a $24.5 million recapitalization term facility and a $500,000 revolving operating credit facility.

National Access Cannabis Corp (TSXV: META) d/b/a Meta Growth said that it has reached a new agreement to extend its $9,000,000 loan from Opaskwayak Cree Nation to December 31, 2022. The original loan was set to mature on December 14, 2019.  As one of META’s largest shareholders, owning approximately 10.8 million shares, OCN has agreed to extend the maturity of the Loan until December 31, 2022, at an interest rate of 10% per annum, and an annual administration fee of $225,000.

Trulieve Delivers Another Solid Quarter of Earnings

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) released its financial results for the third quarter of 2019 ending September 30, 2019, with revenue of $70.7 million, an increase of 22% sequentially and an increase of 150% year-over-year. This beat analyst estimates by $5.09M. The company also delivered a net income of $60.3 million for the quarter, which was higher than the second quarter’s net income of $57.5 million.

Executive Spotlight: Diana Anglin

Diana Anglin is the chief operating officer of CannAmerica Brands Corp. She has been there for a year and a half. CanAmerica Brands Corp’s mission “to maximize the value of our brands by promoting, marketing and licensing the brands through various distribution channels, including to dispensaries, wholesalers and distributors in the United States and internationally.” CannaBrands owns a portfolio of brands within the cannabis space.

In Other News

Aurora Cannabis Suffering

Aurora reported fiscal 2020 Q1 results that showed a 24% drop in revenue and a 30% drop in volumes. The company also suspended construction at two of its largest greenhouses, Nordic 2 and Aurora Sun. Aurora Cannabis lowered its conversion price 2020 converts to avoid principal repayment and preserve cash. The general outlook for the quarter is seen as negative and investors may start to question its viability.

 

Cannabis Stocks Targeting the Infused Beverages Market

 

Canada was initially denied the right to enjoy cannabis-infused treats, but now things are turning around. The national market will now see a wave in cannabis-infused edibles, specifically in beverages. Some of the biggest names in the beverage industry have shown interest or a solid plan to jump into the market including Coca-Cola and Arizona Beverage Company. Most of the major brewers like AB InBev, Molson Coolers, and Constellation Brands have partnered with cannabis producers to make plans for cannabis-infused beers. The global cannabis beverage market is projected to be worth US$5.04 billion by 2026.

 

Big Day for Cronos Group After Altria Filing

 

Altria (NYSE:MO) added more than 4M shares to its Cronos (NASDAQ:CRON) stake, according to a filing.

 

 


StaffStaffNovember 18, 2019
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9min2590

It’s time for your Daily Hit of cannabis financial news for November 18, 2019.

On The Site

MedMen

MedMen Enterprises Inc. (MMEN.CN) (MMNFF) claimed to be the unicorn of marijuana companies when the California-based business went public in May of 2018. Now just 18 months later, it has a market cap of $170 million, according to Yahoo Finance, and is being forced to dramatically curtail its plans.

On Friday, the company said it was taking several steps to achieve profitability including laying off of 190 employees or 20% of its workforce, cutting back on store openings and selling assets.

In addition to the employee layoffs, which the company said would save $10 million, MedMen is also selling its interest in Treehouse REIT for net proceeds of $14 million. So far, its gotten $7 million and has agreements to sell the remainder. 

Sunniva

Sunniva Inc. (OTC: SNNVF) stock plunged over 40%  to lately trade at 45 cents after the company announced that President Kevin Wilkerson would resign. This comes just one week after the company’s Chief Financial Officer also resigned.

Wilkerson also resigned from his position as President and Chief Executive Officer of Sun CA Holdings effective December 2. The company said the resignation was for personal reasons and a replacement has not been named. It follows last week’s announcement that CFO Dave Lyle was resigning, also for personal reasons, and David Weinmann has been appointed interim CFO. In addition to that, Michael Barker who was on the board of directors also resigned.

Acreage Holdings

Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.U) (OTC: ACRGF) is buying New Jersey’s  Compassionate Care Foundation, Inc. which is a vertically integrated cannabis nonprofit corporation. The deal is subject to state approval and the amount of the deal was not disclosed. However, the state of New Jersey did state that Compassionate Care reported $4.9 million in revenue in 2018, badly trailing Curaleaf’s $19 million in revenue for 2018.

The Biennial report also stated that when looking at total inventory, neither Greenleaf Compassion Center nor Compassionate Care Foundation eclipsed 200 lbs of total product from June to December of 2018. “During the study period, Compassionate Care Foundation had a range of between 12 and 102 lbs of product onhand and an average of 41 lbs, while Greenleaf had a range between 5 and 12 lbs of product on hand and an average of 8 lbs on-hand.

In Other News

Ayr

Ayr Strategies Inc. (CSE: AYR.A)(OTCQX: AYRSF) is reporting financial results for the three and nine months ended September 30, 2019. Total revenue increased 19% to $32.1 million compared to $26.9 million. Loss from operations was $10.7 million compared to $20.1 million. Adjusted EBITDA increased 16% to $8.7 million compared to $7.5 million.

“We are extremely pleased with how well our business is executing after just four months of combined operations,” said Jonathan Sandelman, CEO of Ayr. “In that brief time, we have made considerable progress on key initiatives in both the Western and Eastern U.S. – organic growth has exceeded our expectations, our retail stores are among the most productive in the industry, and our wholesale business has become a substantial contributor to the top and bottom line.

“In Nevada, we continued to generate margin improvements from vertical integration of the four companies we acquired. In fact, our dispensaries are now sourcing even more products internally than they were just a few months ago, and our cultivation expansion in Nevada remains on track for completion in the first half of 2020.  In Massachusetts, our wholesale business continued to gain momentum during the quarter as our monthly revenue has nearly tripled since closing our qualifying transaction in May.

Cannabis Sativa

Cannabis Sativa, Inc. (OTCQB:CBDS) reported earnings for the quarter ending September 30, 2019 year-to-date results and certain comparisons to the same period in 2018.

For the nine-month period ended September 30, 2019, revenue increased 72%, to $705k, from a year ago while gross margin improved 71% from the comparable 2018 period ($413k vs. $241k), at 59% of revenue. PrestoDoctor’s patient growth and geographic expansion were the primary drivers for the improved revenue and margins. Operating loss for the nine months ended 9.30.19 was $1.7 million, an improvement of $1.4 million (42%) from the same period in the prior year. The Company continues to see benefits of its aggressive cost control program, implemented two years ago. Operating costs (SG&A) are down 36% from YTD Q3 2018, and down 66% from YTD Q3 2017, primarily due to lower professional and consulting fees.

Freedom Leaf

Freedom Leaf, Inc.  (OTCQB: FRLF), a first in class hemp consumer packaged goods company that recently acquired Green Lotus™ to build its position as a leading provider of natural cannabinoid-rich hemp products, announced today that it closed a $5 million convertible note financing led by an affiliate of Merida Capital. David Goldburg, Chairman of the Board, and Dave Vautrin, Independent Director, invested $125,000 and $67,000, respectively, in the convertible note financing. Proceeds from the financing will primarily support the Company’s production, marketing, and sales efforts as it continues to build its position as a leading CBD and hemp company servicing the North American and Mexican markets.

One World Pharma

One World Pharma Inc. (OTC: OWPC), “OWP,” a fully licensed pure-play cannabis and hemp ingredient producer in Colombia, is pleased to announce that its common stock has been uplisted to the OTCQB platform, effective immediately.

Acceptance to the OTCQB will increase liquidity in the Company’s common stock and provide shareholders with greater access to the majority of broker-dealers who trade stocks on the OTCQB. Historically, ascension to the OTCQB has often been met with enhanced liquidity and visibility. The OTCQB is a venture market designed for early-stage and developing U.S. and international companies.

“We are most pleased to have reached this milestone and to have been accepted to trade on the OTCQB platform,” said Craig Ellins, Chief Executive Officer, One World Pharma. “Uplisting to the OTCQB allows us to have our corporate successes potentially recognized by a far greater constituency of brokers, analysts and individual investors and ultimately seek a listing on a major exchange.”



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