Financial Archives - Page 2 of 22 - Green Market Report

Debra BorchardtDebra BorchardtJuly 13, 2020
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3min7290

 Jushi Holdings Inc. (OTCQX: JUSHF) announced $15.25 million in debt financing. To date, The company said it has received cash proceeds of $16.325 million and additional binding subscriptions, for a pro forma total issuance of $17.425 million of 10% senior secured notes and warrants to acquire a subordinate voting share. The company also received non-binding indications of interest for up to an additional $10 million of financing.

The money will be used for the cash portion of a previously announced Pennsylvania grower-processor permit holder transaction.  Last month the company said it was planning on buying Vireo Health’s (OTC:VREOF) Pennsylvania Medical Solutions in an effort to strengthen its position in the state’s market. Jushi was to pay Vireo $16.3 million in cash, a $3.8 million seller note, and assume a $17 million facility associated with a long-term lease obligation. The $37 million deal is expected to close by the end of August 20.

Debt Terms

The company said in a statement that all Notes would mature on January 15, 2023, and will bear interest of 10.0% per annum payable in cash quarterly. Jushi’s obligations under the Notes are secured by the assets of Jushi and certain of its subsidiaries (subject to certain exclusions) and are also guaranteed by certain subsidiaries of the Company and rank pari passu with the currently outstanding 10% senior secured notes of the Company.  In connection with the Offering, the purchasers of the Notes will also receive Warrants to acquire subordinate voting shares of the Company at 75% coverage with an expiry date of December 23, 2024, at an exercise price equal to US$1.25 (~CAD$1.70 as of 7/10/20).  The Warrants contain a cash-less exercise (net settlement) option available 12 months after issuance.

Jushi’s Chairman & CEO Jim Cacioppo subscribed for US$1.5 million of the Notes with other insiders and management subscribing for US$3.475 million of the Notes.


StaffStaffJuly 8, 2020
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2min9930

Tissue culture technology company, Conception Nurseries has raised more than $15 million with the addition of approximately $12 million in its Series A round. The company said that the proceeds would be used to operationalize its facility in Sacramento, CA.

The raise was announced by Viridian Capital Advisors, who through broker-dealer, Pickwick Capital Partners, led the financing round.

Kevin Brooks, Conception’s CEO said, “Our focus at Conception is not only to provide a far superior plant when compared to traditional propagation but to do so at or below what it would cost a cultivator to do in house. The only way to achieve this is through scale and automation. We conducted a global search for partners to bring state-of-the-art, industrial agriculture technology to the U.S. cannabis industry. We thank the team at Viridian Capital for their hard work and perseverance in completing our Series A financing.”

Conception’s goal is to  solve some of the cultivators’ trickiest problems by bringing tissue culture technology (micropropagation) to the cannabis industry. The company said in a statement that growers have been dependent on “mom plants” to produce “clones” that deliver inconsistent harvests with diluted and uncontrollable traits. “This results in cultivators being unable to accurately forecast production and end-users being unable to depend on a consistent experience. Tissue culture technology allows Conception to quickly mass-produce identical, disease-free plantlets with customized and consistent profiles. This reduces growers’ operational risks and costs while increasing yields. Conception’s plants will be sold at (or even below) what it costs cultivators to produce them in-house.”

Scott Greiper, President and founder of Viridian Capital, stated, “Conception Nurseries, led by its CEO, Kevin Brooks, is at the forefront of the adoption of tissue culture technology as the standard for cannabis cultivators. Conception’s technology, combined with Kevin Brooks’ track record as a growth-company CEO, is why we were excited to represent Conception as a Viridian client.”

 


StaffStaffJune 19, 2020
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4min7680

Columbia Care

Columbia Care Inc.  (OTCQX: CCHWF) said it expects to complete the second tranche of its previously announced $50.0 million financing with the offering of an aggregate principal amount of $15.7 million in 5.00% senior secured convertible notes due 2023. $12.8 million of escrowed funds are expected to close on or by June 22 with the remaining binding commitments closing in early July.

“Columbia Care continues to demonstrate its ability to access the institutional capital markets at attractive terms despite incredibly challenging macroeconomic conditions, validating the confidence that institutional investors have in our company and team,” said Nicholas Vita, CEO of Columbia Care. “Since the start of 2020, including these financings, Columbia Care has raised over US$65 million of new capital, minimizing dilution, enhancing our liquidity position, de-risking our outlook and enabling us to execute on our growth strategy. We will continue to allocate resources to our highest performing markets where opportunities exist to drive incremental profitability and improve our position as the leading nationwide operator. Columbia Care is committed to being a disciplined steward of capital and remains focused on creating shareholder value as we transition to adjusted EBITDA positive in 2020.”

The company said that once it closes the additional $19.7 million, the aggregate financed amount of $54.1 million will exceed Columbia Care’s previously announced target of $50 million. This amount excludes proceeds from the company’s anticipated second and third sale leaseback transactions, expected to close in the third quarter. Also excluded is the company’s previously announced sale of a 10% minority interest in its non-US business to Avalon Pharmaceuticals for $11 million which closed earlier this year and is funding in tranches through the end of the third quarter.

Zenabis

Zenabis Global Inc. (OTC:ZBISF) reported that it has entered into an agency agreement with a syndicate of agents co-led by AltaCorp Capital Inc. and Eight Capital and including Canaccord Genuity Corp., Haywood Securities Inc. and PI Financial Corp. for the sale of up to 157,643,875 Units at a price of $0.13 per Unit for gross proceeds of up to $20,493,704. In addition, Zenabis has granted the Agents an over-allotment option, exercisable in whole or in part, for a period of 30 days following the closing of the Offering, to purchase an additional 15% of the number of Units sold in the Offering. If the Over-Allotment Option is exercised in full, the total gross proceeds to Zenabis will be $23,567,760.

Zenabis said it plans to use the net proceeds of the Offering for general working capital and corporate purposes, the partial repayment of subordinated secured notes, the partial repayment of the Company’s unsecured convertible debentures, the partial or full repayment of it’s $7,000,000 third tranche of senior secured debt and the payment of an extension fee on the remaining balance of Tranche 3, if applicable.

 


StaffStaffApril 3, 2020
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12min14630

Horizons ETFs Management Inc. has completed the quarterly rebalance of the constituent holdings of the Horizons Marijuana Life Sciences Index ETF (TSX:HMMJ) and the Horizons US Marijuana Index ETF (NEO:HMUS).

This quarter, four companies were removed from HMMJ’s portfolio:

Deletions

Company Name

Ticker

Exchange

Abacus Health Products Inc.

ABCS

Canadian Securities Exchange

Agraflora Organics International Inc.

AGRA

Canadian Securities Exchange

Flower One Holdings Inc.

FONE

Canadian Securities Exchange

CBDMD Inc.

YCBD

New York Stock Exchange

Performance Update as of March 31, 2020,

1
Month

3
Month

6
Months

YTD

1
Year

Annualized
Since Inception**

HMMJ

-15.28%

-28.36%

-45.68%

-28.36%

-69.05%

-9.55%

NAMMAR Index

-17.27%

-32.10%

-43.98%

-32.10%

-69.91%

-15.89%

TX60AR Index

-15.30%

-18.48%

-16.49%

-18.48%

-11.68%

-0.79%

HMUS REBALANCE

Launched in April 2019, HMUS is the world’s first U.S.-focused marijuana index ETF. HMUS seeks to replicate, to the extent possible, the performance of the US Marijuana Companies Index, net of expenses. This index is designed to provide exposure to the performance of a basket of publicly-listed companies having significant business activities in, or significant exposure to, the marijuana or hemp industries in the United States. Constituents of this index are selected from Canadian and U.S. exchanges. While some securities may be listed on major North American exchanges, the majority of the securities currently trade on North American exchanges that include but are not limited to the Canadian Securities Exchange and the Aequitas NEO Exchange.

This rebalance resulted in the removal of six companies from the portfolio:

Deletions

Company Name

Ticker

Exchange

Abacus Health Products Inc.

ABCS

Canadian Securities Exchange

Body & Mind Inc.

BAMM

Canadian Securities Exchange

Ignite International Brands

BILZ

Canadian Securities Exchange

Green Growth Brands Inc.

GGB

Canadian Securities Exchange

Plus Products Inc.

PLUS

Canadian Securities Exchange

CBDMD Inc.

YCBD

New York Stock Exchange


Kaitlin DomangueKaitlin DomangueFebruary 27, 2020
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3min16511

Innovative Industrial Properties, Inc. (NYSE: IIPR) reported its earnings from the fourth quarter yesterday, exceeding analysts’ expectations. The quarter ended on December 31st, 2019. 

The cannabis real estate company reported total revenue of approximately $17.7 million in Q4, an astonishing 269% increase from the prior year’s quarter. This is an amazing jump from the companies total revenue of just $4.8 million in Q4 of 2018. 

According to IIRP’s report, since October of 2019, the company has acquired 20 properties and executed five lease amendments across various states in the U.S., totaling an aggregate investment of approximately $308.8 million. New tenant relationships include key cannabis players like Cresco Labs and Green Thumb Industries, and the company expanded existing relationships with companies like Trulieve and PharmaCann.

Since the addition of company properties, IIP has grown its portfolio from 11 properties to an impressive 51 properties since January 1st, 2019. The total properties have grown from approximately 1.0 million square feet in nine states, to roughly 3.2 million rentable square feet across 15 states. IIP’s total investment in its property portfolio has increased by 307%, with the aggregate amount going from $167.4 million to $680.7 million. The company acquired multiple properties in Illinois, Pennsylvania, Michigan, and Ohio, with the rest being in California, Colorado, Massachusetts, Arizona, and North Dakota. 

The total net income available to the company’s common share stockholders accumulated a total of $9.6 million for the total, with each diluted share representing $0.78. Adjusted funds from operations totaled $14.3 million, or $1.18 per diluted share. The adjusted funds from operations represented a 293% increase and an increase of 211% from the previous quarter’s earnings, respectively.  

Following the end of the quarter, the company completed an underwritten public offering of 3,412,969 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 445,170 shares, resulting in gross proceeds of approximately $250.0 million. IIP also established an “at-the-market” equity offering program, issuing shares of common stock from September until February. According to the company, the net proceeds from that issuance totaled approximately. $184.8 million.

The company paid a quarterly dividend of $1.00 per common share, on January 15th to stockholders, positioning the company at an increase of 186% from the prior year’s quarter. 

Innovative Industrial Properties, Inc. will conduct a conference call and webcast at 10:00 a.m. Pacific Time on Thursday, February 27, 2020, to discuss IIP’s financial results and operations for the fourth quarter. 


Kaitlin DomangueKaitlin DomangueFebruary 10, 2020
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4min20792

Cannabis, to some, is seen as a risky market. Bankers, the government, and society, in general, all have their own hesitations with the industry. This rings true for investors, too.

Some financial experts are adamant about the importance of investing in cannabis. Those who believe in the industry feel it has a long life ahead of it. 

Others say beware of investing in cannabis at all costs. Due to the “trendiness” of the industry, they are certain it will die out. Not to mention, cannabis’s federally illegal substance is a turn-off for many.

2019 was a rough year for cannabis. Stocks plummeted, just one hurdle of many in the year, and sent some potential investors running. Even big players Aurora Cannabis (ACB), Canopy Growth (CGC) (WEED), and Cronos Group (CRON) fell 52.7%, 32.6%, and 37.4%, respectively, as of a Market Realist article published last November.

Capital in cannabis seemed, and was, tight.

Green Market Report had the pleasure of catching up with Jon Trauben, a partner of Altitude Investment Management, to try and decipher exactly what investors are looking for before they put their coins into cannabis in 2020.

Altitude Investment Management has collaborated with companies like Canndescent, The Green Organic Dutchman, and Grassroots.

Trauben explains that in order for the purse strings to loosen up again in 2020, investors need to see companies “meeting or exceeding their business plan and financial projections” for 2-3 quarters of the year. He goes on to say that cannabis companies need to first prove its ability to operate profitably and efficiently before investors want to take the plunge.

He adds that growth-stage companies with a proven strategy who are on the way, or already at, a profitable point in their business are the current focus for investors. “Scale, a moat and a strong management team are absolutely key attributes”, he says.

Yale Insights interviewed two Yale alumni in November of 2018. The pair formed Privateer Holdings, a private equity firm dedicated to cannabis. They explain in order for their company to make an investment, they “spend a lot of time looking at risk management, how these companies operate and brand.” They add that their company wants to see brands not focused on one state alone, but rather be a brand that can be successful in multiple states, and even countries.

Trauben sheds light on what he anticipates as a cold point for cannabis investors in 2020. He says that Altitude Investment Management believes hemp cultivation will go through a “boom and a bust cycle.” He reiterates that “the basic companies participating and servicing the industry that are executing their business plan” are the hottest points investors are searching for. “I know that’s not sexy,” says Trauben, “but it is fundamental.”


Kaitlin DomangueKaitlin DomangueFebruary 6, 2020
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6min10190

It’s time for your Daily Hit of cannabis financial news for February 6th, 2020. 

On the Site

Planet 13 Cafe Is Paying Off As Sales Stay Strong

 

Las Vegas-based cannabis dispensary Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) reported record-breaking January sales driven by strong traffic and attributed it to the company’s newly opened cafe and event space. The company said that the average ticket size was approximately $100. Planet 13 said that January revenue was ~10% higher than the seasonally slow months of November and December.

CBD Craze Sparks ‘Weed Washing’ Trend

 

Remember the term ‘pinkwashing’? Where companies slapped a pink ribbon on just about anything and claimed to be donating lots of money to breast cancer research? It’s happening again, but this time it’s in the cannabis industry.

“Weed washing” is a disturbing trend that appears to be most dominant in the beauty industry and refers to the act of adding hemp oil that does not contain CBD or only contains a minuscule, non-therapeutic amount to a product in order to capitalize on CBD’s popularity and high price point. 

Psychedelic Clinic Company Field Trip Raises $8.5 Million

 

Psychedelic clinic company Field Trip Psychedelics Inc. closed its oversubscribed Series A financing round. The financing, which was completed through a private placement, raised $8.5 million for the company.

The company said the funds will be used to execute the initial stages of Field Trip’s strategic plan to build out the world’s first network of medical centers focused exclusively on psychedelic-enhanced psychotherapy. In addition to that, the financing will help fund the final construction of its research and cultivation facility at the University of the West Indies in Jamaica. 

South Carolina Kicks Off Hemp Farming Season

 

The South Carolina Department of Agriculture (SCDA) said that it will begin accepting applications for hemp farming, handling and processing permits for the 2020 growing season starting Feb. 1, 2020. Now in its third year, South Carolina’s hemp farming program has grown from 20 farmers in 2018 to 114 permitted farmers and 43 processors at the end of the 2019 season. 

Requirements to receive a hemp farming permit include:

  • Proof of South Carolina residency
  • Criminal background check
  • $100 nonrefundable application fee and $1,000 permit fee
  • GPS coordinates of all locations on which hemp will be grown
  • Attending an SCDA orientation and signing a Hemp Farming Agreement prior to possessing any hemp, including clones and seeds

In Other News

Aurora Cannabis Appoints Two New Independent Directors

 

Lance Friedmann and Michael Detlefsen have been appointed as two new directors for the Canadian cannabis company, Aurora Cannabis. The two have held roles with Kraft Foods and Pomegranate Capital Advisors, respectively. 

Aurora Cannabis Executive Chairman and Interim CEO Michael Singer stated, “We are pleased to welcome Lance Friedmann and Michael Detlefsen as independent members to the board at this critical time in our transformation. We expect to see cannabinoids grow as a category in consumer products and believe their depth of experience and strong track records of successful brand development and operational business transformation will provide helpful insights to our executive team. With the addition of Messrs. Friedmann and Detlefsen, Aurora has expanded its Board, independent directors.”

KushCo Holdings Announces $16 Million Registered Direct Offering

 

KushCo Holdings has announced its entrance to a definitive agreement with investors purchasing stock in the company. The agreement includes 10,000,000 units, with each unit representing one share of common stock. The transaction was set for $0.001 per share, and a warrant to purchase half a share of common stock, at an offering price of $1.60 per unit, pursuant to a registered direct offering.


Kaitlin DomangueKaitlin DomangueJanuary 29, 2020

2min12750

US-based company, EcoGen Labs, is continuing to expand and grow as it successfully closes on a $40 financing arrangement through private placement. 

EcoGen Labs is a vertically-integrated, seed-to-sale manufacturer and supplier of specialty hemp-derived ingredients and proprietary formulas in the United States. The company also produces private-label finished product, as well as providing unique genetics.

Since its launch in 2016, the company has expanded rapidly, producing over $80 million in revenue last year. EcoGen supplies nearly 70% of the ingredients used in various retailers across the US, including Whole Foods, Sephora, and CVS Health Corp.

Alexis Korybut, the Co-Founder of EcoGen says “We are very encouraged by the strong support we’ve received from the institutional marketplace. This investment is an important step forward that will allow us to further grow and expand our business.”

EcoGen has a solid strategy for the utilization of this transaction, the plans include supporting the further development of its facilities, focusing on its research and development, and the expansion of marketing and sales divisions. Advancing the company’s seed and genetics, the expansion of private-label finished goods, and new technologies are also on the agenda for EcoGen.

“With engineering as a passion and also my background, the prospect of new innovation is what led me to this industry,” says Joseph Nunez, Co-Founder of EcoGen. “When we first started, we were on a mission to create a state-of-the-art process to produce exceptionally pure CBD that set the standard for the industry. We’re proud to say that goal was quickly achieved and this capital raise will allow us to expand that success into other verticals of the business.”

EcoGen also has plans to develop their new national headquarters on a nearly-20 acre property located in Grand Junction, Colorado. When development is complete it will include everything from seed production to the making of CBD products.


Kaitlin DomangueKaitlin DomangueJanuary 28, 2020
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2min25130

Emerald Health Therapeutics (TSXV: EMH; OTCQX: EMHTF), referred to as “Emerald” for clarity, is a Canadian cannabis company offering wellness-oriented and recreational cannabis products. Emerald provided an update yesterday on their recently announced a shares for debt transaction with Emerald Health Sciences, (“Sciences”) a control person for Emerald. 

Presently, Emerald carries an aggregate debt of $2,816,963. Per a previously disclosed loan agreement between both parties, Emerald will settle $794,182 owed to Sciences, as well as $2,022,781 owed to Sciences pursuant to trades payable. Emerald Health Therapeutics will also issue 9,713,666 common shares of Emerald to Sciences at $0.29 per share in order to fulfill the debt.

Currently, Sciences holds roughly 29,687,942 of Emerald’s issued shares and upon the completion of the debt settlement, Sciences will hold approximately 23.1% of the issued and outstanding shares of Emerald, on an undiluted basis.

Due to Sciences being a control person of Emerald, the settlement is considered to be a “related party transaction”, meaning the companies had a pre-existing connection prior to the transaction.

Emerald is not the only company in a cash crunch, and relying on selling common shares to stay above water. MedMen has also been making the headlines for a similar situation. The company recently sent out emails to their vendors stating they cannot pay them, and are offering shares in their company instead.

Green Market Report talked to Adam Bierman, the CEO of MedMen, about their circumstances. Bierman tells us, “We’ve been very forthright with the public, and with our investment community at large about the fact that at the end of last year we entered into a restructuring in the business, exiting the hyper-growth stage of the business, and getting into sustainability, and with that, there’s a lot of pain. And that pain starts at the employees that were on this mission with us, building this platform with us that we had to part ways with.”


Debra BorchardtDebra BorchardtOctober 31, 2019
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7min16050

The OTC Markets Group and the Canadian Securities Exchange held an Investor Day in New York City on October 30. The event featured presentations from Trulieve Cannabis Corporation (OTCQX: TCNNF; CSE: TRUL), Flower One Holdings Inc. (OTCQX: FLOOF; CSE: FONE), Ayr Strategies Inc. (OTCQX: AYRSF; CSE: AYR.A), TerrAscend Corp. (OTCQX: TRSSF; CSE: TER), Planet 13 Holdings Inc. (OTCQX: PLNHF; CSE: PLTH), Cresco Labs Inc. (OTCQX: CRLBF; CSE: CL) and iAnthus Capital Holdings, Inc. (OTCQX: ITHUF; CSE: IAN).

Richard Carleton, CEO of the Canadian Securities Exchange and Jason Paltrowitz, Executive Vice President of Corporate Services at the OTC Markets Group fielded questions from investors about the sector’s bear market and what they thought could turn things around. Of course, these executives can’t convince investors to start writing buy tickets and it doesn’t seem as if a “Green Swan” moment will occur in the near term to swing stocks back to the past meteoric rises.

“We would like to see a decoupling between US multi-state operators and Canadian licensed producers (LP),” said Patrowitz. “It’s challenging in Canada, and some LP’s have gotten in trouble, which took the group down.” He did add that U.S. companies are working in a completely different environment from the Canadians, but get lumped together. He also pointed out that the market is seeing the emergence of winners and these performers he believes will bring confidence back to the investors.

The two also highlighted the growth they are seeing in other stock markets around the world. Specifically, Jamaica and Africa were mentioned for future promise. They both agreed that there would be more market consolidation

One of the best performers in the sector has been Trulieve, who kicked off the event. The company announced updated guidance of revenue in the range of $220-$240 million for 2019 and for 2020 the revenue is expected to be between $380-400 million. A considerable amount of the company’s growth was due to a rise in the number of medical cannabis patients in Florida, which increased by 19%. Driving patient growth was the introduction of cannabis flower to market, which accounted for 50% of total product sales in the state for the second quarter. As of June 30, 2019, there were 181,000 medical cannabis patients in Florida.

Trulieve CEO Kim Rivers said that 3,000 people new people enter the Florida market every week. The company’s decision to go “all in” on the state is part of its brand penetration thesis. It has  1.7 million sq ft of cultivation, combining low cost and premium facilities. Trulieve expects 44 stores by year-end in the state and assured the attendees that they had no banking issues.

Flower One spoke about its recently acquired product Old Pal becoming the top-performing cannabis flower brand in the state of Nevada according to Headset.

Newcomer Ayr Strategies stressed to the audience that its strategy was to acquire cash flow positive only companies. Chief Operating Officer Jen Drake noted that the company was not reliant on capital markets to fund growth. “We have a lower risk strategy and we’re focused on profitability,” she said. The company created vertical integration in Nevada by buying four companies and is also in Massachusetts. The company has a 2019 forecast for revenue of C$160-170 million and in 2020 the revenue is estimated at $305-C$325 million. The company currently has a market cap of only $46 million and is free cash flow positive every month.

iAnthus reviewed its relationship with Gotham Green and the financing deals that the company has engaged in to keep the company in solid standing. While the New York recreational status was disappointing, the company is nonetheless preparing for that day whenever it does happen.

 

 



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