4Front Ventures Archives - Green Market Report

Debra BorchardtApril 25, 2022


Cannabis investors have seen stock prices tumble even as cannabis companies report increasing sales. Green Market Report recently asked some leaders in the cannabis industry how they felt about the market in general despite the market pessimism.

Brandon Pollock, CEO and Co-founder of Theory Wellness

Theory Wellness, Inc. is an independently owned and operated vertically integrated cannabis brand. The company operates retail, cultivation, and product manufacturing across Massachusetts and Maine, including the cannabis-infused seltzer brand Hi5. 

  • Leading analysts have recently projected reduced short-term cannabis industry growth, with a less than optimistic outlook for federal reform. Do you agree with this projection?

From our view, no, we feel as optimistic as ever about the growth and future of regulated cannabis and have no concerns about the trajectory of the market. In our view, stock market prices are not a good indication of actual on-the-ground performance and the expectations of many independent operators. Especially on the East Coast, we’re expecting explosive growth in the next few years as New York, New Jersey, and Connecticut implements adult-use sales. On the Federal side, it’s only a matter of time before cannabis becomes legal, as it is one of the policies most supported by the American populace.

  • What may be causing the current market pessimism? 

Generally, it seems this pessimism has risen from the sluggishness of Federal reform coupled with the underperformance of publicly traded cannabis companies. We’ve seen multiple large-scale multi-state operators (MSOs) posting revenue misses or struggling with profitability. From our view, we are slightly surprised by how much the market seems to value Federal changes in law, as many organizations are not prepared to handle such a monumental shift in the first place, and many businesses ascribe significant value to the moats they build around themselves on a state-by-state basis – especially in markets with limited numbers of licenses. 

  •  Do you agree with analysts who are saying that the current landscape will help MSOs consolidate the industry? If so, what is the projected industry impact? 

We would generally disagree – many consolidation strategies and deals are based on using stock as currency, and with depressed stock prices and heightened uncertainty of the future, many independent operators will be wary of deals that may have looked attractive twelve months ago. The only exception may be increased activity from smaller publicly traded companies combining all stock transactions with larger counterparts.

  • When can we expect market projections to turn back around? Federal legalization prospects?

On a macro scale, both are contingent on one another. The larger MSOs betting big on legalization cast the most considerable shadow over the industry. Until legalization starts to loom, market forecasts may not brighten. However, we still believe that smaller independent operators in the industry might be running with a narrative contrary to the gloomy forecast surrounding the largest operators.

Andrew Thut, Chief Investment Officer at 4Front Ventures

Headquartered in Phoenix, AZ, 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) is a national, vertically integrated multi-state cannabis operator with operations in strategic medical and adult-use cannabis markets, including California, Illinois, Massachusetts, Michigan, and Washington. 

  • Leading analysts have recently projected reduced short-term cannabis industry growth, with a less than optimistic outlook for federal reform. Do you agree with this projection?

It’s true that MSOs and cannabis stocks, in general, have sold off over the last year, but there’s a bigger question here: are companies struggling from a business perspective? Right now, there is a risk-asset sell-off and overall market volatility. As such, growth stocks like those involving MSOs, for example, have been selling off. Perceptions around the larger cannabis markets have also been under pressure recently. Take sentiment around California as an example; challenges such as pricing pressures, oversupply, and the illicit market continue to affect confidence in the sector. We feel differently here at 4Front, and see the huge opportunity to take advantage of those same perceived challenges and have focused accordingly. Production of low-cost, high-end products with scale efficiencies is a proven 4Front strategy that will allow us to build real value in the largest cannabis market in the world, while challenging public perspective along the way. 

  • What may be causing the current market pessimism? 

Our view is that current market sentiment is due to SAFE banking and cannabis liberalization being stalled, temporarily we believe, at the federal level. Legalization and liberalization will be major steps forward, but at the end of the day, they won’t transform enough of the sector to prevent risk-asset sell-off; ultimately, strong and reputable companies will be the ones to do that. Meanwhile, we can’t just sit idly by and wait for wide-sweeping federal reforms to be enacted. When Biden won, there was a lot more optimism that such reforms would be enacted – but with a split Congress, intense party allegiances, and the unwillingness of politicians to work with their counterparts across the aisle, reform measures have stood in limbo. This has led to disillusionment among investors, which has further hindered industry momentum. Whether you’re talking about 4Front, the folks at Cresco, Trulieve or another top-performing MSO, we are all going to continue focusing on building robust businesses, optimizing our production processes, building consumer awareness and loyalty, and strengthening our fundamentals. 

  • Do you agree with analysts who are saying that the current landscape will help MSOs consolidate the industry? If so, what is the projected industry impact? 

We agree with those analysts who believe the current landscape will help MSOs consolidate the industry. Smaller companies with less capital and less efficient processes will benefit from being acquired by larger companies that have optimized production and scaling capabilities. In the case of 4Front, we feel the innovative automation processes we’ve developed in California at our state-of-the art Commerce facility could easily be applied to a broader portfolio and an even larger footprint, realizing nearly immediate value in a consolidated model. We know that other operators have similarly improved their processes, which will lead to further inevitable consolidation. Increased consolidation will bring greater efficiencies and innovation, which will ultimately benefit consumers as prices will be more affordable and there will be more refined, higher quality, consistent products on the market. 

  • When do we expect market projections to turn back around? Federal legalization prospects?

Even as the House just passed SAFE banking for the sixth time, it is yet again doubtful that the Senate will follow suit before the midterms. Without SAFE banking, US institutional investors are still locked out of the market. Their hands are tied. But on the flip side, this presents a huge opportunity for retail investors, who under normal circumstances would only hear about companies like 4Front after all institutional money has already flowed in.

I have spent a lot of time on the buy-side in the small-cap space, and what we’re seeing in U.S. cannabis is truly unique. No other industry has as many quality high-growth companies with solid fundamentals and sustained profitability with such low valuations. With that in perspective, investors’ concerns about the future of cannabis are a bit shortsighted. Investors need to focus on well-run, well-capitalized, promising cannabis companies with good long-term prospects, and then adopt a buy and hold strategy. Eventually, the wider market will care – and when it does, it will care a LOT. To get ahead, I think investors need to think about 4Front and the other MSOs as they would a business in any other sector: you’re buying a share of a business – is the business solid? At 4Front, we’re growing and doing it in a way that supports the bottom line; on top of this, investors should keep the following in mind: cannabis is a kicker that will provide a huge upside when inevitable regulatory reform passes.

Robert McEvoy, Vice President of Customer Success, Corporate Development, and Government Affairs at Agrify Corp.

Agrify Corp. is a rapidly growing developer of premium grow solutions for the indoor agriculture marketplace. 

  • Leading analysts have recently projected reduced short-term cannabis industry growth, with a less than optimistic outlook for federal reform. Do you agree with this projection?

The notion that cannabis outlooks are less than rosy is inconsistent with national acceptance perspectives, high-profile celebrity involvement, and increased M&A and investment activity. Looking ahead, more and more states are actively considering implementing adult-use sales, establishing medical programs, or expanding existing markets. Over the last year, New Jersey and New York have taken significant steps in launching adult-use programs projected to be multi-billion dollar markets for each state. States such as Ohio and Oklahoma have not only built robust medical industries but have created profitable single-state operators primed for expansion in and out of state. Further, the new wave momentum of purpose-built companies and products that focus on social equity, sustainable agriculture, and delighting an increasingly segmented customer base, is fostering a fertile environment for existing brands to be reborn, and providing new-to-world products an inclusive space to succeed.

  • What may be causing the current market pessimism? 

Short-term cannabis faced two impactful circumstances back-to-back over the last two years: a vaporizer crisis fueled by illicit products making consumers sick, and a global pandemic resulting in lockdowns and supply chain problems. That said, state regulators’ mistrust of unfamiliar vaporizer products was met with credible lab-based testing and transparency in operator quality control programs – each of which bolstered consumer confidence and highlighted bad actors, both legal and illegal. Counterfeit and cheap products have penetrated non-regulated consumer channels for centuries, so I can’t realistically call adverse reactions to carelessly made, non-tested illicit products with harmful additives an unforeseen circumstance. However, accurate and informative health and safety campaigns should have been carried out more responsibly, particularly by state agencies tasked with helping the public differentiate between safe, lab-tested products and non-compliant mystery oil. Regarding the pandemic, clearly its global presence and reach were unexpected – but beginning in February 2020, operators throughout the industry had a choice: either acknowledge and proactively plan for an unknown timeline of the virus’ impact, or continue business as usual with minimal adjustments, troubleshooting as time goes on. A large part of succeeding in this industry is accepting unpredictability and remaining operationally nimble.

  • Do you agree with analysts who are saying that the current landscape will help MSOs consolidate the industry? If so, what is the projected industry impact? 

Consolidation is an inevitability of any industry, no matter the commodity or service that is monetized. While MSO acquisitions will continue, so will the development of joint venture partnerships between single state operators creating rapid multi-state market share. There’s an increase in new state initiatives aiming to empower local residents, small to midsize businesses, and regionally popular brands through micro-licenses with future expansion capabilities and uncapped operator counts. In terms of industry impact, why should we think cannabis CPGs would be any different from the multitude of products currently produced by large and small companies alike? Ultimately, the customer is in control of where they spend their money and what they spend it on. The industry will continue to be shaped by operators who listen to their customer base in all aspects, from production practices to lifestyle identity. 

  • When can we expect market projections to turn back around? Federal legalization prospects?

My optimism has never left the market potentials and projections discussion. In fact, with brand licensing, white labeling, contract services, and expanded licensing categories to include onsite consumption and home delivery, more growth opportunities exist today than ever before. As for federal legalization, prospects have never been within industry grasp, and will not be any time soon. I think it is more likely that states with similar programs that share borders will build governmental coalitions to allow for interstate transport, shared resource allocation, and tax collection, placing consequent pressure on the federal government to act before the legislative and executive branches enact reform on their own.

Brooke Butler, VP of Partnerships, Simplifya

Headquartered in Denver, CO, Simplifya is the leading advanced technologies and software platform powering regulatory and operational compliance for owners, operators, insurers, law firms, municipalities, governments; regulatory bodies; and cannabis-related banking and financial institutions with remaining compliant under FinCEN Cannabis Banking Guidance. 

  • Leading analysts have recently projected reduced short-term cannabis industry growth, with a less than optimistic outlook for federal reform. Do you agree with this projection?

While certain parts of the cannabis industry may have experienced a downturn, others like our business saw steady to accelerated growth. There has certainly been disappointment and disillusionment over the Biden administration not enacting legalization at the federal level, but I expect more states to take legalization into their own hands, making federal reform less and less of a growth hindrance. Just because there is currently market volatility and risk-asset sell-off, this does not reflect the overall health of the cannabis sector. In fact, we expect to see continued growth as several key markets such as New York, New Jersey, New Mexico and more are in the process of getting their adult-use programs off the ground and running, increasing consumer access to legal cannabis. 

  • What may be causing the current market pessimism? 

There were high expectations after the 2020 national election that the incoming Biden administration would push for federal reform, at least on some level, but the lack of movement on that front has disappointed a lot of investors. While I personally had a more hopeful outlook for some widespread cannabis reform being enacted at the federal level, I was not surprised by the market reaction and how quickly sentiments changed when it became clear federal reform likely wouldn’t pass before midterms. Even aside from cannabis, the stock market as a whole is performing poorly, and investors have been selling their shares in promising companies that are not yet profitable. Expectations have lowered across the board and this has exacerbated the downward pressure on cannabis stocks. 

Many investors seemed to think federal legalization would be a magic bullet without which the industry would suffer – however we have seen that is not the case. Cannabis companies are still blazing forward, optimizing their strategies and fortifying their business. Due to the hindrances brought on by the lack of federal legalization, cannabis companies have been forced to be agile and tactical to compete, and this has bolstered the sector as a whole. While ultimately we’re striving for federal legalization, to really get capital into the space, legalization alone will not suffice. Institutional investors need effective means of vetting companies to recognize worthy prospects. The way we’ll get there is with more companies utilizing RegTech solutions to demonstrate their compliance and organizational strengths.

  • Do you agree with analysts who are saying that the current landscape will help MSOs consolidate the industry? If so, what is the projected industry impact? 

Yes, I think we will undoubtedly continue to see consolidation in the industry. Interest rates are projected to rise and smaller companies will have an even harder time accruing the capital necessary to build out operations and scale, so they will benefit by being acquired by larger, more established companies. On the flip side, given the fractured regulatory landscape and the fact that interstate commerce is not on the horizon, larger companies will benefit from acquiring smaller companies that already have operations in place in states they want to enter. Larger cannabis companies are not banking on interstate commerce becoming a reality anytime in the imminent future, so they’re opting for M&A to foster growth in new markets.  That being said, I hope we see individual states helping to lower the barriers to entry for social equity licensees and smaller operators so we can establish a balance as the industry continues to grow. M&A should not be the only path forward for small businesses to survive.

  • When do we expect market projections to turn back around? Federal legalization prospects?

It is difficult to surmise when optimism will return to the market, as you never know with politics how things are going to shake out, but I do think people will look to see if and how cannabis reform is framed and discussed leading up to the midterm elections. The election results, as well as the rhetoric candidates use to discuss cannabis, will give us a clearer projection on what the path to federal legalization will look like. Outside of federal legalization efforts, you have to keep an eye on SAFE Banking; if that passes, it would make a huge positive impact on market sentiment.

Rob Sechrist, President of Pelorus Equity Group and Co-Manager of the Pelorus Fund

Headquartered in Newport Beach, CA, Pelorus Equity Group is the largest privately held provider of value-add bridge commercial real estate loans to entrepreneurs operating cannabis-use properties. The Company’s Pelorus Fund, a private mortgage real estate investment trust (“mREIT”), offers a range of innovative transactional solutions addressing the diverse needs of real estate investors and portfolio managers.

  • Leading analysts have recently projected reduced short-term cannabis industry growth, with a less than optimistic outlook for federal reform. Do you agree with this projection?

Yes and no. Last year, we experienced 434% year-over-year growth, and many other ancillary businesses also saw astounding growth in the sector. With operators moving into new states, much of our growth was fueled by a surge in build-outs, expansions and improvements. Some analysts in the marketplace may be failing to take a hard look at the long-term growth that we expect to see when these buildouts are operational. On paper, that revenue is not yet online for many of the operators, but it will be. So while there’s a mix of companies that are currently seeing sustainable growth and others that are lagging behind, this is only part of the story. Analysts should consider innovative companies that have not yet achieved growth but are expected to in the near future. Long term, we are confident that the sector will be one of the best growth opportunities in a generation. 

  • What may be causing the current market pessimism? 

Though the cannabis industry has added hundreds of thousands of jobs, millions in tax dollars, and large-scale infrastructure projects without receiving government handouts, the current administration appears reluctant to use any remaining political capital on driving cannabis legislation. Unfortunately, despite the public comments supporting cannabis reform during the run up to the last election, government inertia in this sector is far from surprising; it’s certainly caused a lot of disillusionment and pessimism, which has been holding back the industry as a whole. One way for the current administration to signal to the country that they are pro-cannabis would be to reinstate the Cole Memo, which was rescinded in 2018. The Cole Memo laid out key guidelines for what federal representatives should focus on in enforcing cannabis, which created a sustainable framework where legal cannabis industries and federal enforcement agencies could peacefully coexist. The rescission brought more uncertainty and fear in the eyes of investors; if the government were to reinstate, this would bring about more optimism in the cannabis space. 

  • When do we expect market projections to turn back around? Federal legalization prospects?

Perhaps this is a bit bleak, but I think the prospect of federal legalization will likely only be attainable once the next administration, whether it be Democrat or Republican, has majority control of both the House and the Senate. The stark divide between parties has unfortunately become a defining characteristic of modern American politics, and as a result, progress for cannabis on the federal level has been at a standstill. In the meantime, we need to keep educating investors and shift general rhetoric away from the notion that federal legalization will be a catch-all to uplift this industry. There are many cannabis companies that have managed to thrive without federal legalization and this demonstrates the ingenuity and agility that characterizes much of the sector. If investors focus more on company fundamentals and specific state legislative actions that open the doors to more prosperity in the cannabis space, there will be revitalized optimism


Debra BorchardtMarch 30, 2022


4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021. The company reported that GAAP revenue increased 68% year-over-year, and 10% sequentially to $28.5 million in the fourth quarter. 4Front did not disclose whether it had a net loss or income for the quarter, while it did say adjusted EBITDA for the quarter was $13.2 million, up 160% from the same time period in 2020.

For the full year of 2021, GAAP revenue increased 81% year-over-year to $104.6 million. The net loss reported by 4 Front was $34.9 million for the year, an improvement over 2020’s net loss of $47 million. The company also said that cash flow from operations increased to $7.4 million in FY 2021 as compared to a loss of $14.0 million in FY 2020.

“Our fourth-quarter results showed strong year-over-year growth, representing steady execution in the face of macro headwinds and reinforcing our thesis of consistent, low-cost production at scale,” said Leo Gontmakher, Chief Executive Officer of 4Front. “2021 saw substantial operational achievements within our company which continue to set the stage for a considerable ramp in production and sales growth through 2022 and beyond.”

In the fourth quarter, 4Front announced its proposed acquisition of NECC, which was subsequently completed in late January 2022 following approval by the Massachusetts Cannabis Control Commission. The acquisition of NECC’s state-of-the-art 55,000 square foot cultivation and production facility significantly bolsters 4Front’s strategic position in the core Massachusetts market and expands the Company’s institutional knowledge of lighting, airflow, and fertigation techniques. The transaction enables the broader penetration of 4Front’s diverse range of low-cost, high-quality products and brands, and increases its scale to enable wholesale operations in the state.

“Revenue growth in our Massachusetts operations will be greatly bolstered by the closing of the acquisition of New England Cannabis Corporation (‘NECC’) in late January, which more than doubled our total flowering canopy and nearly tripled our kitchen, processing and distribution space. Additionally, the cultivation practices developed by the NECC team were already operating at what we believe to be the industry’s highest standards. Coupled with our advanced production methodologies, we believe we will be a formidable wholesaler in the competitive Massachusetts market. As the integration of NECC continues to ramp over the coming weeks, we are intent on further increasing the market penetration of our award-winning brands in the state in the near term.”

Island Cannabis

Earlier today, 4Front announced it was buying Island Cannabis Co. for an undisclosed amount.

“This acquisition of Island is the first step of a broader California strategy that supports our earlier decision to construct what we believe is one of the cannabis industry’s largest and most efficient processing centers,” said 4Front CEO Leo Gontmakher. “Island is widely recognized for its high-quality, diverse line of pre-rolls, flower and infused products, and has been remarkably successful in building a loyal following in the extremely competitive California market. Once integrated into 4Front’s Commerce facility, we can reduce production costs and scale volume of the Island Cannabis Co. brand. This will accelerate Island’s growth by making a respected brand even more attractive to California retailers and consumers. We are also ecstatic to have Founder and CEO, Ray Landgraf, COO, Brandon Mills, and the Island leadership team join the 4Front family. We believe our Company’s success in acquiring and retaining talent to our management team is imperative to value creation.”

Debra BorchardtNovember 17, 2021


4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) announced its financial results for the third quarter ended September 30, 2021 with total revenues of $25.9 million, topping last year’s $12 million for the same time period for a gain of 70%. However, the company experienced a 4% sequential drop in sales from the second quarter. The company blamed the decline in sales to permitting delays during the local review process for both the Commerce, CA facility and Brookline, MA dispensary. The revenue was also short of the Yahoo Finance average analyst estimate for revenue of $27 million. The net loss for the quarter was $4.5 million, which was slightly higher than last year’s $4 million. 

“While we experienced some regulatory delays in getting Commerce up and running, we are more confident than ever that we have the tools, facilities, and teams in place to meet our considerable growth expectations in the coming year,” said Leo Gontmakher, Chief Executive Officer of 4Front. “During the quarter we made meaningful progress in the development of our three key growth markets of CaliforniaIllinois, and Massachusetts. In Illinois, we officially broke ground this summer on the construction of our cultivation and production facility in Matteson. Construction of the facility is expected to last through 2022, with Phase 1 anticipated to come online in the first quarter of 2023, offering 4Front’s in-house brands and products to the growing retail and wholesale markets in the state.”

Delays In California

4Front also reported that its third-quarter adjusted EBITDA grew 103% year-over-year to $7.5 million, up from $3.7 million in 2020 for the same time period. This was flat when compared to the second quarter, representing an Adjusted EBITDA margin of 23% as compared to Adjusted EBITDA margin of 22% in second quarter. “While higher overall dispensary sales and increased sales of the company’s internally produced products continue to drive systemwide margin improvements as designed, meaningful quarterly EBITDA growth predicated on a fully operational California manufacturing facility was temporarily hindered due to delays in the local review process for the Commerce facility.

4Front’s branded and wholesale manufactured products will be sold to licensed dispensaries in California via its partnership with Nabis, a leading distributor of cannabis products covering 100% of licensed retailers in the state. The facility is currently producing nine of 4Front’s 20 brands and 164 different SKUs including gummies.

“During the quarter we made meaningful progress in the development of our three key growth markets of CaliforniaIllinois, and Massachusetts,” Mr. Gontmakher added. “In Illinois, we officially broke ground this summer on the construction of our cultivation and production facility in Matteson. Construction of the facility is expected to last through 2022, with Phase 1 anticipated to come online in the first quarter of 2023, offering 4Front’s in-house brands and products to the growing retail and wholesale markets in the state.”


Debra BorchardtOctober 15, 2021


Viridian Capital Advisors analyst Jonathan DeCourcey is looking into his cannabis crystal ball and says skip 2022 – it’s 2023 that should be the focus for investors. He points out that 2023 will be the first full year with adult-use cannabis sales in the key markets of Connecticut, New Jersey, and New York. He wrote,

Based on 2023 expectations, top operators are likely to look much cheaper overall than they do today.

The analyst said that the cannabis market’s current bear market is unwarranted and presents buying opportunities. While company estimates for 2022 have been increasing, he says the real story will be what happens in 2023. He wrote, “As we look to 2023, the opportunity becomes even more favorable. Even omitting the share gains for large public players (both through execution and consolidation) and conservatively growing estimated 2022 revenues by the roughly 20% growth rate for broader US cannabis sales in 2023 and leaving adjusted EBITDA margin levels unchanged from 2022 estimates, US cannabis companies will be trading at a roughly 50% discount to the one year forward projections of this winter with 2023 multiples (’23EV/Sales at 2.1x and EV/EBITDA at 6.3x). These valuations levels are incommensurate with the high growth nature of US cannabis and look inexpensive even relative to slower growth more mature industries.”

In his opinion, many of the companies considered to be the top operators for 2023 are not necessarily the biggest by market cap or the most expensive today. His big list of companies that he believes look even better when considering the 2023 numbers are Ascend Wellness, Ayr Strategies, Body & Mind, Cansortium, Columbia Care, Glass House, Goodness Growth, Jushi, TerrAscend, and Tilt Holdings. The two companies DeCourcey specifically highlighted in his report that was published on October 15, was 4FrontVentures (OTC: FFNTF) and Planet 13 (OTC: PLNHF).


Viridian has a Buy rating on 4Front and a $2 target price. The analyst noted that the 2022 estimates only represent about 40% of the company’s long-term plans. 4Front recently broke ground on a cultivation and production facility in Illinois called “Big Daddy.” The first phase of this project will be a 250,000 square foot cultivation facility that will open in early 2023 giving the company 65,000 square feet of cultivation versus its current 9,000 sq. ft. today. This expansion will allow 4Front to sell more house brands at its own locations, plus open itself up to wholesale business. The company has said that the initial buildout will allow it to produce $100 million of sellable product.

In addition to Illinois, the Massachusetts operations are expanded by a recent acquisition of  New England Cannabis Corporation. 4Front said that NECC is expected to be significantly accretive to its EBITDA expectations for 2022 and will immediately scale 4Front’s presence as a dominant wholesaler and producer in the state. The acquisition is said to more than double 4Front’s total flower canopy in Massachusetts to over 30,000 sq. ft, with further expansion potential for up to an additional 10,000 sq. ft. of canopy, and will approximately triple 4Front’s kitchen, processing, and distribution space.

4Front also has an outstanding license application in New Jersey, which could also present a big opportunity. DeCourcey also pointed out that 4Front could end up being a potential takeover target by a larger MSO.

Planet 13

Planet 13 was truly beaten up by the pandemic. As a dispensary superstore that thrived on tourist traffic, the lockdown was especially difficult. Fast forward to today and Vegas is coming back. The MJ Biz conference next week is sure to bring lots of attention to the flagship store in Las Vegas and could be a short-term catalyst for the stock. Beyond that, the company has also opened a superstore in California.

Yet the analyst stated that right now, Planet 13 appears expensive as it has an EV/EBITDA multiple of 13.8x or a roughly 81% premium to the broader peer group. Still, he doesn’t think the 2022 outlook tells the whole story for the retailer. Looking even further out to 2023 results, Planet 13 has plans to open another store in Chicago now that it has a license through a joint venture and it acquired a Harvest license in Florida.

“We anticipate additional expansion even beyond those two initiatives coming given the company’s well-capitalized balance sheet and management’s stated initiative of having at least eight Superstore locations open within the next five years,” wrote the analyst. He suggested Planet 13 could potentially buy smaller assets that could be built out and more stores in tourist-friendly cities. He also thinks Planet 13 could be a target for a larger MSO to acquire.


StaffAugust 4, 2021


After the market closed on Tuesday, cannabis REIT Innovative Industrial Properties, Inc. (NYSE: IIPR)said that it closed on the acquisition of a property in Illinois, and entered into a long-term lease with a subsidiary of 4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF). The purchase price for the property was $6.5 million (excluding transaction costs). 4Front is expected to construct approximately 250,000 square feet of industrial space at the property, for which IIP has agreed to provide reimbursement of up to $43.75 million. Assuming full reimbursement for the construction, IIP’s total investment in the property is expected to be $50.25 million (excluding transaction costs). 4Front intends to operate the property upon completion of construction as a licensed cannabis cultivation and processing facility.

“We are excited to expand our partnership with IIP as the Illinois marketplace continues its record-breaking sales streak,” said Leo Gontmakher, Chief Executive Officer of 4Front. “This next-generation cultivation and manufacturing facility will not only allow us to best meet the state’s robust market demand, but it will also broaden the reach of our innovative, low-cost cultivation and manufacturing methodologies.”

Illinois, the eleventh state to legalize cannabis for adult-use, commenced adult-use cannabis sales at the beginning of last year. In this first year of adult-use sales, Illinois’ regulated cannabis sales were over $1.0 billion in 2020, including $669 million in adult-use sales and over $366 million in medical-use sales. In June 2021 alone, reflecting the continued strong and growing demand, Illinois adult-use cannabis dispensaries generated over $115 million in sales (excluding medical cannabis sales), according to the Illinois Department of Financial and Professional Regulation. For the first time, in the first quarter of 2021, Illinois’ tax revenues from regulated cannabis sales surpassed tax revenues from liquor sales. IIP owns seven regulated cannabis cultivation and processing facilities in Illinois, representing a total expected investment of approximately $254.9 million, which includes commitments by IIP to fund future tenant improvements and construction at certain properties.

“We are thrilled to expand our long-term real estate partnership with 4Front with this new ground-up development project in Illinois,” said Paul Smithers, President and Chief Executive Officer of IIP. “We look forward to working closely with the 4Front team in the coming months on the development of this state-of-the-art facility, which we expect will provide 4Front with tremendous, cost-effective scalability and a highly controlled environment for production of the quality products that 4Front is known for.”

Debra BorchardtMay 24, 2021


4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) released its financial results for the first quarter ended March 31, 2021 with total revenues coming in at $22.9 million versus last year’s $12.6 million for the same time period. Net losses increased from $7.7 million in 2020 to $11 million for the first quarter of 2021. 4Front also reiterated its fiscal year guidance for Pro Forma Revenue of $170 -180 million and Adjusted EBITDA of $40 -50 million.

The company noted that pro forma revenue increased 26% to $31.4 million in the first quarter versus $25.0 million in the fourth quarter. 4Front said that retail sales and product adoption exceeded internal expectations. This increase was attributed to higher sales from the two Massachusetts dispensaries following the start of adult-use sales in the second half of 2020, and a very strong launch from the Calumet City dispensary that opened in December 2020.

“Our strategy of replicating low-cost production methods in new markets began to take shape and grow at scale in MassachusettsIllinois, and California in our first quarter, extending the momentum we created in 2020,” said Leo Gontmakher, Chief Executive Officer of 4Front. “Utilizing the cultivation and production techniques developed for our facilities in Washington, we have increased the yields and quality of our products produced in both Illinois and Massachusetts, which has enabled us to supply our adult-use dispensaries to meet the ever-increasing demand in those markets. As production increases, we plan to begin selling excess product into the wholesale market as well.”

Mr. Gontmakher added, “Continued positive momentum following the initiation of adult-use sales in late 2020 in both Georgetown and Worcester, Massachusetts, along with an exceptionally strong launch of our Calumet City, Illinois dispensary in December, contributed to our robust sequential Q1 sales increases and exceeded all internal expectations. Looking ahead, with the completion and opening of our manufacturing facility in Commerce, California just a few weeks out, we expect to be in the market imminently with our suite of high-quality, branded products. As the largest legal cannabis market in the world, California offers a unique opportunity to build efficient operations and create incredible products that are replicable across our nationwide footprint.”

Company Updates

4Front said in a statement that its 170,000 square foot manufacturing facility in Commerce, California is nearing completion and remains on track to be ready to serve the California cannabis market beginning in the second quarter. The company’s first suite of products will include edibles, tinctures, capsules and infused pre-rolls, including Marmas, Pebbles, Chewees, Hi-Burst, Verdure and Terp Stix. The company has signed a distribution agreement with Nabis, a leading distributor of cannabis products.

Construction of the third Massachusetts Mission Dispensary in Brookline is complete. Pending final approval from the Cannabis Control Commission, the grand opening is slated for June 2021. In Illinois, the recently announced development of our new cultivation and production facility continues as scheduled with construction beginning in the third quarter. The first phase, a 258,000 square foot building with 65,000 square feet of flowering canopy and approximately 70,000 square feet of manufacturing space is on track to break ground in Q3 2021.

Mr. Gontmakher concluded, “With revenue-generating operations now in CaliforniaIllinoisMassachusettsMichigan, and Washington, we are poised to further scale the business according to our expansion strategy for 2021. We continue to track towards our stated financial guidance for the year, anticipating $170 – $180 million in Pro Forma Systemwide Revenue and $40 – $50 million in Adjusted EBITDA.”

StaffDecember 17, 2020


Most can agree that 2020 was a year we’d like to leave behind. Even for the ‘essential’ business of cannabis, it was a challenging year with store closures and social distancing in grow facilities. Here now are several leaders in the industry weighing in with their thoughts on 2021.

4Front Ventures  (CSE: FFNT) (OTCQX: FFNTF) is a national multi-state cannabis operator and retailer, with a market advantage in mass-produced, low-cost quality branded cannabis products. 4Front manufactures and distributes a portfolio of over 25 cannabis brands including Marmas, Crystal Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness collection, distributed through retail outlets and their chain of strategically positioned Mission branded dispensaries.

Expert: Kris Krane, President


  • Cannabis is poised to be an even better market in 2021 for a variety of reasons.  New states like New Jersey and Arizona that legalized this November are poised to come online for adult use for the first time.  Newer markets like Illinois, Michigan, and Massachusetts are poised to expand and mature.  A Biden administration is likely to be friendlier towards this industry than the current administration. But most importantly, the larger companies in the space are now focused on operations and execution, resulting in better overall performance, revenue, and EBITDA.  I would expect that we will see more consolidation in 2021, as companies use some of their new profits to acquire businesses and market share.
  • 2021 will likely see a continued focus on operations and execution, separating out the major players from those that were always built on hype and smoke and mirrors.  We may see some name brands go under in 2021, but the cream will rise to the top and the likely eventual big winners in the market will start to emerge.

Clever Leaves 

A multi-national company with operations and investments in Canada, Colombia, Germany, Portugal, and the United States. The company is about to close a SPAC deal with Schulze Special Purpose Acquisition Corp. (NASDAQ: SAMA) to becoming publicly traded on NASDAQ this month.

Spokesperson: Kyle Detwiler, CEO


  • Expectations for the cannabis market in 2021: The market will increasingly perform well 
    •  As the pandemic lingers, we still see the medical cannabis market performing well. The resilience, professionalism, and creativity in times of setback, have been critical to the success of our team to navigate complex regulatory frameworks and to maintain our customer’s and investor’s support. While a great deal of cannabis companies are still strapped for cash, we were able to raise the necessary capital to withstand the market headwinds in these extremely challenging times and we believe this will help us achieve our ultimate goal of transforming the cannabis supply chain on an international scale.
    • With approximately $125 million raised to date, which includes institutional investors with a demonstrated track record in the cannabis sector, Clever Leaves has established significant competitive advantages and positioned itself to achieve global scale as we enter 2021 between its Colombian cultivation and extraction operations, its Portuguese cultivation facilities and its global distribution infrastructure in the EU, which is currently headquartered in Germany.
    • With a low-cost operating model, significant asset base and solid leadership, investors believe our company is well-positioned for substantial revenue and is expected to achieve positive free cash flow by the fourth quarter of 2021.
  • Defining theme for the cannabis market in 2021: M&A will play a huge role
    • M&A will be an ongoing theme as we enter the new year. As we are about to close our definitive agreement with Schultze Special Purpose Acquisition Corp. (SAMA) we will become a NASDAQ-listed public company and that will be a significant opportunity for strategic acquisitions. Clever Leaves’ global sales and distribution capabilities can be meaningfully expanded through strategic decision-making and thoughtful capital deployment, including through disciplined M&A.
    • Clever Leaves is expected to be one of a few cannabis companies listed on the NASDAQ thereby making this investment opportunity available to a substantially broader base of investors. Our business combination with SAMA will significantly strengthen our balance sheet and take us to the next level, enabling us to accelerate the commercialization of our high-quality products as well as expand our operations and distribution in attractive markets around the world.

NewLake Capital

A cannabis real-estate investment vehicle that has tenants across the supply chain in the U.S. including cultivation, manufacturing, and retail. The company owns 20 properties across 8 states that are operated by experienced, well-capitalized medical and adult-use operators like Columbia Care, Trulieve, Curaleaf, and PharmaCann.

Spokesperson: Anthony Coniglio, CEO


  • Expectations for the cannabis market in 2021:The Cannabis industry will continue maturing on all three fronts of financial performance, investor acceptance, and legalization.
    • We believe the Cannabis industry will continue maturing on all three fronts of financial performance, investor acceptance, and legalization.  Good 2020 financial performance will improve in 2021, more investors will support the industry and legislative action is only a matter of time.
    • The election sealed the fate for the cannabis industry declaring it a clear winner in the years to come. This success at the ballot box is a strong catalyst for the cannabis industry. Each state with ballot initiatives has moved forward to legalize cannabis for medicinal or adult-use, further solidifying the inevitability of federal legalization and positioning the industry for sustainable long-term growth in 2021.
  • Defining theme for the cannabis market in 2021: Approval of Adult-use sales in New Jersey will create a domino effect in the Northeast
    • We think approval of Adult-use sales in New Jersey will create a domino effect in the Northeast and result in over $1Billion of sales in NJ alone, during 2022.  We think approval by NJ voters will be a catalyst for coordination with New York, Connecticut and Pennsylvania creating an adult-use region with a population of nearly 45 million people.
    • Significant investments in real estate and related infrastructure – Similar to adult-use in Illinois, we will see increased demand for retail, cultivation and manufacturing properties in New Jersey and the surrounding states We could see over 5million square feet of real estate reallocated to the cannabis industry in the coming years.  NewLake is positioning to be a provider of choice for the real estate capital needs of the industry.
    • Success at the ballot box will be another strong catalyst for the cannabis industry –  Each state that legalizes cannabis for medicinal or adult-use, further solidifies the inevitability of federal legalization and positions the industry for sustainable long-term growth.  Over the next three years, we expect meaningful expansion of existing medical programs, new adult-use markets, and new states to legalize medical-use and adult-use cannabis sales.  By 2025, we expect legal sales in the US to exceed $35Billion.

The Valens Company 

A global leader in the end-to-end development and manufacturing of innovative, cannabinoid-based products. Valens (OTC: VLNCF) is focused on being the partner of choice for leading Canadian and international cannabis brands by providing best-in-class, proprietary services including extraction, analytical testing, formulation and product development and custom manufacturing. Valens is the largest third-party extraction company in Canada.

Spokesperson: Everett Knight, Executive Vice President, Corporate Development & Capital Markets


  • Cannabis 2.0 Products Will Dominate the Market in Canada with 3.0 Products Gaining Market Share: Similar to the US we will see 2.0 products take more market share and next generation products such as cannabis/CBD infused bath bombs, lip balms or CBD-infused honey will start to gain market share in 2021. We’ll also see an explosion of stores in Ontario and the beverage market in Quebec will gain massive steam compared to the rest of Canada because of the restrictions on other products.
  • The US Will See More Regulation: With many more legal markets in the States, the FDA will pass more regulations in 2021. The liability risks because of lack of regulations reminds regulators of the tobacco industry when it was unregulated in the past. Expect to see increased safety requirements and product recall processes instituted in the US market. US MSOs will have to transition to GMP and food safe regulations imposed on Canadian LPs.
  • International Market Expansion: A strong trend has emerged in the last couple of years across the world – medical legalization paves the way for adult-use – this will come through bigger and faster in 2021. Mexico and Israel are close to legalization. These markets will open up a landslide of opportunities for established companies in the US and Canada looking to capture global market share. Everyone has to remember the cannabis space is just getting started.

Fotmer Life Sciences is a global cannabis cultivator and extractor and one of the world’s largest Good Agricultural and Collection Practice (GACP) and Uruguayan GMP certified cannabis exporters. Fotmer is the first fully licensed company in Uruguay producing top medical-grade cannabis flower (also known as Flos), Pharmaceutical Ingredients (API), cannabis extracts and manufactured products for the international market.

Expert: Dr. Jordan Lewis

Thoughts: (Latin America)

  • 2021 will be the year companies pivot their focus to generating positive cash flow and exhibit a viable business model to investors. The market no longer rewards aggressive expansion but is now looking for material profitability. Companies who can articulate a near-term path to profitability will be able to witness an industry kick and have a higher probability of becoming highly profitable.
  • Watching the international markets develop at a rapid pace and to see cannabis normalized at an even greater pace than years prior.

o   Brazil appears have also become an attractive market as more companies are able to introduce their products and as local pharmaceutical companies develop and register more products.

o   Uruguay is gaining a new momentum as the government provides support to help develop and efficient industry, particularly in accelerating the export process. Uruguay’s latest milestones achieved by the industry have positioned the country as one of the largest exporters of dry flower in the world and a logistics hub.

o   Recently ranked as the most attractive country to invest, Uruguay is synonymous with trust, transparency and economic resilience and is positioned hand in hand with the most developed nations

Debra BorchardtSeptember 1, 2020


4Front Ventures Corp. (OTCQX:FFNTF) reported revenue of $12.7 million in the second quarter versus $2.5 million for the same time period as last year. However, sales at 4Front were flat quarter-over-quarter. The company said that it achieved positive operating cash flow in the month of August and expects a positive adjusted EBITDA starting in the third-quarter of 2020.

The loss from operations was $4.9 million. On the company earnings call Chief Investment Officer Andrew Thut said , “Our adjusted EBITDA in the second quarter was a loss of $400,000, as compared to a loss of $2.8 million in the first quarter and $5.8 million in the fourth quarter of last year.”

CEO Leo Gontmakher said, “Our strong business momentum leaving the second quarter will be aided by significant tailwinds as we enter the second half of this year.  We welcomed the first adult-use sales in Massachusetts at our Georgetown facility on August 12th and anticipate final approvals for adult use sales at our Worcester facility imminently.  Our cultivation/processing facility expansions in Massachusetts and Illinois as well as our second Illinois retail location are on-track for end of year completion.  We continue to execute on our plans to flip to cash flow positive during the third quarter and have set the stage to exit this year in a position to drive meaningful operating leverage in our business.”


The company established itself in Washington state and has since been expanding into other states. With regards to Washington, 4Front said it is seeing a phenomenal market turnaround from where the industry was a year and a half ago. “We had record months back to back in July and August, with the July being the first month we’ve had over $4 million in wholesale revenue. Flower prices are still trending up over the last 8 to 10 months, and we’re currently selling packages delivered flower for $900 a pound on average as compared to $650 a pounds just 12 months ago.” The company also noted that it has record sales for vapes and edibles across the board without having to lower prices in any of those categories.


The company said that its Georgetown, Massachusetts location began serving the adult-use market on August 14. Its first location to be approved in the state. 4Front said it is pleased with the steady progression of the sales ramps since launch, punctuated by a record weekend leaving the month of August. “We expect to be able to make an announcement about our Worcester location entering the adult use markets in the very near future as well, which provides a further tailwind to growth in the space.” The Worcester location for adult use and the third location in Brookline are expected to open in early 2021.


The company was offline in Illinois in June and July as the stores were closed for looting during the protests. The company noted that Joe Epperson, who formerly led the flower team in Washington, moved to Illinois and took over leadership of the grow facilities in January, and since that time, they’ve seen the yield in Elk Grove improved from 250 grams per square foot to right around 350 grams per square foot.

4Front said it is on track with the reopening of our South Chicago dispensary. The Calumet City dispensary is also on track to open in the fourth quarter of this year. “This together with our project that’s currently underway to expand our Illinois cultivation facility, tripling our production capacity is expected to strengthen our foothold in the state and pave the way for both top-line and bottom-line growth.”

Looking Ahead

The company said it is in progressive discussions to strengthen its balance sheet through a financing/sale leaseback of its affiliated facilities in Washington state. It also expects to finalize the divestiture activities of non-core assets with the closing of Maryland in early September.




Debra BorchardtJuly 10, 2020


Law 360 reported that the Massachusetts’ Cannabis Control Commission handed down hefty fines to three cannabis companies doing business in the state. 4Front Ventures Corp. (FFNTF) and Garden remedies were fined for using pesticides on plants, while Acreage Holdings Inc. (OTC:ACRGF) was fined for failing to disclose its relationship with two license holders.

4Front Ventures

4Front Ventures fined $350,000 settlement over pesticides used at its Georgetown, Massachusetts, facility. According to Law360, the settlement included a statement that 4Front Ventures admitted hydrogen peroxide, baking soda, and other pesticides were used at the facility, which is not approved for use on marijuana. The commission reportedly said that the company received test results that showed the plants contained a banned pesticide in June or July 2019 but didn’t alert the commission until August. Company CEO Leo Gontmakher said the company has made changes to ensure the violations do not happen again. “Patients were protected and no one was harmed,” Gontmakher said.

Garden Remedies

A $200,000 settlement was reached with cannabis company Garden Remedies over its Fitchburg, Massachusetts, facility. Like 4Front, Garden Remedies also noted in its settlement that it acknowledged using unapproved pesticides and altering its financial records to hide the purchase.

Company CEO Karen Munkacy said in a statement that the company has fired the employees involved in the falsified documents and ended its relationship with the vendor that provided the pesticides in question.

“While the product we used is permitted to be used in cannabis cultivation in many other states and is not an externally applied pesticide that puts anyone in danger, it is not permitted in Massachusetts and the situation was mishandled,” Munkacy said. “The company and I will continue to strive to ensure that ethical and regulatory violations never again occur.”

Acreage Holdings

Law360 also reported that The Botanist, an Acreage Holdings subsidiary agreed to pay a $250,000 fine for failing to disclose its parent company’s controlling relationship with two medical marijuana licensees. Massachusetts had passed a law when its program was established that limited license holders to just three so that there would be no monopolies and more companies would share in the industry.

Acreage Holdings came under fire for bragging that it had numerous licenses in the state. The commission’s investigation found that Acreage’s contracts with two affiliate medical marijuana treatment centers in the Bay State gave it a controlling relationship over them. Despite the ruling, the commission can approve two provisional retail licenses for The Botanist Inc.

“We want to express our thanks to the CCC for their professional approach as we worked through today’s resolution,” Acreage general counsel James Doherty said in a statement. “We’re looking forward to focusing all of our energies on what we do best, which is deliver great products to the citizens of Massachusetts.”

It seems the original agreements had been entered into while Massachusetts had a medical-only program and the regulations at the time were not so specific about control and ownership. The commission went on to clarify the rules about ownership limits at which time the commission said Acreage should have realized it had too many.

The commission did state that The Botanist “cooperated with the commission’s investigation into ownership and control interests and engaged in good-faith efforts to comply with the regulations after being notified of possible control issues.”


Debra BorchardtJune 15, 2020


Multi-state operator 4Front Ventures (OTC:FFNTF) reported its fourth-quarter and full-year fiscal 2019 results, plus the company gave preliminary first-quarter numbers. The fourth-quarter revenue increased 525% to $17.5 million over last year’s revenue for the same time period. 2019 revenue increased 786% to $31 million over 2018’s revenue of $3 million.

The company delivered a fourth-quarter net loss of $5.4 million and included a non-cash impairment charge of $146.3m related to the timing of the closing of the Cannex transaction. 4FRont delivered a 2019 net loss of $180 million. The company reported a net loss per share of $0.43 for the year versus a net loss of $0.03. The company did say that demand was robust despite the COVID-19 pandemic.

The company though isn’t out of the woods just yet. Its balance sheet had cash and equivalents of $11.5 million with total debt of $80.1 million.

“2019 was a transformative year for our company. With the acquisition of Cannex in July and its subsequent integration into 4Front during the second half of the year, 4Front became a leader in the mass-production of low-cost, high quality, branded cannabis products,” said Leo Gontmakher, CEO of 4Front. “Entering 2020, we have been laser-focused on leaning out and replicating our low-cost cultivation and production model in targeted states. The implementation of this model at our facilities in Georgetown and Worcester, Massachusetts, and in Elk Grove Village, Illinois, is expected to enable us to increase the production of cannabis products to meet the new adult-use demand expected in those two states.”

Looking Ahead

4Front gave preliminary first quarter 2020 results with total systemwide pro forma sales increasing 36% sequentially to $23.8m. The preliminary IFRS Sales for the first quarter of 2020 increased by 37% quarter-over-quarter to $17.6m. Gross profit, less the impact of adjustments for biological assets, for the first quarter were $9.7m. The adjusted EBITDA for the first quarter was a loss of $3.8m.

The company said it owns and controls highly attractive real estate in Washington state consisting of 176,000 square feet of state-of-the-art industrial space built for cultivation, production and distribution. The assets, however, are encumbered by senior secured debt associated with Gotham Green Partners. 4Front said a sale and leaseback of these assets would likely enable it to remove the senior secured debt from its capitalization table, creating the benefit of removing significant debt from the balance sheet while giving the company flexibility to more freely pursue non or minimally dilutive project financing options. The company is in active discussions with multiple partners on a transaction.

Mr Gontmakher added: “The work our team has done over the past six months to focus our business model, streamline our cost structure and fortify our balance sheet has set the stage for us to accelerate growth across our core markets of WashingtonIllinoisMassachusettsMichigan and California. Reducing debt, in particular the elimination of the senior secured convertible debt, will greatly improve our financial flexibility and will allow us to consider a wider range of financing funding options as we look to expand deeper into those core markets. 4Front has never been stronger than it is today, supported by a strengthened balance sheet, proven expertise, and streamlined operations.”


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