Acreage Holdings Archives - Green Market Report

William SumnerWilliam SumnerApril 18, 2019
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4min940

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

On The Site

Acreage Holdings

Acreage Holdings, Inc. (CSE: ACRG.U) (OTC: ACRGF) (FSE: 0ZV) announced that on April 17, its subsidiary, High Street Capital Partners agreed to acquire Nevada-based Deep Roots Medical in a deal valued at $120 million. The cash and stock transaction will mark Acreage’s entry into the Nevada market. This deal plants another flag in Acreage’s growing empire bringing the footprint up to 20 (including pending acquisitions) making it the largest company in the US cannabis industry.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) is acquiring Acreage Holdings, Inc. (CSE: ACGR.U) (OTC: ACRGF) in a deal valued at $3.4 billion. However, the deal will not be consummated until cannabis is federally legal in the U.S. and assuming the shareholders approve as well as the  Supreme Court of British Columbia.

Greenlane Holdings

The NASDAQ Markets Group (NDAQ) has been notoriously reluctant to list any cannabis related companies, even if they are only ancillary and not plant-touching. It seems vape distributor Greenlane Holdings Inc. has broken through the company’s barriers. Greenlane will begin trading on NASDAQ today with the ticker GNLN after upsizing its initial public offering of six million shares with the offering price of $17. The company had expected to price the shares between $14-$16.

In Other News

Aphria

Aphria Inc. (NYSE: APHA) announced the pricing of US$300 million aggregate principal amount of 5.25% convertible senior notes due in a private placement to qualified institutional buyers. Initial purchasers of the note will have the option to purchase an additional $50 million of notes. The sale of the notes to initial purchasers is expected to close on April 23, 2019. The company intends to use the proceeds of the offering for general corporate purposes, expansion initiatives, and future acquisitions.

Aurora Cannabis

Aurora Cannabis Inc. (NYSE: ACB) announced that the company’s contract with the German Federal Institute for Drugs and Medical Devices has been approved. Now that the contract has been approved, Aurora will start construction on an indoor cannabis production facility in Leuna, Germany in May of this year. The facility is expected to be completed within a year of breaking ground, and Aurora believes that the facility’s first harvest will be completed by October 2020. At minimum, the facility should produce approximately 4,000 kilograms of cannabis over a four-year period.


Debra BorchardtDebra BorchardtApril 18, 2019
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6min1780

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) is acquiring Acreage Holdings, Inc. (CSE: ACGR.U) (OTC: ACRGF) in a deal valued at $3.4 billion. However, the deal will not be consummated until cannabis is federally legal in the U.S. and assuming the shareholders approve as well as the  Supreme Court of British Columbia.

Once the shareholders and the Supreme Court approve, Acreage Holders will immediately receive a payment of US$300 million or approximately US$2.55 per Acreage Subordinate Voting Share. The company also said in a statement that holders of subordinate voting shares of Acreage will get 0.5818 of a common share of Canopy Growth stock for each Acreage Subordinate Voting Share held at the time of closing of the transaction.

“Today we announce a complex transaction with a simple objective. Our right to acquire Acreage secures our entrance strategy into the United States as soon as a federally-permissible pathway exists,” said Bruce Linton, Chairman, and co-CEO, Canopy Growth. “By combining Acreage’s management team, licenses and assets with Canopy Growth’s intellectual property and brands, there will be tremendous value creation for both companies’ shareholders.”

Complex is an understatement. These companies are based in different countries with varying levels of shareholder ownership and voting rights. Add in the inclusion of Constellation Brands (STZ) and it becomes more complicated. Plus, there is the issue of legalization in the U.S., which it seems both companies are confident will happen sooner rather than later. Shareholder approval is expected to occur in June.

Jonathan Sherman and Jamie Litchen, partners at Cassels Brock who acted on the Acreage transaction for Canopy Growth said, “Canopy Growth’s acquisition of Acreage Holders is the most complex M&A transaction completed in decades. In this deal, one company has conditionally acquired another to be able to operate outside of a jurisdiction whereby the product or service would be considered legal. Canopy Growth’s listing on the TSX and NYSE and involvement of its largest shareholder created a regulatory environment to structure a deal of this magnitude successfully.”

“From the first day we created our company, providing exceptional customer care and delivering shareholder value have been our top priorities. This transaction will help accomplish both,” said Acreage Holdings Chairman, CEO and President Kevin Murphy. “When the right is exercised having access to Canopy Growth’s deep resources will enable us to innovate, develop and distribute quality cannabis brands across the U.S. and continue expanding our U.S. footprint. At the same time, a confluence of factors are making it much more difficult for a multi-state operator to achieve its full potential, including the enormous amount of cash required to scale. Our Board of Directors, management team and I are pleased to deliver significantly increased liquidity to our shareholders and put ourselves in an even stronger position to deliver continued and significant upside.”

Acreage Leadership

Acreage President, George Allen will depart the company effective immediately and Acreage Chairman and CEO Kevin Murphy will assume the duties of President.

The Acreage board has approved of the deal, but there wasn’t any information as to whether the well-known directors like former Speaker John Boehner, former Canadian Prime Minister Brian Mulroney and former Massachusetts Governor and current Presidential candidate Bill Weld will be on the new board. Acreage Holders will hold approximately 12.1% ownership in Canopy Growth (on a pro forma basis) and up to 16.6% if permitted acquisitions are completed prior to the Trigger Event.

The companies said in the statement that they will also execute a licensing agreement granting Acreage access to Canopy Growth’s award-winning line-up of brands such as Tweed and Tokyo Smoke, along with other intellectual property. Once the Right is exercised, Acreage will become part of a leading global cannabis company with access to markets beyond the U.S. Until then, the two companies will continue to operate independently.

Matt Karnes, Founder and Managing Partner of GreenWave Advisors said, “This deal positions Canopy Growth as a leader in the U.S. market while providing Acreage with near term liquidity and other strategic opportunities. It is not surprising that, within expectations of a coming end of U.S. prohibition,  a Canadian LP/U.S. MSO combination would occur. We further believe that the timing and structure of this deal could facilitate similar moves by other Canadian entities as well as further consolidations among U.S. MSOs that could possibly then look towards Canadian acquisitions. We hope that a transaction of this magnitude will help increase pressure on Congress to more swiftly address changes in federal law as the US is increasingly taking a back seat to Canada and other nations in the burgeoning global cannabis market.”

 

LLC


Debra BorchardtDebra BorchardtApril 17, 2019
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4min2410

Acreage Holdings Inc. (ACRG.U) stock rose over 9% to close at $22.49 on rumors of an acquisition by Canopy Growth Inc. (CGC) on Wednesday. Both company CEO’s are scheduled to appear on CNBC on Thursday morning at 6:50 am adding fire to the whispers.

Acreage CEO Kevin Murphy and Canopy Growth CEO Bruce Linton are set to appear with Melissa Lee in the morning as the two companies are supposed to be finalizing the agreement this evening. It had been suggested that Canopy had been looking for a U.S. company and Acreage is one of the largest multi-state operators in the country. In addition to that, the two CEO’s have appeared together frequently at various events and are familiar with each other.

The biggest issue though could be the listing at the New York Stock Exchange. Canopy is listed at the NYSE, which has been steadfast about only listing Canadian cannabis companies and not U.S. based companies. The reasoning was that Canadian cannabis companies were not breaking the law since cannabis is fully legal in the country. However, in the U.S. cannabis is still federally illegal. This is not allowed as per the NYSE listing requirements. So, the question remains – how can Canopy maintain its listing at the NYSE if it acquires Acreage?

Acreage did not respond to a request for comment.

Acreage Holdings

The company holds licenses in 17 states of which 12 are in operation and Acreage has licenses to process in 12 states, seven are operations. The company has licenses to operate 68 retail dispensaries in 12 states, of which 21 are currently operational in 10 states. The Botanist is its retail concept designed to appeal to both adult use and medicinal consumers.

Acreage is licensed to open four stores in New York state home under the company name NYCANNA. The company is also planting its flag in Queens with its latest Botanist opening this past week on February 20. It is Acreage’s first dispensary in the New York City area.

Its operation in Florida is the result of its purchase of Nature’s Way Nursery of Miami, which it acquired for $67 million in January 2019. Acreage plans to open 18 retailers in 2019 in the state.  Its Michigan properties were the result of an agreement with Blue Tire Holdings reached in August 2018.

Other states include Ohio, North Dakota, New Jersey, Massachusetts, California, Connecticut, Iowa, Maine, Maryland, New Hampshire, Pennsylvania, Oregon and Oklahoma. There are pending acquisitions in Rhode Island and the Form Factory in Oregon that has operations in Washington and California.

 

 


StaffStaffApril 9, 2019
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9min500

Former Geisel School of Medicine at Dartmouth Clinician and Researcher Brings Expertise in Clinical Cannabinoid Therapeutics to Guide Multi-State Cannabis Operator

 

NEW YORK, April 09, 2019 /AxisWire/ Acreage Holdings (“Acreage”) (CSE: ACRG.U) (OTCQX: ACRGF), today announced the appointment of Corey Burchman, MD as Chief Medical Officer. Dr. Burchman will oversee development of an Acreage medical advisory board, assist in developing patient outreach programs, and serve as medical risk mitigator to the company’s product development and innovation. Additionally, Corey will cultivate important relationships with regulatory partners and patient advocacy groups, and drive medical education and engagement throughout the company. Dr. Burchman will report to Chief Operating Officer, Bob Daino.

“Corey is a nationally recognized expert on clinical cannabinoid therapeutics and has chaired multiple national and international conferences on the use of medical cannabis for therapeutic purposes. He is the perfect fit for this critical position and will play an instrumental role in helping Acreage deliver on our mission of bringing safe, affordable cannabis to anyone who needs it,” said Acreage Chairman and CEO, Kevin Murphy

Prior to joining Acreage, Dr. Burchman served as Assistant Professor of Anesthesiology and Pain Medicine at the Geisel School of Medicine at Dartmouth, in Lebanon, NH. At Dartmouth-Hitchcock Medical Center, he directed the Section on Neuroanesthesia, the Post Anesthesia Care Unit, and the Same Day Surgical Program. Additionally, he was an Attending Physician on the Acute Pain Service. Dr. Burchman also served as Medical Advisor to the Board at Prime Alternative Treatment Center of New Hampshire, a therapeutic cannabis dispensary.

Dr. Burchman is an author of a May 2017 study that found a significant reduction in use of opioids, antidepressants and alcohol for pain, anxiety and sleep among medical cannabis patients in New England. Published in the Journal of Psychopharmacology, it remains one of the largest studies of its kind.

On joining Acreage Dr. Burchman said, “In my role as Chief Medical Officer, I hope to bring my experience in clinical cannabinoid therapeutics as the basis for developing strong patient outreach programs, and building relationships with advocacy groups and partners. Working with Acreage allows me to further a theme that has anchored my entire career—patient safety—in an industry that has the capacity to change lives for the better across the country.”

Dr. Burchman received his medical degree from George Washington University School of Medicine and his residency and fellowship training at Harvard Medical School, the Massachusetts General Hospital and the Brigham and Women’s Hospital. He has been actively involved in teaching medical residents, medical research, and administering clinical care for over 33 years. He is a US Navy veteran of 13 years.

ABOUT ACREAGE HOLDINGS
Headquartered in New York City, Acreage is the largest vertically integrated, multi-state owner of cannabis licenses and assets in the U.S. with respect to the number of states with cannabis related licenses, according to publicly available information.  Acreage owns licenses or has management services agreements in place with license holders to operate in 19 states (including pending acquisitions) with a population of more than 172 million Americans, and an estimated 2022 total addressable market of approximately $14 billion in legal cannabis sales, according to Arcview Market Research.  Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience.  Acreage’s national retail store brand, The Botanist, debuted in 2018.

FORWARD LOOKING STATEMENTS
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information, including, for greater certainty, statements regarding expanding our industry-leading footprint, rolling out a national brand, pending legislation, opening of new cannabis markets and the commencement of Oklahoma operations in 2019. Generally, forward-looking information may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. There can be no assurance that such forward-looking information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such forward-looking information. This forward-looking information reflects Acreage’s current beliefs and is based on information currently available to Acreage and on assumptions Acreage believes are reasonable. These assumptions include, but are not limited to: market acceptance and approvals. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Acreage to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board or regulatory approvals; the actual results of future operations; competition; changes in legislation affecting Acreage; the timing and availability of external financing on acceptable terms; and lack of qualified, skilled labor or loss of key individuals. A description of additional assumptions used to develop such forward-looking information and a description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Acreage’s disclosure documents, such as Acreage’s listing statement filed on November 14, 2018, on the SEDAR website at www.sedar.com. Although Acreage has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Acreage as of the date of this news release and, accordingly, is subject to change after such date. However, Acreage expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.  The Canadian Securities Exchange nor its Regulation Service Provider has not reviewed and does not accept responsibility for the adequacy or accuracy of the content of this news release.

Investor Contact:

Steve West
Vice President, Investor Relations
Investors@acreageholdings.com
646-600-9181

Media Contacts:

Howard Schacter
Head of Communications
h.schacter@acreageholdings.com
646-600-9181

 

 


Debra BorchardtDebra BorchardtMarch 13, 2019
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4min8770

Acreage Holdings, Inc. (CSE: ACRG.U) (OTCQX: ACRGF) delivered fourth-quarter revenue of $10.5 million for an increase of 380% over the previous year’s $2.1 million. Acreage reported a whopping fourth-quarter net loss of $217.6 million. The pro forma revenue* for the fourth quarter was $22.9 million and the pro forma adjusted net loss*, which excludes certain non-cash charges and non-recurring items, for the fourth quarter was $10.8 million.

Fiscal 2018

The full year fiscal 2018 revenue of $21.1 million increased 173% over last year’s $7.7 million. The pro forma revenue*  was $77.2 million for the full year fiscal 2018. The full year fiscal 2018 net loss of $219.7 million was primarily driven by non-cash charges and non-recurring items. The pro forma adjusted net loss*, which excludes certain non-cash charges and non-recurring items was $30.3 million for the full year fiscal 2018.

Growth

The company has been on a tear with its expansion During the fourth quarter of 2018, Acreage opened two dispensaries under its The Botanist brand in Buffalo, NY and Worcester, MA, and acquired one dispensary in Thames Valley, CT, ending the year with 19 dispensaries (as of today, Acreage has 24 operational dispensaries).

Growth doesn’t come cheaply. During 2018,  Acreage spent over $200 million of capital in various strategic transactions and invested approximately $37 million to build out our operations. $46 million alone was spent in the fourth quarter of  2018. $22 million was invested in its subsidiaries and $15 million advanced to our managed entities to facilitate build-outs outs in the year.

 

Balance Sheet

According to the company’s presentation,  Acreage has $105 million in cash and cash equivalents and $149 million of highly liquid short-term investments on hand as of Q4’18, compared to $16M of cash as of Q4’17. The company raised $314M from pre-RTO private placement; completed RTO and listed on the Canadian Securities Exchange. Acreage President George Allen said at this time the company doesn’t anticipate raising more money.

Kanna Acquisition

Acreage also announced it was acquiring Kanna, Inc. which holds a license to operate a cannabis dispensary in Oakland, CA. as the company enters the California market. It’s an all-stock deal valued at $11.5 million that is expected to close in the second quarter of 2019. That’s a bargain when one considers that a nearby dispensary is doing $40 million a year.

Acreage said it will issue up to 460,000 Subordinate Voting Shares at a deemed value of $25 per share. Shares are currently trading in the mid-teens, but Allen pointed out that when the company did go public it was at $25 a share. “It’s a message to our shareholders, that we’re not willing to dilute ad nauseum shareholder value,” said Allen.

“I could not be more excited about our first dispensary operation in California, especially one in a limited competitive market. While this is our first, it is nowhere near our last, as we expect to significantly expand our dispensary footprint in the state over the coming months,” said Kevin Murphy, Founder, Chairman, and Chief Executive Officer of Acreage Holdings, Inc. According to the statement, Oakland allows just 16 adult use dispensaries to serve a population of more than 400,000.

The dispensary is located at 2019 MacArthur Blvd., in Oakland, but it will open in the second quarter of 2019, under Acreage’s dispensary brand The Botanist.

 

 


StaffStaffFebruary 19, 2019
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5min5450

Acreage Holdings Inc. (CSE: ACRG.U) (OTCQX: ACRGF) continues its push to add strength to its consumer team with the additions of Stacey Kawahata, as the Vice President of Consumer Insights and Brand Strategy, and Joen Choe, as Vice President of Marketing. Acreage has already established itself as a leader with its star-packed board of directors and continues to add key hires from top consumer brands.

“Our long-term success depends on our ability to create differentiated national brands and products that connect with consumers. The addition of Stacey and Joen is a testament to our commitment to driving the growth of our brands and the industry overall,” said Harris Damashek, Chief Marketing Officer of Acreage Holdings. “They both bring an amazing track record and experience in creating, developing and growing breakthrough brands by connecting with consumers in culturally relevant ways.”  Both executives will report directly to Chief Marketing Officer Harris Damashek and join a growing marketing organization with Acreage.

 

As VP of Consumer Insights and Brand Strategy, Kawahata will be responsible for bringing deep consumer understanding to the center of Acreage’s product, brand, and marketing executions.

Kawahata said, “In a few years, Acreage has established the largest company in the cannabis industry—what I see as the bedrock for creating a house of brands that will revolutionize how people think of cannabis and reach the many millions in the U.S. who need or want this plant to better their lives.”

Prior to joining Acreage, Kawahata worked at VICE Media for more than four years leading global brand, content and partnership strategy for VICE’s commercial and editorial arm. She was also a leader in VICE’s internal agency, VIRTUE, working with a number of brands including lululemon (LULU), Under Armour (UA), and Apple (AAPL). In this role, Kawahata also led strategy across several VICE partnerships with companies such as Samsung, Diageo, and ABI. In her role at Acreage, Kawahata will be responsible for crafting experiences and brands that resonate with the many different consumer segments across the cannabis industry, and creating marketing strategies, programs, and executions rooted in consumer needs.

 

As VP of Marketing, Joen will lead marketing strategy and brand management efforts across a growing portfolio of brands and retail concepts, including The Botanist, Acreage’s flagship retail brand.

On joining Acreage, Choe said, “As the leader in the industry with the largest national footprint, Acreage Holdings is uniquely positioned to create the first national brands in the industry and shape the development of the most significant new industry in the world. It’s a special challenge and privilege to build brands and experiences that will help craft one of the most significant moments in consumer behavior and culture.”

Prior to his position of VP of Marketing at Acreage, Choe drove brand and commercial marketing across a variety of industries, geographies, and sizes—from global icons like Nike (NKE), Luxottica, and Absolut Vodka to high-growth brands like vitaminwater (Coca-Cola), St-Germain (Bacardi), and Aviation Gin. In addition to his deep experience in brand and marketing leadership, Choe managed product and business operations and led media and communications in roles across multiple verticals. Choe also held a leadership role at a startup in mobile health and wellness, Tangram, with products sold at Apple, Best Buy, and Target before being acquired by Kakao Ventures.

 

 


Debra BorchardtDebra BorchardtFebruary 11, 2019
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3min5730

The National Cannabis Roundtable (NCR) was announced on Friday by the group’s new leader former speaker of the House John Boehner. The group will be lobbying to remove federal restrictions that stand in the way of medical research on cannabis and encourage the development solutions to help patients.

Other agenda items for the group include working to correct the tax code and improve the banking situation for cannabis companies. NCR will also be working to help states enact their own cannabis legislation.

Boehner has come a long way since his days as the Speaker. At one time he was very vocally anti-marijuana and opposed the very legislation he will now be fighting for. Since his time as Speaker, Boehner joined the board of one of the largest cannabis companies Acreage Holdings Inc. (ACRG.U) and has described his opinion towards cannabis as “evolved.”

“As the cannabis industry grows and matures, it’s vital that we work together for a common-sense legal framework for cannabis policy,” Speaker Boehner said in a statement. As membership grows, he says, NCR will be comprised of growers, processors, retailers, wellness centers, investors, entrepreneurs, and publicly traded companies. Acreage Holdings is a founding member of the group.

Edible company Plus Products is another company that has joined forces with the group. “As the Cannabis industry matures, leading companies have a responsibility to help keep the public safe and well informed,” said Jake Heimark, CEO of PLUS. “Our mission at PLUS is to make cannabis safe and approachable and we are excited to help further that mission by being an inaugural participant in the National Cannabis Roundtable.”

“As the top edible company in the largest state, we look forward to helping shape the national dialog around cannabis consumption and make sure the cannabis industry takes a responsible role in keeping consumers safe,” said Jennifer Tung, PLUS’ Chief Risk Officer.


StaffStaffJanuary 24, 2019
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7min2580

It’s time for your Daily Hit of cannabis news for January 24, 2019.

On The Site

Super Bowl Ad

On February 3, the 53rd Super Bowl in Atlanta Georgia will decide the league champion of football for the 2018 NFL season. If you are in attendance at the Super Bowl, you will see CBD coffee ads in the stadium, but if you are watching the game from home you will be not be exposed to any cannabis related advertising.

New York-based Acreage Holdings, Inc. (CSE: ACRG.U) wanted to run an advocacy ad during the game. The ad featured three medical marijuana patients saying how the product had helped them. It made no health claims for their own products and it didn’t promote the purchase of the company’s products.  Football fans at the stadium will, however, see advertisements for Baristas Coffee Company, Inc. (OTCPK: BCCI) White Coffee and the new Baristas EnrichaRoast CBD Coffee. The company said that the ads will run throughout the day in and around the stadium before, during, and after the game, and will include a special offer to send a message to Maroon 5.

In Other News

Caliva

Carol Bartz, former CEO of Yahoo and Autodesk and former Cisco Board Member, along with three time Super Bowl MVP and Pro-Football Hall of Famer Joe Montana both participated in Caliva’s initial round of funding. Ms. Bartz will serve on Caliva’s Board of Directors.

“We are laser-focused on our strategy to build the most trusted brand in cannabis. With our best selling product portfolio, our large scale vertical integration, and our award-winning distribution channels we are confident we can maintain our growth rates in California in 2019,” said Dennis O’Malley, CEO of Caliva.

Caliva has quickly become a market leader in cannabis consumer products in California, which represents more than 35 percent of the overall United States legal cannabis market. While California’s cannabis economy shrunk by 17 percent year over year due to expanding regulations, Caliva grew its revenues by 350 percent. The company now employs over 440 workers and has two current operating locations in the Bay Area.

Kona Gold

Kona Gold Solutions, Inc. (OTC Pink: KGKG), a hemp and CBD lifestyle brand focused on product development in the functional beverage sector, is pleased to announce they have acquired the newly formed distribution company, Gold Leaf Distribution, LLC. Gold Leaf Distribution, a Florida based company, has purchased its first beverage truck, which will be fully wrapped to advertise Kona Gold Hemp Energy Drinks, HighDrate CBD Energy Waters, and Storm CBD Waters. The Company is presently conducting interviews to hire a full-time beverage sales person/driver that will establish new distribution routes in the Melbourne-Orlando Florida markets.

Elev8 Brands, Inc.

Elev8 Brands, Inc. (OTCQB: VATE) has acquired Blessed Bean Coffee, LLC. Elev8 Brands, Inc. continues to execute on opportunities for potential growth. The Company is now able to control the means of production from start to finish. Elev8 Hemp, LLC, a wholly-owned subsidiary of the Company, has seen tremendous growth over the last twelve months and should continue to do so throughout 2019. The Company has acquired Blessed Bean Coffee, LLC for 3,541,228 restricted common shares of Elev8 Brands, Inc. With the growing demand for Elev8 Hemp Coffee, the Company plans to purchase a larger roaster and other miscellaneous equipment to increase productivity and continue increasing the volume.

Plus Products

Plus Products Inc. announced that the OTC Markets Group, Inc. has approved the trading of the Company’s shares on the OTCQB® Venture Market and will commence trading under the symbol “PLPRF” on January 23, 2019. The Company’s shares will continue to trade on the Canadian Securities Exchange under the symbol “PLUS”.

Additionally, PLUS has also applied for eligibility for book-entry delivery and depository services of the Depository Trust Company (“DTC”), to facilitate electronic settlement of transfers of its shares in the United States.  This electronic method of clearing securities speeds up the receipt of stock and cash and accelerates the settlement process for investors. DTC eligibility will help enhance the Company’s potential investor base and offer a more convenient trading experience for current and future shareholders while enhancing the liquidity of the Company’s shares on the OTCQB.

Vangst

Vangst, the leading human capital resource platform to the legal cannabis industry, announced today the closing of an over-subscribed $10 million Series A financing round.  This round increases the total capital raised to date by the Company to $12.5 million. The financing was led by Casa Verde Capital and included Lerer Hippeau, among others.

 

 


Debra BorchardtDebra BorchardtJanuary 24, 2019
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5min5810

On February 3, the 53rd Super Bowl in Atlanta Georgia will decide the league champion of football for the 2018 NFL season. If you are in attendance at the Super Bowl, you will see CBD coffee ads in the stadium, but if you are watching the game from home you will be not be exposed to any cannabis related advertising.

New York-based Acreage Holdings, Inc. (CSE: ACRG.U) wanted to run an advocacy ad during the game. The ad featured three medical marijuana patients saying how the product had helped them. It made no health claims for their own products and it didn’t promote the purchase of the company’s products.

CBS which is airing the game sent an email to the company saying, “CBS will not be accepting any ads for medical marijuana at this time.” The ad would have cost approximately $5 million.

Acreage currently has the largest footprint of any cannabis company in the country with operations/licenses in 19 states. “It’s a public service announcement really more than it is an advertisement,” said Harris Damashek, Acreage’s chief marketing officer.

Football fans at the stadium will, however, see advertisements for Baristas Coffee Company, Inc. (OTCPK: BCCI) White Coffee and the new Baristas EnrichaRoast CBD Coffee. The White Coffee can be purchased through Amazon (www.trywhitecoffee.com) and the company’s new EnrichaRoast CBD Coffee (www.baristas.tv) which uses a proprietary technology introducing CBD to the beans after they are roasted can be purchased on the company’s website. 

The company said that the ads will run throughout the day in and around the stadium before, during, and after the game, and will include a special offer to send a message to Maroon 5. The spots will be seen on numerous digital displays including mobile devices allowing fans to connect via special Portals.

Baristas said that the CBD ads are only available due to Canna Broadcast Medias’ (OTCPK: CBMJ) geofencing platform which will deliver ads in and around the stadium. Canna Broadcast Media specializes in getting mainstream media cleared promoting the cannabis sector including network TV, radio, and digital ads targeting those who wish to take advantage of the incredible investment opportunities that exist in the cannabis sector.

“Having Baristas White Coffee and our new EnrichaRoast CBD coffee ads at the Super Bowl will give us tremendous exposure,” said Barry Henthorn Barista CEO. “We are thankful to the NFL, ReelTime Media, and Canna Broadcast Media for making this possible. Baristas is growing its market awareness and expanding its product offerings.”

Marijuana Super Bowl History

This isn’t the first time cannabis tried to insert itself into Super Bowl week. In 2014, the Marijuana Policy Project put up a series of billboards highlighting the safety of marijuana and challenged the NFL’s punishment of pot smoking vs. the approval of alcohol. Smart Approaches to Marijuana, the anti-marijuana group went on the defense with their own billboards, which sparked a billboard battle.

 


Debra BorchardtDebra BorchardtJanuary 16, 2019
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15min24780

New York State Governor Andrew Cuomo announced his plan to legalize adult use cannabis in 100 days. The governor did not provide a lot of details but suggested it would continue to be a restrictive program.

Of course, New Jersey also said it would legalize adult use cannabis but then found it has taken much longer to make adjustments to the rules and regulations of a conservative medical cannabis program. Cuomo did note that consumers would need to be over the age of 21 and he was very supportive of towns cities having the ability to opt out of allowing cannabis businesses.

In December the Governor said, “The fact is we have had two criminal justice systems: one for the wealthy and the well-off, and one for everyone else. He also said that law enforcement “for too long targeted the African-American and minority communities.”

On May 15, 2018, New York City Comptroller Scott Stringer published a report estimating the potential size of the state’s legal cannabis market and how much tax revenue it would generate for both the city and the state. According to the report, the New York State cannabis market could see up to $3.1 billion in annual sales, with up to $1.1 billion being generated in New York City alone. In terms of tax revenue, legal cannabis could generate up to $436 million for New York state and $336 for New York City. Some lawmakers have even suggested this money could be used to fix the troubled subway system.

A new report from ArcView and BDS Analytics is estimating the New York cannabis market could reach $1.6 billion by the year 2022, a big jump from the expected $263 million in sales for 2018. This would be the fourth biggest market in the U.S. The biggest market is California, followed by Colorado and Florida respectively.

“Let’s legalize the adult use of recreational marijuana once and for all,” he added.

During the midterm elections, the New York State government shifted to Democratic control and it was expected that the new lawmakers would fully legalize cannabis. The efforts by Cuomo as expected to be approved in Albany. The tax revenue and jobs from fully legal cannabis would be a big boost to some of the needy areas in the state.

Just this week, Canopy Growth (NYSE: CGC) said it was going to spend $150 million to build its first production facility in the U.S. after getting a license to grow hemp by New York.

Canopy Growth Corp. will spend as much as $150 million to build its first production facility in the U.S. after the Canadian cannabis company was granted a hemp license by New York state. “I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality,” Canopy Chief Executive Officer Bruce Linton said in a statement.

The company said it was reviewing locations in the Southern Tier region of New York State and said it would announce the winner within 100 days.

Cuomo is under pressure to create jobs in depressed areas in upstate New York and cannabis jobs fit the bill. A study, published by Joblift, shows that cannabis growth in California is “steadily declining,” while New York State is experiencing strong growth. New York is now third in terms of gross domestic product and is experiencing a “surge in medical marijuana job postings,” with the study saying it could hold “the most potential for overall growth in the sector.” New York experienced two times more job postings (155 vs. 67) in the first half of 2018, compared to the prior year.

Next comes the question investors want to know. Who is poised to capitalize on the New York market? Cannabiz Media is a company that tracks license holders in states around the country.

Figure 1Provided by CannaBiz Media

 

 

Company Symbol
MedMen Enterprises CSE: MMEN
Vireo Health Private Company
Columbia Care Q1 2019 Est Public Date
Etain Health Private Co.
Acreage Holdings CSE: ACRG.U
Fiorello Pharmaceuticals Private Company
iAnthus CSE: IAN
Curaleaf CSE: CURA

 

MedMen Enterprises

According to their data, it looks like MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF) is poised to be the big winner as a result of its acquisition of PharmaCann, which had the highest number of permits awarded in the state. MedMen acquired PharmaCann for $682 million in an all stock deal back in October. It not only doubled the reach for MedMen, but expanded its presence in New York.

MedMen had acquired New York’s struggling Bloomfield Industries at the beginning of 2018. The company had been unable to pay vendors and was looking for new investors. Bloomfield was one of the original five licensees in New York.

“MedMen is proud of its record of providing high quality products and shopping experience to medical marijuana patients in the state of New York and customers around the U.S. We believe that as New York moves to become the 11th state in the union to legalize adult use, the wealth of experience and knowledge MedMen brings having operated in other highly regulated and complex markets is an asset to the state,” said spokesman Daniel Yi. “We also believe that in order for an adult use cannabis market to flourish and thrive in New York, there needs to be a clear path for participation in ownership and jobs for new entrants to the industry. There also needs to be access to resources and capital for such new operators in communities disproportionally impacted by the war on drugs, and more specifically the prohibition of marijuana. MedMen stands ready to work with the state and to be a proactive partner with others in the community to build a sustainable and inclusive cannabis program.”

Vireo Health

Vireo Health is next on the list. Vireo  is  a physician-led multi-state medical cannabis company, that says “It is committed to safely alleviating pain by providing patients with best-in-class cannabis products and compassionate care.” Unfortunately for investors, this company is still private. Although it did raise $17 million back in August and the company said that it was planning on going public at some point.

Vireo is still making headlines as formers executives were set to go to trial at some point this year for smuggling cannabis oil from Minnesota to New York. The company was trying to move inventory to meet a New York deadline and the move was exposed due to a whistleblower. Dr. Laura Bultman and Ronald Owens, the company’s former chief medical officer and chief security officer.  face felony charges of smuggling $500,000 worth of cannabis oil into New York. They face up to two years in jail and a $3,000 fine for violating Minnesota state medical marijuana laws.

Columbia Care

Next in line for number of permits is Columbia Care, which is expected to go public in the first quarter of 2019 following a merger with Canaccord Genuity Growth (CGGC), a special purpose vehicle.  In October it was announced that the two companies would combine. The companies agreed that CGGC would be valued at C$60.7 million and that Columbia Care would be valued at US$1.35 billion. The deal is expected to close in the first quarter of 2019.

Columbia was selected to be one of five licensees in Virginia and became the first U.S. company licensed in the European Union. It was recently awarded one of the six new licenses in New Jersey.

Etain Health

Etain Health is one of the original five licensees in New York and it too remains a private company. It is female-owned only recently began to expand beyond the state lines as it looks to California as another market for its products.

Acreage Holdings

Acreage Holdings, Inc. (CSE: ACRG.U) (OTC: ACRZF) also stands to benefit due to its ownership of New York Canna, now known as Terradiol New York. New York Canna was originally formed  in 2015. The initial shareholders of New York Canna, Inc. were intended to be New Amsterdam Distributors (NAD) and EPMMNY. However, NAD and EPMMNY were unable to reach an agreement as to EPMMNY’s contributions to the operating entity and the terms of investment. NAD says it was the sole shareholder of New York Canna when it began talking to Acreage among others.

EPMMNY doesn’t agree with this assessment and recently filed a lawsuit asking for $400 million. EPMMNY says in its lawsuit that it was “frozen out” in 2016 and its stake reduced initially to 12.5% as NYCANNA merged with defendant NY Medicinal Research & Caring, which included NYCI Holdings, Impire Holdings and Acreage Holdings as investors.

Fiorello Pharmaceuticals

Firorello Pharmaceuticals also known as FP Wellness is a New York State only licensee. It is privately owned. The company lists its partners as The Clinic, Plant Consulting Group and LIU Pharmacy on its website. A report in the Daily Gazette said that Fiorello is building a medical marijuana production facility in Glenville and plans to open other dispensaries in Monroe, Nassau and New York counties.

iAnthus

Valley Agriceuticals was supposed to be sold to iAnthus Capital Holdings Inc. (CSE: IAN) (OTC: ITHUF) in 2017  for $17.3 million, but that deal was never closed. iAnthus then acquired New York’s Citiva Medical for $18 million at the beginning of 2018. According to the original press release, Citiva NY’s license included a cultivation and processing facility and four dispensary locations to be located in Brooklyn, Staten Island, Dutchess County and Chemung County. Citiva’s proposed 2,000 square-foot flagship Brooklyn dispensary was slated to open in Q4 2018, and would be one of only two dispensaries located in New York City’s most populous borough, with 2.6 million residents.

The statement said that Citiva’s Staten Island dispensary, would be the only Registered Organization serving Staten Island’s 500,000 residents and it was also slated to open in Q4 2018. The Dutchess County and Chemung County dispensaries are planned for the second quarter of 2019.

Curaleaf

Finally, Palliatech, which changed its name to Curaleaf Holdings Inc. (CSE: CURA) (OTC: CURLF) is based in Boston MA. It has locations in seven New York counties. Its website says more counties are coming. Near Manhattan there is a dispensary in Forest Hills in Queens. In the company’s last earnings announcement, it said that it estimates it will post revenue of $400 million in 2019 including revenue generated by the non-profits, and free cash flow of $100 million. Curaleaf expects to complete two acquisitions in the fourth quarter of 2018 in Maryland and Massachusetts. At the end of 2018, Curaleaf also expects to have at least 40 operational stores.



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