Acreage Holdings Archives - Green Market Report

Debra BorchardtDebra BorchardtJuly 10, 2020
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5min3580

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 BorchardtDebra BorchardtJune 26, 2020
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4min3941

Following the company’s heavily discounted deal with Canopy Growth and the departure of co-founder and CEO Kevin Murphy, Acreage Holdings, Inc. (OTCQX: ACRGF) reported first-quarter 2020 reported revenue of $24.2 million, an increase of 88% increase compared to the same period in 2019, and a 15% sequential increase. The earnings were unaudited.

The revenue that was reported paled in comparison to the company’s charges, which were almost double what Acreage had told investors they could expect.  Acreage reported a one-time, non-cash pre-tax charge of $196.0 million, or $164.7 million after taxes. The company had originally told the market it could expect to see a charge between $80-$100 million. Acreage blamed the discrepancy on current fair market value in certain states and the write-down
for its services agreement in Maine, which was not initially contemplated.

The net losses were equally eye-popping at $172 million. These results explain the departure of Murphy and his replacement by Bill Van Faasen.

“With the COVID-19 pandemic affecting millions across the U.S., the cannabis industry was faced with yet another significant challenge. Our dispensary and processing and cultivation associates quickly adapted to these changing dynamics ensuring our patients and customers in need were still served with dignity and respect, while maintaining a safe environment for everyone. Additionally, I am pleased with the reacceleration of our reported and pro forma revenue as our wholesale business continues to ramp and our dispensaries continue to mature,” said Bill Van Faasen, interim Chief Executive Officer of Acreage.

The company continues to report pro forma numbers, however, many past deals in which Acreage included those pro forma numbers have been terminated or sold. At this point, the company that once claimed to be the largest cannabis business in the country only has (assuming completion of pending acquisitions), 15 operational dispensaries. Acreage has or will have management or consulting services agreements, (including pending acquisitions), with entities operating 12 dispensaries.

Murphy’s Voting Shares

Not unlike the structure that was originally established at MedMen (OTC:MMNFF), Murphy, he exercises a significant majority of the voting power in respect
of the Acreage Shares. According to the company’s May MD&A, “The Subordinate Voting Shares are entitled to one vote per share, the Proportionate Voting Shares are entitled to 40 votes per share, and the Multiple Voting Shares are entitled to 3,000 votes per share. As a result, Mr. Murphy has the ability to control the outcome of all matters submitted to the Company’s shareholders for approval, including the election and removal of directors and any arrangement or sale of all or substantially all of the assets of the Company.”

“As a shareholder, even a controlling shareholder, Mr. Murphy will be entitled to vote his shares, and shares over which he has voting control, in his own interests, which may not always be in the interests of the Company’s shareholders generally. Because Mr. Murphy holds most of his economic interest in the Company’s business through High Street, rather than through the Company, he may have conflicting interests with holders of the Acreage Shares.”

The company is hosting a call to discuss the earnings on Friday morning. The stock closed higher by 23% on Thursday to end the day at $2.88.


Video StaffVideo StaffJune 26, 2020

6min5201

Happy Pride weekend everyone. Celebrate safely. 

Canopy Growth Corporation (NYSE: CGC) and Acreage Holdings, Inc. (OTCQX: ACRGF) stunned markets when the two companies agreed to an unusual deal in 2019. The agreement was that when cannabis was legalized in the U.S., Canopy would buy Acreage. It was called the “triggering event.” A lot has changed since then and now the deal has changed accordingly.  Acreage shareholders will now get an initial up-front payment of $37.5 million in connection with the modification of Canopy Growth’s rights. That’s a big drop from the original price tag of $3.4 billion.  In addition to that CEO Kevin Murphy is resigning from the company.

Aurora Cannabis Inc.  (NYSE: ACB) is the latest cannabis company to destroy the job argument as a reason for legalization. The Canadian cannabis company laid off 25% of Aurora’s SG&A staff, most of those to take place immediately and a roughly 30% reduction in production staff over the next two quarters. The cuts went to the highest levels including a restructuring of the executive leadership team and the recently announced retirement of President Steve Dobler. Aurora said it has initiated a plan to close operations at five facilities over the next two quarters in order to focus production and manufacturing at the Company’s larger scale and highly efficient sites.

Jushi Holdings Inc. (OTCQX: JUSHF) is planning on buying Vireo Health’s (OTC:VREOF) Pennsylvania Medical Solutions, LLC as the company looks to strengthen its position in the state’s market. Jushi will pay Vireo $16.3 million in cash, a $3.8 million seller note, and assume a $17 million facility associated with a long-term lease obligation. The $37 million deal is expected to close by the end of August 20.

GW Pharmaceuticals plc (Nasdaq: GWPH) said that the UK Home Office has reclassified Epidiolex, the company’s cannabidiol medicine as a Schedule 5 drug. A big relief to patients and pharmacists. 

TILT Holdings Inc. (OTCQB: TLLTF) reported Quarterly revenue of $42.4 million, up 27% Quarter over Quarter and 23% over Q1 2019. The company reported a positive net income of $50,925.  

Organigram Holdings Inc.  (NASDAQ: OGI) issued a very brief announcement stating that the company was facing a lawsuit and that it was changing its newly launched Trailer Park Buds brand. Organigram said it wouldn’t comment on the case, which was started in the Court of Queen’s Bench in Alberta. It is a class-action case that seeks damages from many cannabis companies including Organigram. 

A Cease Trade Orders have been issued by one or more securities commissions. 

Alternate Health Corp.  AHG  Ontario Securities Commission 
Champignon Brands Inc.  SHRM  British Columbia Securities Commission 
CIM International Group Inc.  CIM  Ontario Securities Commission 
iAnthus Capital Holdings Inc.  IAN  Ontario Securities Commission 
Ionic Brands Corp.  IONC  Ontario Securities Commission 
Sunniva Inc.  SNN  Ontario Securities Commission and British Columbia Securities Commission 

Debra BorchardtDebra BorchardtJune 25, 2020
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9min12250

Canopy Growth Corporation (NYSE: CGC) and Acreage Holdings, Inc. (OTCQX: ACRGF) stunned markets when the two companies agreed to an unusual deal in 2019. The agreement was that when cannabis was legalized in the U.S., Canopy would buy Acreage. It was called the “triggering event” and was originally valued at $3.4 billion. The price has dropped considerably.

A lot has changed since then and now the deal has changed accordingly.  Acreage shareholders will now get an initial up-front payment of $37.5 million in connection with the modification of Canopy Growth’s rights, including the extension of the term, and give Acreage shareholders the ability to participate in upside potential upon the Triggering Event.

In addition to that CEO Kevin Murphy is resigning from the company.

Deal Changes

These are the major changes to the deal as outlined by the companies:

  • Canopy Growth will pay Acreage shareholders and certain convertible security holders an aggregate of $37.5 million (approximately $0.30 per Existing Share on an as-converted basis), with the final amount to be received by each holder determined based on the number of Existing Shares into which all of the eligible securities are convertible at the close of business on the record date for the distribution.
  • Acreage shareholders’ new Fixed Shares, each of which represents 70% of an Existing Share, will be entitled to receive 0.3048 of a Canopy Growth Share, representing a premium of approximately 120% to the June 24, 2020 closing price of the Existing Shares on the Canadian Securities Exchange.
  • Acreage shareholders will be entitled to participate in the long-term value created by Acreage, and in the U.S. cannabis industry generally, as a result of the Floating Shares which Canopy Growth may acquire in the future upon the occurrence or waiver of the Triggering Event at a price based upon the 30-day volume-weighted average trading price of the Floating Shares on the CSE relative to the trading price of the Canopy Growth Shares on the NYSE at that time, subject to a minimum of $6.41 per Floating Share.
  • There will be a creation of two new classes of shares in the capital of Acreage with each existing Acreage subordinate voting share (an “Existing Share”) being converted into 0.7 of a Fixed Share and 0.3 of a Floating Share (with proportionate adjustments for the existing proportionate voting shares and existing multiple voting shares)

CEO Murphy Out

Mr. Murphy has resigned as CEO but will continue to act as Chairman of the board of directors of Acreage and contribute to the strategic direction of the company. He is listed as owning 10% of the company’s stock. Director Bill Van Faasen, former Chairman, CEO, and President of The Blue Cross Blue Shield of Massachusetts will serve as Acreage’s Interim Chief Executive Officer until a permanent replacement has been identified.

“On behalf of the entire Acreage Board, I sincerely thank Kevin for his passion and commitment to building a leading cannabis enterprise across the United States,” said Douglas Maine, Chair of the Acreage Special Committee. “Kevin is a visionary entrepreneur and positioned Acreage for success in the U.S. cannabis industry. As we move forward with a renewed commitment by Canopy Growth and build upon the vision for the U.S., we are optimistic about the long-term growth prospects for our shareholders.”

“I am excited about this New Agreement and the creation of a pre-eminent and truly global cannabis company upon the occurrence of the Triggering Event. I believe the eventual federal permissibility of cannabis in the United States is inevitable and this New Agreement continues to allow our shareholders to become a part of a leading cannabis company following such changes. Moreover, as the largest shareholder of Acreage, I believe this New Arrangement allows all Acreage shareholders to participate in potential upside to their investments through the fixed exchange component of Canopy Growth stock and importantly the new Floating Shares” said Kevin Murphy, Chair of the Acreage Board.

Canopy Loans Acreage $100 Million

In connection with the New Agreement, Canopy Growth has agreed to loan a wholly-owned subsidiary of Acreage (“Acreage Hempco”), up to $100 million pursuant to a secured debenture.  Canopy Growth will loan Acreage Hempco an initial $50 million on and subject to completion of the New Arrangement.  The remaining $50 million will be subject to the satisfaction of certain conditions by Acreage Hempco. The Debenture will bear interest at a rate of 6.1% per annum.

The United States is going to be a core market for Canopy Growth and this New Agreement solidifies our path forward with Acreage,” said David Klein, Chief Executive Officer of Canopy Growth. “I am excited to bring our relationship with Acreage back to center stage in our U.S. strategy and look forward to a time when the laws in the United States permit us to finalize this transaction as we march toward bringing our exciting beverage products to the US.”

Acreage Tumbled Quickly

Eyes were raised recently when Acreage announced that it agreed to a short term loan with an interest rate of 60%. Those terms rattled shareholders. That type of loan is akin to a payday loan and means the company must have really needed the money badly if it was willing to take those terms. The loan is secured by the company’s cannabis operations in Illinois, New Jersey, and Florida, as well as it’s U.S. intellectual property. If it can pay back the loan, In the event of default, the company is further obligated to pay to Lender an additional fee of $6 million.

Acreage was already selling assets and laying off employees after the company overextended itself in trying to become the largest cannabis company in the country. Acreage said it expects to record a pre-tax, non-cash charge of $80 to $100 million in the quarter ending March 31, 2020.

Canopy Growth’s Troubles

While Acreage has been struggling to right its ship, Canopy isn’t in much better shape. The company announced declining revenues and massive losses for the fourth quarter ending March 31, 2020. The net revenue in the quarter dropped by 13% sequentially to $107 million as the company blamed lower Canadian recreational revenue. Canopy Growth also delivered a staggering net loss of $1.3 billion in the quarter which was attributed to impairment and restructuring charges.


Debra BorchardtDebra BorchardtJune 18, 2020
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3min9430

Acreage Holdings, Inc.  (ACRGF) stock tumbled over 9% after the company said it entered into a short-term definitive funding agreement with an institutional investor for a total of $15 million in gross proceeds. The terms for the loan is what rattled shareholders. It’s a four month loan with a 60% interest rate.

That type of loan is akin to a payday loan and means the company must have really needed the money badly if it was willing to take those terms. The loan is secured by the company’s cannabis operations in Illinois, New Jersey, and Florida, as well as it’s U.S. intellectual property.

If it can pay back the loan, In the event of default, the company is further obligated to pay to Lender an additional fee of $6 million. Acreage may pre-pay the note without penalty or premium at any time following the 90th day following the closing. Acreage expects to use the proceeds for working capital and general corporate purposes.

This follows funding the company received earlier this month to receive up to $60 million. According to a company statement, the two funding agreements are as follows:

  • A Standby Equity Distribution Agreement with an institutional investor, under which the company may, at its discretion, periodically sell to Investor, and pursuant to which the Investor may, at its discretion, require the company to sell to it, up to $50 million of the Company’s Class A Subordinate Voting Shares, no par value.
  • Completion of a private placement offering, in which it issued $11 million in a principal amount under a secured convertible debenture, with gross proceeds to the Company of $10,000,000 before transaction fees.

The announcement comes on the heels of Acreage saying it expects to take an $80-$100 million charge  in the quarter ending March 31, 2020. In 2019, Acreage reported a net loss of $195 million, so it seems 2020 may be off to a rough start as well. Acreage is also late to file its first-quarter 2020 earnings report.


Debra BorchardtDebra BorchardtJune 1, 2020
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3min2310

Multi-state operator Acreage Holdings, Inc. (OTCQX: ACRGF) said it has entered into two definitive funding agreements to receive up to $60 million. According to a company statement, the two funding agreements are as follows:

  • A Standby Equity Distribution Agreement with an institutional investor, under which the company may, at its discretion, periodically sell to Investor, and pursuant to which the Investor may, at its discretion, require the company to sell to it, up to $50 million of the Company’s Class A Subordinate Voting Shares, no par value.
  • Completion of a private placement offering, in which it issued $11 million in a principal amount under a secured convertible debenture, with gross proceeds to the Company of $10,000,000 before transaction fees.

The announcement comes on the heels of Acreage saying it expects to take an $80-$100 million charge  in the quarter ending March 31, 2020. In 2019, Acreage reported a net loss of $195 million, so it seems 2020 may be off to a rough start as well. Acreage is also late to file its first-quarter 2020 earnings report.

The company is also in the midst of restructuring the company as it scales back on its plans to the largest cannabis company in the country.  Its first steps to scaling back properties include selling Acreage North Dakota, where it operated one medical marijuana dispensary and selling undeveloped real estate on the island of Nantucket in Massachusetts.

The company’s focus is now on key, profitable operations. Acreage believes this will lead to immediate margin improvements and accelerate its pathway to achieve positive pro-forma adjusted EBITDA for the full year 2020.

The company said in a statement that this shift is a direct response to significant changes in capital markets and in anticipation of continued historic pressure on consumer sentiment and regional and national economic uncertainties. “In addition to the sale of some non-core and other underperforming assets, Acreage intends to operate with a more optimized overhead cost structure and corporate team to adapt to an ever-changing cannabis landscape.”

The company has also laid off more than 200 employees as a result of its attempts to cut costs.


Debra BorchardtDebra BorchardtMay 18, 2020
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5min10950

Acreage Holdings Inc. (OTCQX:ACRGF) was once leading the pack of cannabis companies planting its flags in as many states as possible. That strategy has proven to be expensive and hasn’t paid off as quickly as many hoped. Now Acreage, like the others, is pulling back and taking a more targeted approach as it divests assets and takes a big charge.

Acreage said it expects to record a pre-tax, non-cash charge of $80 to $100 million in the quarter ending March 31, 2020. Its first steps to scaling back properties include selling Acreage North Dakota, where it operated one medical marijuana dispensary and selling undeveloped real estate on the island of Nantucket in Massachusetts. In 2019, Acreage reported a net loss of $195 million, so it seems 2020 may be off to a rough start as well.

“The impact of the COVID-19 pandemic on U.S. cannabis operators has been profound, at a time when the industry was already reeling from decreased access to capital, legislative uncertainty, and the illicit-market vaping crisis that struck our industry by association,” said Kevin Murphy, Chairman, and CEO of Acreage. “Led by a nimble operating team and Board of Directors that has proven its ability time and again to adapt and thrive in challenging times, we are supremely confident our plan will ensure operational profitability and excellence and position us to deliver improved shareholder returns in short order.”

The company’s focus is now on key, profitable operations. Acreage believes this will lead to immediate margin improvements and accelerate its pathway to achieve positive pro-forma adjusted EBITDA for the full year 2020.

The company said in a statement that this shift is a direct response to significant changes in capital markets and in anticipation of continued historic pressure on consumer sentiment and regional and national economic uncertainties. “In addition to the sale of some non-core and other underperforming assets, Acreage intends to operate with a more optimized overhead cost structure and corporate team to adapt to an ever-changing cannabis landscape.”

North Dakota’s Lack Of Patients

Medical marijuana has been legal in North Dakota since 2016, but activists had been moving towards a ballot measure for recreational use. The medical program took two years to implement and was fairly small in scope. The plan was a ballot initiative for 2022, but with COVID’s social distancing measures, getting signatures is proving difficult. Acreage has announced early in April it was closing the North Dakota dispensary, so the sale isn’t a surprise.

When the state opened up to medical marijuana cards last year only 122 patients signed up and the number was only expected to climb to 4,000. At the end of 2019, only 1,850 cards had been issued making this is a difficult state for a profitable venture.

Massachusetts Tourism Hit

Nantucket currently lists only one dispensary called Green Lady. COVID is sure to affect tourism to the island in the summer months as the economy struggles from unemployment and people remain cautious about traveling. The only way to reach the island is by ferry meaning tourists will have a hard time maintaining a six-foot distance from each other. Green Lady said it will be closed until May 19th after the Governor ordered all adult-use stores to close and only allowed medicinal dispensaries to remain open.

 


Kaitlin DomangueKaitlin DomangueFebruary 27, 2020
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5min5280

It’s time for your Daily Hit of cannabis financial news for February 27th, 2020. 

On the Site

Top Selling CBD Products on LeafLink

LeafLink broke down the data of their top-selling products at the request of Hemp Market Report, with the top-selling product being Mary’s Medicinals patch priced at $10. The rest of the list is as follows: 

Most purchased products containing CBD (by order volume)

  • 1:1 CBD:THC Patch, 100 mg – Mary’s Medicinals
  • 1:1 CBD/THC Sour Gummies, Strawberry Lemonade – Wana Brands
  • 10:1 CBD/THC CBD Therapy Assorted Pucks, 200 mg  – CannaPunch

Top categories for products containing CBD 

  • Edibles & Ingestibles 
  • Cartridges 
  • Topicals 

Top-selling brands with products containing CBD 

  • Terrapin Pennsylvania 
  • Wana Brands
  • Mary’s Medicinals

Social Club TV Gives Cannabis Content a Home

Green Market Report was able to talk with Josh Otten of Social Club TV. Social Club TV is a collaboration of RONIN Content Services (CEO Josh Otten) and Cookies (CEO Berner Milan Jr.) This is a cannabis network that will be available for streaming on Apple TV, Amazon Prime, Roku, and Pluto. The network features over 17 series and 300 episodes. 

Innovative Industrial Properties Generates $17 Million in Q4 

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

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

Vermont Takes Another Step Towards Legalization of Recreational Cannabis

On Wednesday, the Vermont House of Representatives voted in favor (90-54) of a bill that would legalize, regulate, and tax cannabis sales for adults 21 and older. 

According to the Marijuana Policy Project, S. 54 will now be scheduled for a final House vote, which is expected tomorrow. If it passes there, it will return to the Senate, which has already approved a different version of the bill in a 23-5 vote. The House and Senate will have to agree on a final version of the bill before it can proceed to Gov. Phil Scott’s desk.

In Other News

Acreage Holdings Stock Falls Due to Q4 Earnings 

Acreage reported a loss of $50.5 million over the 3-month period of Q4, with revenue coming in at $21.1 million. Despite revenue for the full year reaching $155 million, full-year net loss was US$150.3 million, leading to an 8% drop-off in Acreage stock.


Kaitlin DomangueKaitlin DomangueFebruary 26, 2020
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10min8770

It’s time for your Daily Hit of cannabis financial news for February 26th, 2020. 

On the Site

U.S. Hemp Could Benefit from the Coronavirus

As a major supplier of cut-rate hemp fiber and CBD for the world market, China has proven stiff competition for United States’ suppliers both domestically and internationally. The disruption of that supply chain by the coronavirus outbreak means that U.S. producers could finally gain an advantage in domestic and international markets.

MedMen Reports Revenue Of $44 Million, But A Net Loss Of $96 Million

MedMen Enterprises Inc.  (CSE: MMEN) (OTCQX: MMNFF) delivered its financial results for the second quarter of 2020 ending December 28, 2019. Revenue across MedMen’s operations in California, Nevada, New York, Illinois, and Florida increased to $44.1 million for the quarter, up 50% year-over-year and 11% sequentially. 

The net loss for the quarter was a staggering $96 million versus last year’s $64 million. The loss per share was ($0.09) versus last year’s ($0.23), so some improvement there.

Surviving Legalization 

Green Market report republished a story from Cannabis Law Report, diving into what has happened to the Emerald Triangle, and specifically Humboldt County, since legalization. The article is a response to the article “Cannabis Regulation: The Struggle of Small Farmers,” written by Lance Griffin. The responding article notes that legalization has been a disaster for Humboldt County, but not necessarily for their growers and shifts some of the blame of the financial crisis of Humboldt County since legalization to the Board of Supervisors and the Planning Commission, and pins the greatest responsibility of Humboldt County’s financial disaster on the “cadre of consultants, experts and advisors who took so much money for knowing only a little more than their clients.”

 

Acreage Holdings Reports 2019 Revenue Of $74 Million, Net Loss Of $195 Million

 

Acreage Holdings, Inc. (ACRG-U.CN) (ACRGF) delivered fourth-quarter revenue of $21.1 million and full-year 2019 revenue of $74.1 million, a 101% and 251% increase, respectively, compared to the same periods in 2018.

The net loss was a whopping $65 million versus last year’s $29 million for the same time period. The net loss for the full year was a staggering $195 million versus the fiscal year 2018’s loss of $32 million. 

 

Nevada Publishes List of Cannabis Test Failures

The Nevada Department of Taxation issued a Public Health and Safety Notice Advisory 2020-05 on February 21, 2020, advising consumers and patients to avoid consuming marijuana which was listed in the notice. The affected marijuana failed secondary microbial testing conducted by an independent testing laboratory. The cannabis was tested for yeast and mold, bile-tolerant gram-negative bacteria, coliforms, and Aspergillus. The products were sold at the following dispensaries: 

  • Rise (owned by GTI or Green Thumb Industries)
  • Essence
  • Thrive Cannabis Marketplace
  • MMJ America
  • Fine Cannabis Dispensary
  • Jardin Premium Cannabis Dispensary
  • Curaleaf
  • ShowGrow
  • Blum
  • Nevada Made Marijuana
  • Jenny’s Dispensary
  • Las Vegas ReLeaf
  • Sahara Wellness
  • Top-Notch Health Center
  • Deep Roots Harvest
  • Acres Cannabis
  • The Source
  • Thrive Cannabis Marketplace
  • Exhale
  • Silver Sage
  • The Grove
  • Oasis Cannabis and The Dispensary NV

Products were from various strains and the statement said that there was no reason to believe that the dispensaries or cultivators had any knowledge that the products exceeded allowable limits.

In Other News

3 Sixty Announces Interim CFO

3 Sixty, a Canadian company that works closely with the cannabis industry offering security solutions, has announced Candice Matthews as the interim CFO of the company alongside her current duties as the Director of Finance. 

“The Board and I have full confidence in Ms. Matthews’ ability to lead our finance operations in the short term, and we expect a seamless transition once the new CFO has been recruited in the near future,” said Thomas Gerstenecker, Founder and Chief Executive Officer.

Nutritional High Announces Non-Binding Letter of Intent with Calyx Brands, Inc. 

Nutritional High International Inc, a cannabis oils and edibles company has announced its non-binding letter of intent to sell a controlling interest in Calyx Brands, a cannabis distribution and logistics company based in California. Closing is expected in the second quarter of 2020. 

“Current challenges in the capital markets have been especially acute for distributors, who require working capital to grow their business,” commented Dakota Sullivan, CEO of Calyx. “We see this as an opportunity to combine our distribution reach with our new Partner’s supply chain and flower business to form a powerful, end-to-end brand.”

Harvest One Announces Sale of Non-Core Interest in Burb and Lillooet Property Totaling Proceeds of $2.3 Million

Harvest One Cannabis Inc. has announced its entry into a definitive agreement to sell its interest in Burb Cannabis Corp, a British Columbia based cannabis retailer, along with its interest in the Lillooet, British Columbia based 398-acre site, dubbed the “Lillooet Property.” Harvest One has agreed to sell its 19.9% equity stake in Burb back to the founders of Burb and has forgiven a shareholder loan with a face value of $250,000 in exchange for total cash consideration of $1,512,600. Per the Lillooet Transaction, Harvest One has entered into a contract to sell the Lillooet Property for cash consideration of $770,000. The transaction is scheduled to close on March 31, 2020.

AYR Strategies Q4 Revenue Increases to $32.3 Million 

Vertically-integrated cannabis company AYR Strategies reported a total revenue increase of 75% to $124.2 million compared to $70.9 million, and an Adjusted Gross Profit increased 78% to $63.0 million compared to $35.5 million. 

Enviva Reports Q4 Earnings 

Enviva has announced its Q4 earnings. For the fourth quarter of 2019, the company reported a net income of $0.9 million, adjusted net income of $17.2 million, and adjusted EBITDA of $53.3 million. 

For the full year of 2019, it reported a net loss of $2.9 million, an adjusted net income of $33.4 million, and adjusted EBITDA of $141.3 million. 


Debra BorchardtDebra BorchardtNovember 18, 2019
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4min10620

Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.U) (OTC: ACRGF) is buying New Jersey’s  Compassionate Care Foundation, Inc. which is a vertically integrated cannabis nonprofit corporation. The deal is subject to state approval and the amount of the deal was not disclosed. However, the state of New Jersey did state that Compassionate Care reported $4.9 million in revenue in 2018, badly trailing Curaleaf’s $19 million in revenue for 2018.

“I’m thrilled to finally welcome CCF into the Acreage family,” said Kevin Murphy, Chairman and Chief Executive Officer of Acreage.  “This reorganization will result in increased access to affordable medical cannabis for New Jersey’s existing patients in short order.  Moreover, we have long believed that upon adult-use legalization, the New England and Mid-Atlantic regions will be the preeminent cannabis market in the U.S. and Acreage is best positioned of any U.S. cannabis company to benefit.”

New Jersey Needs More Dispensaries

The Biennial Report issued in April 2019 from the state of New Jersey said, “The Department estimates that in 3 years New Jersey will need between 440,000 and 1,000,000 square feet of licensed cultivation capacity to meet
growing demand – or between 25 and 50 cultivation sites, depending on average size of site.” It went on to say, ” In New Jersey, there are 1.5 million people per open dispensary, whereas the aggregate average of population per dispensary in other states was roughly 100,000 people per dispensary. If New Jersey was at the average, the state would have 90 medical dispensaries to serve our population. Conclusion: The analysis strongly supports the need for additional dispensary sites in New Jersey.”

The report also noted that in both 2017 and 2018, Compassionate Care Foundation had the highest medical cannabis discounts, with discounts averaging between 16% and 17% per ounce.

CCF Assets

According to the company statement, Compassionate Care has licenses for cultivation, manufacturing & processing, and three retail dispensaries.

Cultivation: CCF operates one of New Jersey’s largest indoor growing facilities, primarily for high end flower, in Egg Harbor, NJ.  Acreage and CCF are planning to expand this facility to serve the existing demand for medical cannabis and in anticipation of adult-use legalization, and to build out a robust wholesale business.

Retail Dispensary Operations: CCF has the potential to operate three retail dispensaries, one of which is currently in operation in Egg Harbor.  An additional dispensary is under construction in Atlantic City as The Botanist, and an letter of intent has been signed for another The Botanist dispensary in Williamstown, NJ.

CCF Trails Competition

The Biennial report also stated that when looking at total inventory, neither Greenleaf Compassion Center nor Compassionate Care Foundation eclipsed 200 lbs of total product from June to December of 2018. “During the study period, Compassionate Care Foundation had a range of between 12 and 102 lbs of product onhand and an average of 41 lbs, while Greenleaf had a range between 5 and 12 lbs of product on hand and an average of 8 lbs on-hand.
Every other ATC in New Jersey had an average inventory of close to or over 500 lbs during same time period.”

 



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