News

Debra BorchardtJuly 1, 2022
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4min2920

Flower One Holdings Inc.  (CSE: FONE) (OTCQX: FLOOF) has made some movement with its ongoing restructuring, including the restructuring of its term debt and its master lease. This comes on the heels of the company reporting its annual earnings. For the year ending in December 2021, Flower One reported 2021 revenue of $58.4 million, representing a 70% increase from the prior year. Despite all that revenue, as of December 31, 2021, the company only had cash and cash equivalents of $0.9 million, compared with $1.1 million as of December 31, 2020

While the company experienced a year-over-year revenue increase, It noted that fourth-quarter revenues were affected as Nevada historically endured a decline in both cannabis sales and tourism in its fourth quarter, in comparison to the remainder of the year. “Additionally, increased competition combined with decreased demand led to price compression in the wholesale market. Due to these compounding factors and the COVID-19 variants, the Company endured a decline in revenue in its fourth-quarter ending December 31, 2021. The company trimmed its net losses to $24.4 million versus the net loss of $117.5 million in 2020.

Term Debt Restructuring

Flower One said it has entered into a Term Debt Modification Agreement with its lender, RB Loan Portfolio II, LLC,  on its existing $45.65 million Term Debt, secured by the facility at 3950 N. Bruce St., North Las Vegas, Nevada. The company will be able to defer interest payments through October 31, 2022, in order to provide additional liquidity to the business, reduce the cash interest payments by 30%, extend the maturity date of the Term Debt to January 31, 2026, and pay $9 million to the Term Lender on September 30, 2023, and if it misses that payment, it has the option to pay this First Loan Paydown on January 31, 2024, with a 2.5% penalty.

“This debt restructuring is a major step in our turnaround plan, as it will provide the Company with additional liquidity and a significant runway to continue our operational restructuring efforts, and position the Company for sustainable growth,” said Kellen O’Keefe, President & CEO. “We would like to thank our term lenders and loan participants for facilitating these momentous transactions.” Flower One also restructured its debt in 2021.

Master Lease Restructuring

The company also said in its statement that it has also entered into a Master Lease Modification Agreement in connection with the agreement dated February 1, 2019 with RB Loan Portfolio I, LP, a Delaware limited partnership, regarding the equipment lease financing of certain equipment at the Bruce Facility. The statement read, “Pursuant to which the Lessor has agreed to forbear existing events of default and make certain modifications to Master Lease, including (i) the deferral of certain payments through October 31, 2022, in order to provide additional liquidity to the business, (ii) revising the amortization schedule to enable a reduction in monthly payments for the duration of the Master Lease and (iii) extend the maturity date of the Master Lease to March 3, 2025.”

“Given the current state of the capital markets for cannabis, we are very pleased with this notable transaction. This crucial step in our restructuring not only provides the Company with significant cash interest savings, but also allows for a deferral of interest payments, ensuring we are able to preserve capital,” Araxie Grant, Flower One’s CFO.

 


Debra BorchardtJuly 1, 2022
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5min2880

SPACs (Special Purpose Acquisition Corp.) were the hottest thing going on in the cannabis industry for the past couple of years, but the buzz may be wearing off. These SPACs would raise millions and then search for a “qualifying transaction.”  In other words, the money was looking for a company to essentially buy and take public. It was an easy way for cannabis companies to get investor money and quickly become publicly-traded stocks. However, these deals frequently turned sour for the secondary buyers dampening the interest.

Plus, the millions raised didn’t sync well with the size of the companies available to be a target. For example, a SPAC may raise $100 million and then pick a company that maybe did $10 million a year in revenue. Suddenly this small company was given a very rich valuation because the SPAC didn’t have much to choose from. In the beginning, this anomaly was overlooked, but investors began to become a little more discerning. One thing unique about SPACs is that investors can pull out of a deal if they think the numbers just don’t look so great. Jumping ship at the last minute can often throw a SPAC into disarray. Another unique feature of SPACs is the tight time constraints. The SPAC has only so much time to identify a target and then execute. Being forced to add more time to the clock is also a signal of trouble.

Northern Lights

This week, the Northern Lights Acquisition Corp.  (Nasdaq: NLIT) SPAC had to push back its plan to use Safe Harbor Financial as its qualifying transaction. The vote had been planned earlier this week, but now has been pushed back to July 29 with the ability to extend even further to August 31. The business combination was approved by the company’s stockholders at the special meeting of stockholders held on June 28, 2022. Northern Lights said that stockholders who had previously submitted redemption requests in connection with the closing of the could ask that those redemption requests be reversed. In other words, if they chose to bail out of the deal, Northern Lights said they could change their minds. As of June 22, 2022, the company has received redemption requests for 11,416,205 shares of Class A Stock in connection with the Business Combination.

Ceres Acquisition

On Thursday, Ceres Acquisition Corp. (OTCQX: CERAF) announced that it was also extending its timeline to complete a qualifying transaction to December 16, 2022. The Extension was previously approved at a special meeting of the holders of Class A Restricted Voting Shares of Ceres held on June 22, 2022. Ceres’ board of directors has also approved the Extension, which is effective as of June 30, 2022. this isn’t the first-time, the SPAC has pushed out its timeline. Ceres’ final prospectus for its initial public offering was originally dated February 25, 2020, but then the Permitted Timeline was automatically extended from December 3, 2021 to March 3, 2022 and was further extended with the approval of the Class A Restricted Voting Shareholders to June 30, 2022.

Ceres was going to do a deal with Parallel, but that got called off when the company’s finances came under question. Now Ceres says that it believes that it “has identified a number of promising targets and is currently evaluating the business of these prospective targets and engaging in active discussions with an aim towards announcing an exciting qualifying transaction for Ceres’ security holders in the near future.”

 


StaffJune 30, 2022
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11min5050

The Daily Hit is a recap of the top cannabis business stories for June 30, 2022.

ON THE SITE

Tyson 2.0 Raises $9M with Plans to Expand Celebrity Property

Cannabis advocate and former boxer  Mike Tyson’s cannabis brand Tyson 2.0 announced the close of its oversubscribed $9 Million Series A round led by JW Asset Management. Additional investors in the round include K2, Ambria Capital, Tress Capital, and Patrick Carroll. The company said that the new funds will be used to acquire more celebrity intellectual property, scale marketing efforts, accelerate distribution, and further invest in the development of Tyson 2.0’s house of brands strategy. Read more here.

Akerna Shares Plunge on New Offering

Despite being in financial trouble, cannabis tech firm Akerna Corp. (Nasdaq: KERN) announced the pricing of an underwritten public offering of 29,382,861 units with common stock warrants. The units are being sold at a public offering price of $0.23 per unit and the pre-funded units are being sold at a public offering price of $0.2299 per pre-funded unit. The news sent shares tumbling almost 50% in early trading to lately sell at 14 cents per share. The offering should bring in roughly $6.7 million. Read more here.

Grown Rogue Reports Rising Revenue as Prices Fall

Grown Rogue International Inc.  (CSE: GRIN) (OTC: GRUSF) reported its fiscal second-quarter 2022 results for the three months ending April 30, 2022. Grown Rogue reported revenue rose 72% to $4.7 million versus $1.37 million for the same time period last year. Sales also rose sequentially from the first quarter’s revenue of $3.73 million. Read more here.

Curaleaf Pushes Back on Tip Jar

Cannabis multi-state operator Curaleaf Holdings Inc.  (OTC: CURLF) is pushing back against an employee lawsuit that sued the company for the contents of a tip jar. Former employee Morgan Heller filed a complaint in March accusing the company of not giving the employees $126,000 that had been collected in tip jars. Heller says the managers took the money instead. Read more here.

Field Trip’s Clinics Cost More Than the Revenue They Bring In

Field Trip Health Ltd. (NASDAQ: FTRP) reported fiscal fourth-quarter and full-year 2022 results for the period ending March 31, 2022, and provided a business update today. All results are reported in Canadian dollars. For the quarter, Field Trip earned patient services revenues of $1,724,102 from its twelve clinics in operation, an increase of $1,197,667 or 228%, over the fourth quarter ended March 31, 2021. Read more here.

Psychedelic Microdosing is Trendy, but Studies are Lacking

Microdosing psychedelics is quickly becoming a trendy new mental and physical wellness event that athletes, celebrities, and everyday businesspeople are doing it as a daily ritual that is sometimes even encouraged by their bosses. In fact, the very term “microdosing” is working into common usage as just another way of saying you tried something, or attended some event, or ingested some substance — but just not a lot of it. Read more here.

IN OTHER NEWS

Canopy Growth Corporation

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced today that, further to its press release dated June 29, 2022, it has entered into an additional privately negotiated exchange agreement with a holder of the company’s outstanding 4.25% unsecured senior notes due 2023, to acquire approximately C$7.25 million (approximately USD$5.6 million) aggregate principal amount of the notes from the noteholders in exchange for common shares of the company and approximately C$140,000 (approximately USD$110,000) in cash for accrued and unpaid interest. Read more here.

MariMed, Inc.

MariMed, Inc. (OTCQX: MRMD), a multi-state cannabis operator, today announced that it has obtained a receipt for its final non-offering, long form prospectus dated June 29, 2022, from the Ontario Securities Commission. Concurrent with its prospectus filing, the Company also received conditional approval from the Canadian Securities Exchange to list the company’s common shares on the CSE under the symbol “MRMD”. Listing of the common shares is subject to the satisfaction of certain customary conditions, including the receipt by the CSE of all final documentation. Read more here.

Northern Lights Acquisition Corp., SHF Holding Co., LLC

Northern Lights Acquisition Corp. (Nasdaq: NLIT), a special purpose acquisition company, announced that it has amended that certain unit purchase agreement, dated February 11, 2022, by and among the company, 5AK, LLC, the company’s sponsor, SHF, LLC d/b/a Safe Harbor Financial, a Colorado limited liability company, SHF Holding Co., LLC, a Colorado limited liability company and the sole member of the target, and Partner Colorado Credit Union, a Colorado corporation and the sole member of the Seller, to extend the date by which the transactions contemplated thereby had to be consummated from June 30, 2022, until July 29, 2022, with the ability for the deadline to be extended through August 31, 2022. The extension of the outside date will provide the company with additional time to complete the business combination as it awaits regulatory approval. Read more here.

Ascend Wellness Holdings, Inc.

Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH), a multi-state, vertically integrated cannabis operator, announced that it has closed on $28.5M of the remaining additional funding under the accordion feature of its existing term loan credit facility. As previously announced, the company drew initial funding of US$210M in August 2021 and subsequently closed on a US$36.5M expansion in May 2022. This additional raise brings the total raised under the senior credit facility to US$275M. Read more here.

Auxly Cannabis Group Inc.

Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF) announced today the voting results from its annual general meeting of shareholders held on June 30, 2022. A total of 159,835,106 common shares of the company, representing 17.85% of the issued and outstanding common shares of the company, were voted in connection with the meeting by shareholders and proxy holders. All of the matters put forward before the company’s shareholders for consideration and approval, as set out in the company’s information circular dated May 20, 2022, were approved by the requisite majority of the votes cast at the meeting. Read more here.

Canntab Therapeutics Limited

Canntab Therapeutics Limited (CSE: PILL) (OTCQB: CTABF) (FRA: TBF1) a developer in cannabinoid and terpene blends in hard pill form for therapeutic applications, provided a corporate update to its shareholders and stakeholders. Further to the announcement made by Canntab on April 14, 2022, with respect to our exploration of a variety of alternative business strategies including potential M&A opportunities, as well as identifying and negotiating partnerships to assist Canntab in expanding its product offerings in the United States and other international jurisdictions. Read more here.

Pervasip Corp. 

Pervasip Corp. (OTC: PVSP), a developer of companies and technologies in high value emerging markets, and Zen Asset Management, its wholly owned subsidiary today announced that its partnership with Full Spectrum Advisors is yielding results ahead of expectations. Following announcements made in March, introducing its partnership with Full Spectrum Advisors, Pervasip reports early results that are exceeding projected yield improvements with 25% increased harvest results in the cultivation centers growing Artizen flower. Read more here.

MediPharm Labs Corp.

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ), a pharmaceutical company specialized in precision-based cannabinoids, today announced the results of matters voted on at its annual meeting of holders of common shares held on Thursday, June 30, 2022. The voting results for each of the matters presented at the meeting are outlined below. Read more here.

Humble & Fume Inc.

Humble & Fume Inc. (CSE: HMBL) (OTCQX: HUMBF), a North American distributor for cannabis and cannabis accessories, announced the detailed voting results for the 2021 Annual General Meeting of Shareholders, held on June 29, 2022, which includes the election of Mark Hubler to the Board of Directors. Read more here.

 


StaffJune 30, 2022
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8min7190

Editors Note: This was republished with permission from Crain Chicago and written by John Pletz.

The owner of Windy City Cannabis shops wants Beau Wrigley to pay $80 million in damages for a sale that never closed.

William “Beau” Wrigley Jr., who is already facing lawsuits over dreams of a marijuana company’s initial public offering that went up in smoke, is fighting a request for arbitration in a deal to buy a half-dozen Chicago-area pot shops that also vaporized.

Wrigley, who resigned last year as CEO of Atlanta-based marijuana company Parallel, filed suit in federal court in Chicago this week, asking a judge to declare that he shouldn’t be included in arbitration over the failed deal by Parallel to buy six Windy City Cannabis stores for $100 million. (Read the lawsuit below.)

The deal has been in limbo for more than a year. Since then, the market for cannabis stocks has cratered, pushing down the value of marijuana businesses. The state also has held lotteries to issue 185 new dispensary licenses, further undercutting the value of marijuana shops.

Parallel reached a deal in April 2021 to buy Windy City Cannabis shops, which were owned by Steve Weisman and Weisman Holding. It was one of several deals that were supposed to culminate in the IPO of Parallel later that year through a merger with a special-purpose acquisition company, or SPAC, called Ceres Acquisition (OTC: CERAF).

The SPAC deal fell apart and Wrigley later resigned as CEO and chairman of Parallel amid a cash crunch. Investors in Parallel have sued in Florida and New York, saying they were misled about the financial health of the company.

Windy City Cannabis is not the first marijuana deal to blow up, underscoring the Wild West nature of a nascent, fast-moving industry where entrepreneurs have both made and lost fortunes.

PharmaCann, one of the four big multistate marijuana companies based in Chicago, planned to sell to MedMen for $682 million in 2018, but the deal fell apart. Verano Holdings’ deal in 2019 to sell to Phoenix-based Harvest Health & Recreation for $850 million also came undone.

Verano later went public, but PharmaCann has struggled to keep up with Chicago-based peers, such as Green Thumb Industries and Cresco Labs, which are among the largest players in the industry.

Several smaller players have been sold for tens of millions of dollars in the past year.

Windy City was an even bigger prize. After two waves of consolidation, Windy City is one of the few remaining companies in Illinois with multiple licenses that could give an acquirer the ability to enter the Illinois market with enough scale to compete with Cresco, GTI, Verano and others who hold the maximum 10 retail licenses allowed by law.

But Windy City’s deal, which was supposed to close by April, remains up in the air. Parallel hasn’t come up with the money to complete the deal, nor has it been able to get approval from state regulators to transfer the retail licenses.

One of the challenges, according to a related lawsuit filed in Cook County Circuit Court by Weisman, is the ownership by Wrigley, who was CEO of Chicago-based Wm. Wrigley Jr. until its 2008 sale to Mars for $23 billion, then moved to Florida and got into the pot business in 2017. Although he’s no longer CEO, he’s the largest shareholder in Parallel, according to the litigation. However, the ownership stake involves at least one trust, something that’s prohibited by state regulations.

Wrigley, who was the subject of a Forbes profile just two months before announcing the Windy City deal, was the face of the company until November, when he resigned as CEO.

Now he’s trying to distance himself. In the federal court filing, Wrigley says he was not a party or signatory to the purchase agreement for the Windy City stores and did not act as an agent to Parallel or a related company. According to his filing, Windy City attempted to include him in the arbitration in which it’s seeking $80 million, alleging Parallel and its parent company SH Holdings are the “alter ego of Wrigley such that he should be personally liable for any damages.”

This story has been updated to correct the court where Beau Wrigley filed suit to federal court, not Cook County Circuit Court.

 


StaffJune 30, 2022
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4min11161

Cannabis multi-state operator Curaleaf Holdings Inc.  (OTC: CURLF) is pushing back against an employee lawsuit that sued the company for the contents of a tip jar. Former employee Morgan Heller filed a complaint in March accusing the company of not giving the employees $126,000 that had been collected in tip jars. Heller says the managers took the money instead.

Curaleaf wants the Illinois federal court to dismiss those claims saying it never agreed to pay those tips to workers in the first place. Curaleaf’s position is that tips were not part of the employment agreement and had told the employees as such. Heller even states in her complaint that Curaleaf had instructed employees not to take the tips, but the employees chose to ignore the directive and continued to put out a tip jar by the cash register. Heller said that the employees believed the tips would be collected at the end of the day and distributed evenly among all the hourly employees. However, Heller says the money was instead kept by the managers. Indeed, the confusion over how the tips that were collected should be disbursed seemed to be at the discretion of the managers. Some managers used the money to buy lunch for the staff or give out lunch money.

“The alleged facts indicate there was no meeting of the minds as to whether tips were a part of the agreed upon compensation or how tips were dispersed to employees,” Curaleaf said. the company went on to say, “Heller’s allegations acknowledge that Curaleaf’s corporate policy was to not accept tips and that subsequent deviations from this stance were done on an ad hoc basis in response to policy violations and not, as the IWPCA would require, according to an agreement.” Curaleaf has over 300 reviews on Glass Door with an average rating of three stars out of five. Less than half say they would recommend the company to a friend.

Tipping At Dispensaries

Tipping is fairly commonplace at dispensaries. Sometimes the tip jar is placed for a specific budtender, and other times it is intended for the whole staff. Restaurants often engage in similar tipping structures, where some waitstaff collect their own tips and others pool them to include kitchen help as well as front-of-the-house workers. Many cannabis consumers are aware that budtenders are often only paid a small percentage over minimum wage. The Pot Guide wrote, “For a basic transaction, a dollar is a good standard. For anything more complex $2-5, depending on the extent of the service and size of the purchase, and if you’re really making them run around for a large order, consider throwing a $5-10 in the tip jar.”

However, in some states with extraordinarily high taxation, a consumer may feel they have already paid a high price for the product and that the company should adequately pay their employees.


StaffJune 30, 2022
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5min4600

Cannabis advocate and former boxer  Mike Tyson’s cannabis brand Tyson 2.0 announced the close of its oversubscribed $9 Million Series A round led by JW Asset Management. Additional investors in the round include K2, Ambria Capital, Tress Capital, and Patrick Carroll. The company said that the new funds will be used to acquire more celebrity intellectual property, scale marketing efforts, accelerate distribution, and further invest in the development of Tyson 2.0’s house of brands strategy.

Tyson 2.0 Co-founder, President and Chairman, Chad Bronstein said, “Mike Tyson and our team believed early on that building high-quality cannabis brands and products backed by A-list celebrities would be a winning combination. Our model has shown early validation with robust sales and expansion of the brand to more than 20 states including several of the world’s leading operators. The next step in our journey will require us to put more capital to work, and I couldn’t think of a better set of partners than the group of investors we have assembled, highlighted by Jason Wild and the team at JW Asset Management.”

In addition to raising the capital, Tyson 2.0 announced the appointment of Nicole Cosby as its Chief Legal and Licensing Officer. Cosby also served as Chief Data and Compliance Officer of Fyllo Group and prior to this, held the position of Senior Vice President of Standards at Publicis Group. Cosby is an attorney by trade and has a background in digital advertising/data policy and brand strategy/licensing.

“I’ve had the pleasure of working with and knowing Chad and Adam for many years. I am impressed with how quickly they have scaled the business becoming one of the leading national cannabis brands on the market today. With the ability to develop additional products from celebrities like Mike TysonRic Flair, and more to come, I am confident the strong momentum can continue,” said Jason Wild, President and Chief Investment Officer, JW Asset Management.

Bronstein concluded, “This is just the beginning, Tyson 2.0 is being sought out by some of the hottest pop culture icons who are cannabis advocates and users, and want the opportunity to share their love of the plant with their fans.”

Washington

Earlier this month, Tyson 2.0 said that a collaboration with Mammoth Labs has resulted in its cannabis products being available at sixteen dispensaries across the state of Washington. Tyson 2.0 products will be in dispensaries including Cannabis & Glass, Herbery, Zips, The FireHouse and The Station locations starting June 2. Through its production partnership with Washington-based Mammoth Labs, Tyson 2.0 premium products offered will include eighths (3.5g) jars of flower in Desert Toad, Southern Toad, Tiger Mintz and Dynamite Cookie; and exclusive concentrates: diamonds and sauce in Viper Cookies, Orange Punch, Cake Crasher; and badder in Southern Toad.

“Tyson 2.0 x Mammoth Labs products will pack twice the punch for Washington cannabis consumers with our high THC strains and superior terpene profiles,” said Mike Tyson, Chief Brand Officer and Co-Founder of Tyson 2.0. “Cannabis of this craft can truly elevate the mind and spirit. I look forward to sharing my cannabis healing journey with fans across Washington.”

 


Dave HodesJune 30, 2022

8min3590

Field Trip Health Ltd. (NASDAQ: FTRP) reported fiscal fourth-quarter and full-year 2022 results for the period ending March 31, 2022, and provided a business update today. All results are reported in Canadian dollars. For the quarter, Field Trip earned patient services revenues of $1,724,102 from its twelve clinics in operation, an increase of $1,197,667 or 228%, over the fourth quarter ended March 31, 2021.

Analysts put earnings estimate at -$.72/share for 2022, steady to -$.72/per share in 2023. Revenue estimates are encouraging, with analysts predicting 2023 year-end revenue to reach a little over $12 million from $4 million now (an increase of $3,899,234 or 406% over the prior fiscal year), with a projected sales growth of 197 percent. Four of five analysts have positioned Field Trip as a buy for now, as they predict it’s heading toward a price target of $12.84/share. 

 Field Trip reported a net loss of $14,170,285 which was mostly attributed to total operating costs of $14,323,644. This compares with a net loss of $7,950,590 in the fiscal fourth quarter of 2021. The increase from the prior year primarily reflects the company’s focus on growing the clinic’s business and continued investment in its drug development pipeline. Net loss for the comparative prior fiscal year was $23,117,607. 

The company is still working to resolve an issue with NASDAQ that it was not in compliance with the minimum bid price requirement ($1 per share) which is necessary to allow it to continue to be listed on the NASDAQ Global Select Market, one of three tiers of the NASDAQ stock market. The company went below $1 per share on May 4, 2022. Volume spiked on that same day (803,000) to its second-highest level since the stock was first listed on July 29, 2021. It has until December 31 to raise its stock price and regain compliance. The stock price hit a low of $.76 on May 11, and has struggled to rise much above that level ever since.

Earnings Call

On the company earnings call were Joseph del Moral, co-founder and CEO; Ronan Levy, co-founder and executive chairman; and Donna Wong, chief financial officer. Paula Amy Hewitt, vice president and general counsel, and Dr. Nathan Bryson, chief scientific officer, also joined in.

Del Moral talked first about the strategic review of the company. “The strategic review confirmed that both divisions of Field Trip are equipped and ready to successfully operate as independent companies, with distinct strategies, dedicated management teams and the capital resources required to execute on the respective business priorities.”

Other highlights included:

– The District of Columbia clinic began generating revenues in March 2022. On a year over year comparative basis, revenue of $526,435 in Q4 2021 was generated from the Toronto, New York, Santa Monica, Chicago and Atlanta clinics. The quarter over quarter revenue increase was in part due to the one additional clinic as compared to the prior quarter. 

– Total operating expenses in the fiscal fourth quarter were $14,323,644 and were comprised of the following: general and administrative expenses of $7,432,602, patient services expenses of $2,691,335, research and development (R&D) expenses of $2,333,724, depreciation and amortization of $1,124,854, sales and marketing expenses of $434,781 and occupancy costs of $306,798. 

– Total operating costs for fiscal year 2022 were $57,902,159 compared with $20,055,929 in fiscal year 2021.

– As of March 31, 2022 Field Trip had unrestricted cash and cash equivalents and restricted cash of $64,496,653.

– During the fiscal fourth quarter, Field Trip continued to advance its drug discovery work which is focused on the research and development of its novel molecule, FT-104, as well as other molecules under development, specifically the FT-200 series.

Levy said that, over the coming months, there will be an evolution in the business strategy for the clinic’s division as it becomes Fieldtrip Health and Wellness. “The focus today has been on validating that psychedelic assisted therapies can be safely, effectively, and reliably offered as a therapeutic option for the millions of people who struggle with mental health challenges,” he said. “We will continue to build upon our strong foundation as a leader in the industry, with a focus on growth and client numbers but also implementing further operational improvements to scale our physical footprint efficiently.” 

He said that there will be a new emphasis on expanding the Field Trip ecosystem in a capital-efficient manner, including building on the launch of their Field Trip at Home program, plus a greater emphasis on their digital tools, particularly the Trip app. “It will start to play a much more central role as the conversation around psychedelics emerges from a third line treatment to a much more social and cultural conversation. The opportunities in the psychedelic industry as it continues to evolve are near boundless. With Field Trip Health and Wellness, we plan to be at the forefront of the most exciting ones.”


StaffJune 30, 2022
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3min7220

Despite being in financial trouble, cannabis tech firm Akerna Corp. (Nasdaq: KERN) announced the pricing of an underwritten public offering of 29,382,861 units with common stock warrants. The units are being sold at a public offering price of $0.23 per unit and the pre-funded units are being sold at a public offering price of $0.2299 per pre-funded unit. The news sent shares tumbling almost 50% in early trading to lately sell at 14 cents per share. The offering should bring in roughly $6.7 million.

The company said it would use the proceeds for general corporate purposes, including servicing our ongoing debt obligations under our convertible notes, working capital, marketing, product development, and capital expenditures. The company ended the first quarter with $10.2 million in cash.

Just last month Akerna said it would engage in a plan to cut its workforce and operating costs in order to focus its resources, accelerate its path to profitability, and create stakeholder value. These moves won’t be cheap as the company said it expects to report $690,000 in total costs in its second quarter of 2022 to pay for the layoffs, including the following cost elements: $630,000 in severance and associated payroll taxes; $40,000 in legal costs; and $20,000 in employee insurance benefits.

The company has noted when it told investors that it was undergoing a strategic review, that it would need additional funding. Former CFO John Fowle said at the time, “The ability of the company to continue as a going concern is dependent on our ability to secure other sources of financing, reduce debt, and attain profitable operation. Our corporate liquidity requirements primarily include payroll costs, corporate overhead expenses, and debt service costs and our current sources of liquidity include cash on hand, as well as proceeds we anticipate from the access to our ATM programs. The board is addressing the working capital deficiency and considering all options available to the company in the best interest of our shareholders.”

The company’s recent filing spelled out the news more starkly saying, “If we cannot timely raise additional funds, we may also be unable to meet the financial covenants of the Senior Convertible Notes, which could result in an event of default under those instruments which could negatively impact the company.”

 

 

 


Dave HodesJune 30, 2022
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8min4891

Microdosing psychedelics is quickly becoming a trendy new mental and physical wellness event that athletes, celebrities, and everyday business people are doing it as a daily ritual that is sometimes even encouraged by their bosses

In fact, the very term “microdosing” is working into common usage as just another way of saying you tried some thing, or attended some event, or ingested some substance—but just not a lot of it.

The term came into play as a common part of the work of drug researchers and scientists who measure what could or what should be an allowable, safe and effective dose of any psychedelic for human consumption, focusing mainly on psilocybin but inclusive of other psychedelics. 

The term actually comes from pharmacological drug development and guidelines from the Food and Drug Administration (FDA). Scientists report that, in the case of LSD and MDMA, psychedelic microdosing would be 5–10 percent of a usual psychoactive dose. Typical doses can be as small as one-twentieth of a typical recreational dose, sometimes even less. 

For example, a microdose of LSD might be 6–25 micrograms, or a microdose of psilocybin might be .1 to .5 grams of dried mushrooms.

To be sure, consuming a microdose of psychedelics combined with coffees or teas is also becoming popular—but just not the tested and approved coffees and teas you can get online or in any store. You have to actually get your psychedelic substance du jour from whatever trusted (illegal) source you have, and mix your own versions of a what you hope to be a measured, safe and effective microdosed concoction.

Yes, there are psilocybin microdose products (magic truffles) available in some countries, such as the iMicrodose kit from Red Light Holland (OTC: TRUFF), growing their truffles in Holland and selling kits in other countries where it is allowed. 

There is also Earth Resonance, a company also based in the Netherlands, also selling packages of microdoses of magic truffles that they recommend taking in the morning blended in a smoothie, chewed raw or put in morning tea.

But what’s going on in this country where psilocybin, LSD and MDMA are still illegal? It’s a do-it-yourself, wait and see attitude, with entrepreneurs lining up and ready to go. 

One example: The CEO of Denver-based CBD coffer maker Strava Coffee, Andrew Aamot, announced that they were envisioning bringing microdosed psilocybin-infused coffee and tea products to market. This was in July 2019, just months after the decriminalization of psilocybin was approved in Denver in May, 2019. But since that announcement, no updates have been published.

There are the important practicalities of microdosing to be better understood. When you are doing your own microdosing, be careful. There are still a lot of unknowns. There are many different kinds of psychoactive mushrooms with different strengths of hallucinogenic qualities. One study stated that the effects of microdosing “remain anecdotal,” and in the absence of quantitative research on microdosing psychedelics, “it is impossible to draw definitive conclusions on that matter.”

Another study found that, while most anecdotal reports focus on the positive experiences with microdosing, “future research should also focus on potential risks of (multiple) administrations of a psychedelic in low doses. To that end, (pre)clinical studies including biological (e.g. heart rate, receptor turnover and occupancy) as well as cognitive (e.g. memory, attention) parameters have to be conducted and will shed light on the potential negative consequences microdosing could have.”

And there is yet another study that showed that the effects of microdosing psychedelics versus using a placebo were about the same. In other words, participants in the research believed they felt better mentally even without taking the psychedelic substance that was being studied. 

What researchers are saying is that you’re taking some serious health chances doing your own microdosing until they can do more studies and figure microdosing out—as the psychedelics renaissance proceeds full steam ahead. 

So OK—it’s likely that the evolution of the revolution will soon reveal a solution to your motion for a potion. Microdosing is a full-fledged consumer trend introduced and promoted by the hip and connected that is slowly but surely trickling down to the everyday citizen as the psychedelics industry picks up momentum and broadens its appeal. 

The message today seems to be microdose at your own risk, but let the researchers hash out the details for a safer experience tomorrow—if you can wait that long.


StaffJune 30, 2022
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Grown Rogue International Inc.  (CSE: GRIN) (OTC: GRUSF) reported its fiscal second-quarter 2022 results for the three months ending April 30, 2022. Grown Rogue reported revenue rose 72% to $4.7 million versus $1.37 million for the same time period last year. Sales also rose sequentially from the first quarter’s revenue of $3.73 million. 

The company delivered a net income of $144,734 versus last year’s net loss of $1.4 million. The company said this was the fourth consecutive quarter of positive net income and positive operating cash flow, before changes in working capital.

Grown Rogue had another very strong quarter, reporting positive operating cash flow, net income, and free cash flow,” said Obie Strickler, CEO of Grown Rogue. “In Q2, we estimate we had one of the lowest average indoor selling price of any public cannabis company at $872 per pound of whole flower ($1.92 per gram) while reporting 23% operating cash flow margins, before changes in working capital”, continued Mr. Strickler. “We continue to evaluate opportunities for new markets where we can bring our craft quality and efficiencies to provide better access for patients and consumers. Oregon had a particularly strong quarter with revenue up 70% quarter over quarter even while the overall market was down slightly. The company launched pre-rolls in Michigan during the quarter and we are excited about the initial receptivity in this category. I could not be more proud of our team as we were north of $1M in EBITDA for the third consecutive quarter and have established Grown Rogue as the consistent market leader in the Oregon flower market, one of the most competitive states in the US. We are laser-focused on continuing to become more efficient while staying on trend with leading genetics and quality.”

Revenue Breakdown

Breaking down the revenue results, Grown Rogue’s Oregon market delivered revenue of $2.36 million compared to $1.37 million in the second quarter of 2021, an increase of 72%. It also jumped from the first quarter’s revenue of $1.39 million.  The average selling price of indoor whole flower was $719 per pound. The price dropped from the first quarter price of $781 per pound. The monthly indoor production increased to approximately 800 pounds of whole flower in the second quarter, with expectations to be at or near 1,000 pounds per month in the third quarter.

The Michigan market reported revenue of $2.34 million compared to pro-forma revenue of $1.38 million in the second quarter of 2021, an increase of 70%, but flat from the first quarter’s sales. The average selling price of indoor whole flower was $1,182 per pound. The price also fell in Michigan from the first quarter’s $1,322 per pound. The monthly indoor production of whole flower increased to approximately 550 pounds in the second quarter of 2022, with expectations to be at or near 750 pounds per month in the third quarter.

 

 


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