Marijuana Money Archives - Green Market Report

Video StaffVideo StaffDecember 13, 2019

4min1480

This week was the 2019 MJBiz conference. This year there are over 1300 exhibitors and 36,000 attendees.

TerrAscend Corp. (CSE: TER) announced its intention to complete a private placement offering. The company plans to offer approximately 10.77 million units of the company at a price of CAD$2.45 per share,  which will generate gross proceeds of US$20 million. the company will use the proceeds of the offering to speed up the completion of its New Jersey cultivation and processing facility and to make a purchase price payment for the acquisition of Ilera Healthcare. 

MedMen executed a term sheet for its non-brokered offering of subordinate voting shares for aggregate gross proceeds of US$27 million at a price per share of US$0.43 with a new strategic investor and an existing investor, Wicklow Capital. Basically Andrew Modlin is granting a limited proxy to Ben Rose, the Executive Chairman of the Board  his Class A Super Voting Shares for a period of one year. The company also agreed to additional cost reductions and amending the maturity date for a term loan. The company is also forecasting 2020 revenue in the range of $225-$245 million and in 2021 a range of $450-$50m. 

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) named David Klein as the company’s Chief Executive Officer effective January 14, 2020. The company said that Klein has served in a number of senior leadership capacities over the past 14 years at Constellation Brands.

Cresco Labs (CSE:CL) (OTCQX:CRLBF) has completed its first harvest from its expanded cultivation facility in Lincoln, IL. The state will begin sales of legal adult-use cannabis on January 1 and is projected to be a $2-4 billion dollar market once it has matured and is expected to be one of the largest cannabis markets in the country.  The company also announced this week that it was going to shore up its balance sheet by selling off one of its properties. Cresco said that it would sell its Lincoln, Illinois cultivation facility to GreenAcreage Real Estate Corp. (GreenAcreage), for $50 million.

REX Shares (REX) has launched the MJO, the first leveraged exchange-traded product in the U.S. linked to the cannabis industry. MJO is an Exchange-Traded Note (ETN), is linked to MSMJ, the Indxx MicroSectors™ North American Cannabis Index, and will seek to provide 2x leveraged exposure to the Index. 

 

Holistic Industries said it will make a $20 million investment in Madison Heights for its Michigan headquarters. 


Video StaffVideo StaffDecember 6, 2019

3min4040

The state of Michigan began sales of adult-use cannabis on Sunday. People waited in long lines in cold weather for a chance to buy recreational marijuana. There weren’t a lot of dispensaries open for the first day, but the state’s regulatory agency said that $221k was spent on Day 1.

Four government agencies teamed up to make a statement regarding banking and hemp growers. The key takeway was that the banks would not need to fill out Suspicious activity reports known as SARS for companies engaged in the growth or cultivation of hemp. The narrow interpretation is that this only applies to farmers, but many in the industry believe it applies to all hemp producers and brands.

Rapper Lil Wayne announced he was launching his own cannabis brand called GKUA. If you were wondering what the initials stand for, it doesn’t stand for anything They just liked the letters.

Sunniva continues to spiral downward. The company is being sued by Matrix Venture who is claiming default on a loan and wants the Okanagan Falls facility as repayment. Sunniva says it will the lawsuit, but it did concede in a filing that it was in default and there is another financial instrument the company is in default on. You may recall, the C-suite has been in great turmoil as the CFO and other departed.

Cresco Labs entered an at the market agreement with Canaccord for C$55 million in shares.

Indus Holdings reported revenue of $10 million for its fiscal third quarter, still, the EBITDA loss was $16 million.

4Front Ventures reported third-quarter revenue of $16 million and a net loss of $7 million.

SOL Global reported a second-quarter net loss of $51 million on no revenues.

Isodiol Reported revenue of $1.8 million for the second quarter, but a net loss of $3.2 million. The company said it would be rebranding and restructuring its product lines.

In stock moves, Willow Biosciences received approval to trade on the Toronto Stock Exchange. The symbol will remain WLLW.

Jushi Holdings received approval to trade on the Canadian Securities Exchange using the symbol JUSH, they will leave the Neo exchange.


Video StaffVideo StaffNovember 22, 2019

2min5920

It was a big week in Washington for the industry and I don’t mean the debates or the impeachment hearings. The House Judiciary Committee passed the MORE Act, which is legislation to remove cannabis from the controlled substances act and decriminalize it. It will also remove prior and pending marijuana convictions. The next step would be for the legislation to go to a full house vote and then on to the senate. After that, it would still need to be signed by the president. It’s the most comprehensive cannabis reform bills introduced in Congress.

We started the week absorbing the news released after the market close on Friday that MedMen was slashing its ranks and scaling back its expansion plans. 190 employees got pink slips and the company is selling off its assets.

It was another big week for earnings. We’re just going to hit the high notes here.

Trulieve announced Q3 revenue of $70 million which beat estimates and a nice net income of $57 million.

Green Thumb Industries reported third-quarter revenue of $68 million, but a net loss of $17 million.

Harvest Health delivered revenue of $33 million for its third quarter, but a net loss of $39 million.

Beleaguered TILT Holdings turned a corner and delivered net income for the quarter of $26 million on revenue of $46 million.

iAnthus delivered $22 million in revenue, but also a net loss of $15 million.

Aurora Cannabis reported a drop in revenue and said it suspended construction at two of its largest greenhouses.

HEXO reported that it was growing plants in unlicensed rooms, but unlike CannTrust, Health Canada said they were okay with the company’s actions.

And Sunniva took a big hit as the company’s president resigned, just one week after the CFO quit.


Video StaffVideo StaffNovember 15, 2019

4min2920

This is the Green Market Report’s Marijuana Money for the week ending November 15, 2019.

It was a heavy week for earnings as some of the top players delivered the most recent quarterly numbers.

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) fell over 9% on news that the company’s second-quarter earnings missed analysts’ estimates. The Canadian-based cannabis company reported (in Canadian dollars) gross revenue of $118 million, a 6% increase sequentially and a 408% increase over last year’s $23 million for the same time period ending in September. The net revenue of $76 million fell 15% sequentially and missed estimates by $29 million. It did increase by 229% over last year’s $23 million. The stock was lately trading at USD$16.68.

The net loss decreased sequentially from $1.2 billion in the first quarter to $374 million in the second quarter. It also increased by 13% from last year’s net loss of $330 million.

Charlotte’s Web Holdings, Inc. (TSX: CWEB)(OTCQX: CWBHF)  reported that its revenue rose 41.8% to $25.1 million in the third quarter that ended September 30, 2019, versus $17.7 million for the same period in 2018. Still, the company delivered a net loss of $1.3 million versus last year’s net income of $1.8 million.

The operating expenses soared to $19.6 million over last year’s $9.8 million for the same time period. The company said in a statement that its “third-quarter operating expenses were $4.7 million”, but that isn’t the number that appeared in the financial table. The company did say that the rising expenses were “to support the Company’s growth and transition to a consumer-packaged goods operating company.

Acreage Holdings, Inc. (CSE: ACRG.U) (OTCQX: ACRGF) reported third-quarter revenue of $22.4 million, a 307% increase over last year’s $5.5 million for the same period in 2018. The company also reported a net loss of $39.9 million versus last year’s net loss of $4.5 million and the EBITDA loss was $44 million.

Organigram Holdings Inc. (NYSE: OGI) saw its stock plunged by almost 20% after the company slashed its guidance for the fiscal fourth quarter that ended in August after the market close on Monday. The stock was lately trading $2.74. The company said it will report earnings before the market opens on November 25. Organigram said it now expects fiscal fourth-quarter net revenue of C$16.3 million or $12.3 million, a huge drop from the third quarter revenue of C$24.8 million.  FactSet had analyst estimates at C$27.9 million for the fourth quarter.

IM Cannabis Corp became the first Israeli medical cannabis operator to list its shares in Canada. It now trades under the ticker “IMCC” on the Canadian Securities Exchange. This listing follows Israeli-based IMC Holdings Ltd’s recent reverse takeover of IMC, formerly known as Navasota Resources Inc., that included a private placement offering of approximately CAD$20.4 million. The subscription receipts from the private placement purchase were converted into 19,460,527 Common Shares and 9,730,258 Common Share purchase warrants.


Video StaffVideo StaffNovember 8, 2019

3min4010

Earnings season is underway and with the sector in a bear market, there seems to be a lot of pressure on companies to deliver solid results. GW Pharmaceuticals managed to do that but the stock still tumbled confusing shareholders. The company reported third-quarter net sales of $86 million in the cannabis drug Epidiolex. Revenue for the quarter was $91 million beating estimates. The losses were cut to $13 million versus last year’s $79 million, still, the stock sold off.

Innovative Industrial Properties beat analyst estimates with revenue that rose over 200% to $11 million and earnings per share of 55 cents. The dividend increased by 30% to 78 cents per share. The stock jumped over 9% on the news. 

CV Sciences (OTCQB:CVSI) reported revenue of $12.6M (-7.4% Y/Y) which missed estimates by $6.01M. Third-quarter sales were impacted by increased market competition in the natural product category, and the continued impacts on retail customers as a result of the uncertain regulatory environment for CBD. The third quarter Non-GAAP EPS of -$0.01 missed by $0.02 and the GAAP EPS of -$0.02 missed by $0.03. The decline in operating income is primarily related to reduced sales and additional investment in sales, marketing, and R&D activities.

For fiscal year 2019, the company expects revenue to be in the range of $55 million to $57 million.

Merida Priced its IPO to form a $120 million special purchase acquisition company. The units will commence trading November 5, 2019 on Nasdaq under the symbol “MCMJU” and are expected to commence trading on the Neo Exchange Inc. on or about November 8, subject to satisfying certain listing conditions, under the symbol “MMK.UN”.

TILT Holdings closed on a $35 million private placement which will be used to pay off a high-interest rate bridge loan. The company also agreed to board changes.

Terra Tech is merging with the over the counter drug company OneQor and may spin off its cannabis holdings.

Sunniva lost its CFO but said its CannaPharmRx deal is still on.

MediPharm Labs filed to list on the NASDAQ.


Video StaffVideo StaffNovember 1, 2019

3min6970

This week the USDA released a draft for the regulation of hemp in the US. once the rules are released they will be temporary for the first year. This allows the states to participate in hemp cultivation and processing for the 2020 growing season. The rules also cover other important things like where hemp can be grown, THC testing standards, biomass transportation, licensing regulations, and more.

MedMen had a rough week. The company reported earnings and while it wanted the market to focus on the full-year revenue of $130 million, it was the $277 million in losses that caught everyone’s attention. In addition to that Gotham Green made changes to the company’s credit facilities and took majority control of the company’s board. Then Cowen & Co piled on as analyst Vivian Azer questioned the company’s cost-cutting goals.

Hexo stock took another beating. Last week the company announced layoffs, this week it reported earnings of $15.4 million versus last year’s $13 million but then delivered a net loss increase of over 400% coming in at $56 million for the quarter versus last year’s net loss of $10 million. The company also lowered guidance citing slower than expected store roll out across Canada and lower sell-through. 

So, let’s just keep going with the bad news, DionyMed is headed for bankruptcy or as the Canadians call it receivership. The company couldn’t pay the $24 million that its creditors were demanding and so the fat lady began to sing. 

The bear market forced Curaleaf to change its deal with Cura Partners. The share amount was cut by half and any additional shares will be payable upon the company meeting certain sales target goals. 

It was all terrible this week. In positive news, Liberty Health Sciences reported revenue of $10 million versus last year’s $2 million for the same time period and net income of $22 million over last year’s net loss of $5.6 million. 

The company 1906 raised $18 million in a round led by Navy Capital and General Cannabis bought a dispensary in Boulder.

Finally, presidential candidate and Vermont Senator Bernie Sanders released his plan for legalizing cannabis. He said he will remove cannabis from the controlled substances act and expunge all past convictions.


Video StaffVideo StaffOctober 25, 2019
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3min3500

After taping Marijuana Money, we learned that HEXO Corp. decided to layoff 200 employees after also postponing the release of its earnings results. The company said it is rightsizing its operations to adjust to a changing market and regulatory environment with a view towards profitability and long-term stability.

“This has been my hardest day at HEXO Corp,” said Sebastien St-Louis, CEO and co-founder of the Company. “While it is extremely difficult to say goodbye to trusted colleagues, I am confident that we have made sound decisions to ensure the long-term viability of HEXO Corp. The actions taken this week are about rightsizing the organization to the revenue we expect to achieve in 2020.”

We found out that the FDA and FTC joined forces to warn an online CBD merchant Rooted Apothecary about making unsubstantiated claims. The website claimed that its CBD infused products could be used to treat conditions like teething pain and earaches in babies. The letter also warned the company about describing the CBD products as dietary supplements. The letter was sent on October 10, but not made public until this week. The company has 15 days to correct the violations.

In Washington, a U.S. Senate Caucus on International Narcotics Control had a  hearing on the health impacts of marijuana, but it turned into a discussion on how cannabis’s current federal classification makes it harder for researchers to shed light on those effects.

Green Growth Brands reported revenue of $15.7 million for its fiscal fourth quarter, however, the company delivered a whopping net loss of  $31 million. The operating expenses for the quarter were $20 million. Most of the revenue came from one dispensary in Las Vegas called The Source and they brought in $5.5m. CBD revenue was $1.7 million and they are now running over 160 stores. That’s like what $10 grand a store? The company said it is shifting from building to executing in 2020.

Innovative Industrial Properties closed on a Florida property from Trulieve. Also, Trulieve was added to the OTCQX index trading under the symbol TCNNF.

Casa Verde led a $7m round of financing for cannabis lender Bespoke Financial.

Megan Rapinoe has signed on with the women-owned sports recovery CBD brand called Mendi. Rapinoe will lend her voice and vision to the company and it’s her first sponsorship since winning the world cup this year. Rapinoe became a breakout star during this year’s soccer championship.

 


Video StaffVideo StaffOctober 18, 2019

6min7600

Cannabis and Washington crossed paths again this week and not in the usual legislative way. Last week Green Market Report broke the news that two associates of President Trump and Mayor Guiliani who were arrested for campaign finance violations had their hands in the cannabis industry in Nevada. David Correia was arrested this week at a New York Airport. GMR also reported on the ties of already arrested Andrey Kukushkin to the California cannabis market. Kukushkin and Correia are supposed to go back to court on Thursday this week.  

Aphria Inc. (TSX: APHA)(NYSE: APHA) stock jumped over 16% to trade at approximately $5.10 in early trading after the company reported that its revenue increased 849% to $126.1 million for the first quarter with net income of $16.4 million.

Valens GroWorks Corp. (TSXV: VGW) (OTC: VGWCF)  reported its financial results for the third quarter of fiscal 2019 with revenue increasing 87.1% to $16.5 million and delivered net income of $5.9 million.

Cannabis tech company Flowhub has raised an oversubscribed $23 million Series A financing round led by e.ventures, Evolv Ventures — the venture fund backed by Kraft Heinz —  and Poseidon, with contributions from investors 9Yards Capital, former NBA commissioner David Stern and Iqram Magdon-Ismail, the co-founder and former CEO of Venmo, among others.

Orthogonal Thinker announced last month that it raised $2.5 million in capital. This funding completes approximately $4 million in seed capital raised to date, with more funding coming in. Orthogonal will use this financing to support intellectual property rights for plant-based psychoactive compounds. 

Private company Holistic Industries closed on $55 million in funding. The multi-state operator (MSO), which started on the East Coast and has rapidly expanded to the Midwest and West Coast, currently operates in California, Maryland, Massachusetts, Michigan, Pennsylvania, and Washington D.C.

Legion M is a fan-owned company. Its latest project is the Jay & Silent Bob Reboot movie from director Kevin Smith and it was screened this week as a Fathom Event. The dynamic duo head to Hollywood to stop a reboot of their movie. It contains lots of cannabis humor as well.  The movie was released along with the launch of Jay & Silent Bob’s Private Stash cannabis strains, which is available to buy in California with plans to expand to other states


Video StaffVideo StaffOctober 11, 2019

3min7740

This is your marijuana money minute for the week ending October 11 from the New West Media in San Francisco. Wow, what a crazy week to see things blow up and more carnage in the cannabis industry. 

Where to start?

MedMen announced it decided to terminate the deal with PharmaCann that had been valued at $684 million. MedMen said it wants to focus more on its California market and go deeper into its strengths. As a consolation prize, Medmen gets PharmaCann’s Illinois licenses as part of the termination fee. Of course, MedMen has been touting its proforma numbers with Pharmacann and so now those have to be dialed back.

Speaking of dialing back, HEXO Corp said that its previously projected revenues were a bit lofty. The company said it had to reduce its revenue estimates to a range of $46-$48 million for the year, significantly lower than the $400 million it said it would do in 2020. That stock got spanked hard.

The Green Organic Dutchman said that it was considering new financing to complete the construction of two of its facilities. The only problem with that is that on previous investment decks, TGOD claimed that their projects were fully funded. The company also says it has $50 million in cash. How much money d they possibly need if they are only weeks away from completion. The stock lost 40% of its value in 2 days. 

More divorce news.

Aleafia said it was no longer going to buy cannabis from Aphria saying Aphria failed to meet its supply obligations. Aphria seemed to toss it off and said they would still achieve net positive income for this past quarter. To make things more awkward, Aphria owns a lot of Aleafia stock.

And then finally, two Russian nationals were arrested for campaign finance violations this week and it turns out that they had applied for marijuana licenses in Nevada. They didn’t get them because they were late by 2 months.


Video StaffVideo StaffOctober 4, 2019
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7min4750

Green Market Report thanks the ArcView Group for allowing us to tape Marijuana Money from their event this week. 

Constellation Brands (NYSE: STZ) wrote down its Canopy Brands (NYSE: CGC) investment to the tune of almost half a billion dollars. Constellation, which also owns Modelo beer and Robert Mondavi wines, said its share of equity losses from its roughly $4 billion investment came to $484.4 million. 

 Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company.

Gotham Green Partners has invested an additional $20 million in iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) through the purchase of senior secured convertible notes. Green Gotham said it was part of a broader $100 million financing plan to support the buildout of all existing markets in which iAnthus currently operatesTerrAscend Corp. 

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even.

Fire & Flower Holdings Corp. (TSX: FAF) its financial results for the second fiscal quarter ending August 3, 2019, with total revenue of $11.1 million versus $9.5 million for the same time period in 2018. The net loss for the quarter was $6.4 million.

High Tide Inc. (CSE:HITI) (OTCQB:HITIF) announced financial results for the third fiscal quarter of 2019 ending July 31. Revenue in the third quarter increased by 281%, to C$8 million from C$2 million last year. 

48North Cannabis Corp. (TSXV: NRTH) delivered net revenue of $4.8 million marking 48North’s first full year of revenue, but a net loss of $8.1 million. In fiscal 2019, the company raised over $48 million and at the end of the year had $52.7 million in cash and cash equivalents on hand.

Arizona-based DNA testing technology company PathogenDx, Inc. announced $7.5 million in Series B funding. 

And finally HeavenlyRx Ltd. Acquired CBD company PureKana. 



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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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