Akerna Archives - Green Market Report

StaffOctober 3, 2022
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7min3840

The Daily Hit is a recap of cannabis business news for October 3, 2022.

ON THE SITE

SEC Charges Eight In Cannabis Stock Promotion Scheme

Elegance Brands, Emerald Health Pharmaceutical, and High Times are accused of a stock promotion scheme – The Securities and Exchange Commission announced on September 30 that it had charged eight in a stock promotion scheme that included Emerald Health Pharmaceuticals and High Times Holdings. The SEC says investors purchased $80 million of securities following the promotions. The individuals received payments based on the number of securities sold. Read more here.

Cannabis Banking Bill Passage After Election Season ‘Likely,” Analyst Says

The cannabis industry may not have to remain in regulatory limbo for much longer, but it may take some last-minute horse-trading between aisles, according to Cantor Fitzgerald analyst Pablo Zuanic. After a Sept. 26 trip to D.C. to meet with lawmakers, the Cantor analyst believes that Congressional leaders are poised to pass banking legislation for the cannabis industry in the lame-duck session. Read more here.

Michigan Wants Marijuana Moratorium

Michigan’s largest marijuana operations are plotting an offensive to stop competitors from entering the market in an attempt to buoy falling weed prices in the state. At the request of a lobbyist for some of the state’s largest recreational and medical cannabis growers, the Legislative Service Bureau has drawn up new legislation to prohibit the Michigan Cannabis Regulatory Agency from approving new grower licenses, according to draft legislation obtained by Crain’s. Read more here.

IN OTHER NEWS

Akerna Corp.

Akerna Corp. (Nasdaq: KERN), an enterprise software company and developer of comprehensive technology infrastructures, ecosystems, and compliance engines for the global cannabis industry, today announced that it has entered into a securities purchase agreement with certain institutional investors to purchase 400,000 shares of Series A convertible redeemable preferred stock and 100,000 shares of Series B convertible redeemable preferred stock. Each share of Series A and Series B preferred stock has a purchase price of $9.50, representing an original issue discount of 5% of the $10.00 stated value of each share. Read more here.

Akanda Corp.

International medical cannabis platform company Akanda Corp. (NASDAQ: AKAN) today announced that the company has received a written notification on September 27, 2022, from the Listing Qualifications Department of the Nasdaq Stock Market LLC, notifying the company that it is not in compliance with the minimum bid price requirement set forth under Nasdaq Listing Rule 5550(a)(2). It resulted from the fact that the closing bid price of the company’s common shares, no par value, was below $1.00 per share for a period of 30 consecutive business days. Read more here.

New Leaf Ventures Inc., High Profile Holdings Corp.

New Leaf Ventures Inc. (CSE: NLV) (OTC: NLVVD), announced that it has entered into a non-binding letter of intent to acquire High Profile Holdings Corp., a retail-focused private British Columbia cannabis company. Read more here.

Nabis, StateHouse Holdings

Nabis, a licensed cannabis wholesale platform, today announced an exclusive distribution partnership with California’s StateHouse Holdings. The agreement, which involves StateHouse winding down its distribution arm while pivoting its logistics to Nabis’ technology-centered platform, is an example of the industry’s latest consolidation trend, where self-distributed brands are outsourcing to simplify their business structures, increase efficiencies and prepare for scaling ahead. Read more here.

Heritage Cannabis Holdings Corp., Como Health LLC

Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF), is announced that it is commencing operations in the state of Missouri after Como Health LLC, doing business as 3Fifteen Primo Cannabis, recently received an approval to operate from the Missouri Section for Medical Marijuana Regulation. Initial production on vape products, concentrates, and pre-rolls has already commenced in the state. Read more here.

Silo Pharma, Inc.

Silo Pharma, Inc. (Nasdaq: SILO), a developmental stage biopharmaceutical company focused on merging traditional therapeutics with psychedelic research, today announced that it is working with Premier Consulting as its regulatory partner to assist with the preparation of a pre-investigational new drug (IND) package and meeting request with the United States Food and Drug Administration (FDA) for a novel topical formulation of ketamine, designated as SPC-26, for the treatment of fibromyalgia. Read more here.

Tryp Therapeutics, Inc.

Tryp Therapeutics, Inc. (CSE: TRYP) (OTCQB: TRYPF), a clinical-stage biotechnology company focused on developing psilocybin-based compounds for diseases with unmet medical needs, today announced that the World Intellectual Property Organization (WIPO) published their international patent application (PCT/IB2022/052347) covering the intravenous administration of psilocybin and psilocin. The PCT application, titled “Improved Methods For The Use of Psychedelics” expands and strengthens the IP related to the Company’s development of TRP-8803, an IV formulation of psilocin, which will be administered in conjunction with psychotherapy. Read more here.


StaffAugust 11, 2022
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9min150

The Daily Hit is a recap of cannabis business news for August 11, 2022.

ON THE SITE

Cannabis Consumption on Track to Beat Alcohol

As talks revolving around the federal legalization of cannabis splinter in Congress, the question of whether cannabis can eat beverage alcohol’s margins remains a growing one. In a report, titled, “Is Cannabis a Threat to Alcohol Sales?” BDSA Consumer Insights contends that while the crop is as popular as ever, any real breakthrough of consumer participation in adult-use and medical markets remains stymied in D.C. – casualties of political animosity and procedural acrobatics aimed at slowing progress. Read more here.

Akerna Misses on Revenue, Bookings Down

Akerna Corp. (Nasdaq: KERN) posted less than positive results as it missed expectations — showing that mixed demand and weaker sales are rippling through the sector. The cannabis tech firm released its second-quarter financial report card ending June 30, 2022. Read more here.

Aleafia Watches Revenues Rise in Canada, Looks Across the Pond

Aleafia Health Inc. (OTCQX: ALEAF) delivered positive results on Thursday as it continues to cut costs and find more profit in the Canadian legal market and overseas. The Canadian cannabis company reported its financial results for the three months ending June 30, 2021. Aleafia Health releases its financial report card on a 15-month fiscal year with five quarters versus a standard 12-month year with four quarters. Read more here.

Goodness Growth Beats on Revenue, Sees Sales in Emerging States

Goodness Growth Holdings, Inc. (CSE: GDNS) (OTCQX: GDNSF) posted positive results on Thursday — driven by new retail store sales and new regulatory changes in nascent state markets. The multi-state cannabis company reported financial results for its second quarter ended June 30, 2022. Read more here.

Why Psychedelic Cannabis is a Thing Now

The idea of a cannabis product creating a sort of psychedelic experience is not a new one. There was a prevailing, fictional description back in the early part of the last century—encouraged by the 1936 film “Reefer Madness”—where people feared that was what all cannabis did. It freaked you out. Caused you to do unspeakable things. Run amok. Destroy property. Read more here.

IN OTHER NEWS

Leafly Holdings, Inc.

Leafly Holdings, Inc. (NASDAQ: LFLY), an online cannabis discovery marketplace and resource for cannabis consumers, today announced financial results for its second quarter ended June 30, 2022. “Revenue in the quarter was $12.1 million, up 13.8% over Q2 last year, and up 5.5% over Q1 as we continue to build on the investments we’ve made in the first half of this year.” Read more here.

Clever Leaves Holdings Inc.

Clever Leaves Holdings Inc. (Nasdaq: CLVR, CLVRW), a multinational operator and licensed producer of pharmaceutical-grade cannabinoids, is reporting financial and operating results for the second quarter ended June 30, 2022. All financial information is provided in US dollars unless otherwise indicated. Read more here.

Forian Inc.

Forian Inc. (Nasdaq: FORA), a provider of technology, analytics and data science driven solutions for the healthcare and cannabis industries, today announced results for the quarter ended June 30, 2022. Read more here.

Schwazze

Schwazze, (OTCQX: SHWZ) (NEO: SHWZ), today announced financial results for the second quarter ended June 30, 2022. Revenues of $44.3 million increased 44% compared to $30.7 million in second quarter ended June 30, 2021. Read more here.

CEA Industries Inc.

CEA Industries Inc. (NASDAQ: CEAD, CEADW) a company in controlled environment agriculture (CEA) systems engineering and technologies, is reporting results for the three months ended June 30, 2022. Read more here.

Agra Ventures Ltd.

Agra Ventures Ltd. (CSE: AGRA) (Frankfurt: PU31) (OTCPK: AGFAF), a growth-oriented and diversified company focused on the international cannabis industry, announced that its Board of Directors has approved the Company’s issuance of 240,420 common shares at a deemed price of approximately $0.12 per Share as payment of the portion of the quarterly amount of interest due in Shares on a loan entered into in December of 2020. Read more here.

Ayr Wellness Inc.

Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a vertically integrated U.S. multi-state cannabis operator, announced that the Massachusetts Cannabis Control Commission (CCC) has granted a final license for adult-use cannabis at its Sira Naturals dispensary in Somerville. The company also received approval to open the first phase of its cultivation expansion in Milford, Massachusetts. The CCC voted to approve both measures during its meeting on August 11, 2022. Read more here.

Cookies

Cookies today announced its in Florida’s medical cannabis market with the opening of Cookies Miami, the brand’s 52nd dispensary, in a location convenient to the airport and downtown. The new 3,100 square-foot location will host a unique menu featuring Cookies’ highly sought-after genetics and custom Cookies SF local reserve merchandise. Read more here.

Christina Lake Cannabis Corp.

Christina Lake Cannabis Corp. (CSE: CLC) recapped its second quarter financial results for the six-month period ended May 31, 2022. All amounts are expressed in Canadian dollars unless otherwise noted. Read more here.

Allied Corp.

Allied Corp. (OTCQB: ALID), as a part of the previously announced export approval of 7100kgs of Colombia-grown cannabis, Allied has today shipped 1728kgs to Switzerland. This will be followed by 1500kgs weekly until the 7100kg threshold is met. Read more here.

Pyxus International, Inc.

Pyxus International, Inc. (OTC Pink: PYYX), a global value-added agricultural company, today announced results for its fiscal quarter ended June 30, 2022. Read more here.

Reunion Neuroscience Inc.

Reunion Neuroscience Inc., (formerly, Field Trip Health Ltd.) (TSX: FTRP, Nasdaq: FTRP) and Field Trip Health & Wellness Ltd. announced the closing of the plan of arrangement spinout transaction, including the corporate reorganization effected thereby, effective August 11, 2022. Pursuant to the arrangement, holders of common shares of the company exchanged their company shares for one new common share of the company and received 0.85983356 of a Field Trip H&W common share. Read more here.


Adam JacksonAugust 11, 2022
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Akerna Corp. (Nasdaq: KERN) posted less than positive results as it missed expectations — showing that mixed demand and weaker sales are rippling through the sector. The cannabis tech firm released its second-quarter financial report card ending June 30, 2022.

Akerna missed expectations with total revenues of approximately $6.1 million during the period, a 24% gain from $4.9 million for the same quarter last year — missing Yahoo Finance Average analyst estimate for revenues of $7.1 million.

“We have continued to take important steps to grow revenue, reduce costs, and position ourselves for growth in the future,” said CEO Jessica Billingsley. “While client demand has been mixed thus far in 2022, and with softer sales and bookings in particular during the second quarter throughout the sector, we believe we are on pace for a year of solid growth in 2022, compared with last year.”

Software revenue was $5.9 million, up 33% from $4.5 million in the same time last year — with $600,000 worth of software bookings this quarter.

The company saw a gross profit of $4.2 million, or 69.8% of total revenues — up 42% versus $3.0 million in the prior year.

The company also reported a second-quarter 2022 GAAP net loss of $29.6 million — including a $24.1 million impairment of certain long-lived assets — versus a net loss of $22 million sequentially and a loss of $6.1 million last year. However, the company noted that reductions announced in June are expected to generate material cost savings in the second half of 2022.

Diluted loss per share in the fourth quarter was $0.83 cents versus diluted earnings per share of $0.12 cents in the same period last year.

“On the cost side, we’re pleased with our gross margin improvement over last year at 69%, and the expense reduction program across the board that we announced in Q2 should enable more material improvements going forward, beginning with our Q3 results,” Billingsley said.

Despite taking cost-reduction steps, the company said average new business deals decreased by 9% year-over-year.

Adjusted EBITDA was a loss of $2.1 million in the second quarter — down 22% from a loss of $2.3 in the previous quarter — versus a loss of $1.6 in the same period last year.

The company said it had $14.1 million in cash and restricted cash as of July 5, 2022 — following the closing of a $10 million financing via S-1 filed/effective on June 29, 2022. It said it would continue to “pursue strategic alternatives to optimize the capital structure and strengthen the balance sheet.”


Joanne CachaperoJuly 7, 2022
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Canna-tech companies were busy over the long 4th of July weekend, analyzing sales data from their various platforms for what was expected to be one of the biggest weeks of the year for cannabis retailers. In Canada, the national holiday Canada Day is celebrated on July 1, with vendors hoping for a holiday spike in sales.

Last week canna-tech company Surfside predicted that the Thursday before the 4th of July, 2022, might be the busiest day of the summer in the U.S. Their analysis also indicated that Fridays in the summer have a magic of their own and consistently saw increased sales compared to other days of the week and Fridays during other times of the year.

Pregaming the 4th

According to data analyzed by canna-tech companies Akerna Corp. and Flowhub, the Friday before the 4th of July turned out to be the big day for retail sales in the U.S. 

Akerna (NASDAQ: KERN) said that according to their data, Friday, July 1,  became the second highest-grossing sales day for 2022, with USD $106.7 million in sales. Data from Akerna’s MJ Analytics platform indicated that compared to $89.6 million in sales on the same day in 2021, this year showed a 19.1 percent sales increase. Monday, July 4th, had lower sales, which was attributed to stores being closed for the holiday. 

Data from Flowhub’s platforms said sales on Friday, July 1, were up 15 percent compared to a regular Friday. The Saturday and Sunday before 4th of July saw a five percent increase each day, while the 4th of July saw a scant two percent increase. Flowhub added that 33 percent of sales on their platforms for the holiday weekend included a discount. 

Delivery and distribution company Lantern said sales were strong before and throughout the weekend, with customers purchasing “flower, then edibles, and then vapes, (with) more customers than usual who bought drinks and pre-rolls.”

SpringBig, a company that develops customer loyalty program technology for cannabis vendors, said their platform saw a slight increase in overall sales, with $16.9 million this year, compared to $16.8 million for the same weekend last year. “The sales and loyalty redemptions numbers are almost identical between last year and this year,” they said.

Canadian Declines

Data company Headset saw declines in sales this year, specifically on Canada Day and July 4th.  

In Canada, on July 1, Headset noted an average decline in sales of 23 percent across all provinces, with Ontario experiencing the biggest drop at 29 percent. Across product categories on Canada Day, there was a decline in sales for typically popular items including “vapor pens (-27%), flower (-25%), oil (-22%), and concentrates (-19%).” The company did not have comment on what may have triggered sales to trend lower or if sales prior to Canada Day were elevated.

In the U.S., July 4th saw a 6.6 percent drop in sales, compared to the four previous Mondays. Across product categories, Headset data indicated, “Not all products fared the same with Pre-Rolls  actually seeing an increase in sales of +6% on July 4th while Topicals and Capsules (traditionally consumed in a more health and wellness setting) saw declines of -17% and -28% respectively.”

Dab Day Outlook

With medical and adult-use cannabis vendors now looking forward to July 10 – aka 7/10 or cannabis concentrate event Dab Day – it remains to be seen if the little-known cannabis holiday will grow in popularity. With looming global recession, worsening inflation and market mayhem in effect, consumers may be looking for bargains or more conservative with spending, though July typically sees higher overall sales than other months of the year.

In comparison, Headset shared insights for Dab Day 2021 with Green Market Report after last year’s holiday. Their data indicated that U.S. sales increased slightly, while 7/10 sales in Canada remained flat:

  • Total Sales Growth: On Dab Day 2021 (7/10/21) total US cannabis sales slightly increased by 3.3% over an average of the previous four Saturdays. Canadian cannabis markets experienced more or less flat sales over the same time frame with a decrease in daily sales of -0.7%.
  • Category Sales Growth: US cannabis customers showed up for ‘Dab Day’ 2021. Concentrate sales increased by 67.4%, and was the category with by far the highest sales growth on that day.  Vapor pens, which we’ve seen also get a little lift from ‘Dab Day’ in the past, increased in sales by 7.1%.  Unlike the US, ‘Dab Day’ was not as successful in Canada; concentrate sales increased by only 5.5%. 
  • Concentrate Segment Growth: In the US on Dab Day 2021, Rosin products had the strongest growth, increasing in sales by 213% over the previous four Saturdays. HTE (+153.4%) was the next most successful segment. 
  • Dab Day Discounts: Dab Day was a fantastic day for American concentrate fans to stock up on products this year. In the US the average discount on concentrates grew by a whopping 60%, rising from 16.0% during the previous four weeks to 25.6% on 7/10/2021.

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

ON THE SITE

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

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

Akerna Shares Plunge on New Offering

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

Grown Rogue Reports Rising Revenue as Prices Fall

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

Curaleaf Pushes Back on Tip Jar

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

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

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

Psychedelic Microdosing is Trendy, but Studies are Lacking

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

IN OTHER NEWS

Canopy Growth Corporation

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

MariMed, Inc.

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

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

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

Ascend Wellness Holdings, Inc.

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

Auxly Cannabis Group Inc.

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

Canntab Therapeutics Limited

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

Pervasip Corp. 

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

MediPharm Labs Corp.

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

Humble & Fume Inc.

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

 


StaffJune 30, 2022
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Despite being in financial trouble, cannabis tech firm Akerna Corp. (Nasdaq: KERN) announced the pricing of an underwritten public offering of 29,382,861 units with common stock warrants. The units are being sold at a public offering price of $0.23 per unit and the pre-funded units are being sold at a public offering price of $0.2299 per pre-funded unit. The news sent shares tumbling almost 50% in early trading to lately sell at 14 cents per share. The offering should bring in roughly $6.7 million.

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

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

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

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

 

 

 


Debra BorchardtJune 3, 2022
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First Akerna (NASDAQ: KERN) and now Eaze seem to be laying off cannabis tech workers. Akerna had announced it was looking at strategic alternatives for the company as the CFO left. Then last week, it announced was cutting its workforce and operating costs to save money.

Akerna Cuts

CEO Jessica Billingsly said, “We can see a path to positive cash flows and profitability, and the board and the management team are committed to getting there on an accelerated timetable. While we continue to deal with liquidity concerns, our headcount reduction and additional cost savings measures represent a material annual cost savings. As part of this restructure, executive leadership team has also collectively agreed to a 25% reduction in salary to help support the company’s cost savings initiatives. As we noted on our last earnings call, bookings have been strong and our CARR is $21.1 million, and we are looking to continue to grow our top-line through a combination of enterprise wins as well as the opportunity we see in new market expansion from the SMB side of the business.”

The company said in a statement that it hopes to report $690,000 in total costs in its second quarter of 2022 to implement the reduction in force, including the following cost elements: $630,000 in severance and associated payroll taxes; $40,000 in legal costs; and $20,000 in employee insurance benefits. Of the total cost, $440,000 in salaries, payroll taxes, and benefits costs would have been reported in its second-quarter if the reduction in force had not been implemented.

EAZE Cuts

Business Insider reported that Eaze has made similar layoffs. The company wouldn’t confirm the layoffs to BI, but some of the people affected apparently said as many as 25 were let go on Wednesday this week. They were supposedly members of Eaze’s engineering team and live operations team, which handles its delivery service. Eaze has been working its way away from being just a delivery company towards becoming more of a dispensary brand. In 2021, Eaze bought the MSO Green Dragon which provides service to customers and patients in California, Colorado, Michigan, and Florida. Eaze said in a statement that the combined company would operate 42 delivery and storefront retail locations.

In 2020, Eaze raised $35 million in order to pivot to become a plant-touching operation. Crunchbase says that Eaze has raised $202 million to date, while BI reports that Pitchbook says the company raised an additional $60 million in September.

Even if these employees have been released into the job market, with a healthy tech environment, they are sure to land on their feet soon. Still, it seems as if companies are facing some reckoning and harsh bites of reality if revenues can’t match expenses.

Coco Brown, who was a high-ranking executive during the dotcom boom and bust and is currently CEO/Founder of Athena Alliance, a networking organization of the country’s foremost female executives said, “I am worried about today’s workforce, particularly in tech and particularly those who didn’t experience the dotcom boom/bust,” says Coco. “Just a few months ago we were hosting salons to explore all the incentives and perks employers needed to consider to compete in this very tight labor market. But now, so quickly, we are hearing about layoffs, or talks of layoffs, and slowed-down hiring.”


Debra BorchardtMay 17, 2022
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After several lackluster quarters, cannabis software company Akerna (Nasdaq: KERN) announced that it has hired JMP Securities to assist in evaluating strategic alternatives as the company and the board seeks to maximize stakeholder value. Akerna also reported that CFO John Fowle is leaving to pursue other interests, effective May 17. The Board has appointed Dean Ditto as Akerna’s interim CFO

“Our goal is to ensure we are taking every possible step to maximize value for our stakeholders,” said Jessica Billingsley, CEO and Board Chair of Akerna. “We are actively involved in strategic discussions and are happy to have JMP assist us in evaluating our opportunities, given their deep experience in the technology sector. We are confident in our ability to capitalize on the strength of our business, and we remain intensely committed to our clients, our team members and all other stakeholders.”

Fowle recently said on the company’s earnings call, “The ability of the company to continue as a going concern is dependent on our ability to secure other sources of financing, reduce debt, and attain profitable operation. Our corporate liquidity requirements primarily include payroll costs, corporate overhead expense, and debt service costs and our current sources of liquidity include cash on hand, as well as proceeds we anticipate from the access to our ATM programs. The board is addressing the working capital deficiency and considering all options available to the company in the best interest of our shareholders.”

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

Akerna President and COO Ray Thompson will become a Special Advisor to CEO. In this role, Ray will continue to oversee the legacy business, assist the CEO with special projects and advise on various aspects of corporate strategy.

“It’s been a privilege to serve as President & COO for Akerna, and I look forward to continuing to advise the organization on its business strategies in my new role as Special Advisor to the CEO,” said Ray Thompson.

Akerna’s Losses

Last week, Akerna reported that its software revenue was $6.5 million in the first quarter, up 71% year-over-year and total revenue was $7.0 million, up 73% year-over-year. However, the loss from operations was $20.6 million, up $17.1 million year-over-year and the net loss was $22.0 million, up $15.5 million year-over-year.

Akerna recently reported its 2021 earnings with total revenue of $20.7 million, up 49% year-over-year. The loss from operations though were $33.4 million, up $6.6 million year over year and the net loss was $33.6 million, up $6.7 million year-over-year.

Going Concern

In the company’s latest filing it noted, “Since our inception, we have incurred recurring operating losses, used cash from operations, and relied on capital raising transactions to continue ongoing operations. During the three months ended March 31, 2022, and March 31, 2021, we incurred a loss from operations of $20.6 million and $3.5 million, respectively, and used cash in operations of $3.6 million and $1.4 million, respectively. As of March 31, 2022, a working capital deficit of $15.1 million with $9.7 million in cash available to fund future operations. We will require additional financing in the second quarter of 2022 to meet our ongoing operational working capital requirements and continue to meet the financial covenants of the Senior Convertible Notes.”

 


StaffMay 9, 2022
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5min60

The Daily Hit is a recap of the top cannabis business stories for May 9, 2022.

On the Site

Curaleaf

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) reported its financial results for the first quarter ended March 31, 2022, with total revenue increasing by 20% to $313 million versus $260 million in the first quarter of 2021. Curaleaf said that the revenue growth primarily reflected continued organic growth driven by new retail store openings, the addition of new wholesale partner accounts, product launches, and the expansion of cultivation and production facilities. Revenue fell sequentially by 2% from the fourth quarter’s $320 million and missed the Yahoo Finance average analyst estimate for revenue of $319 million.

Curaleaf also reported a net loss of $20 million, which was higher than last year’s net loss of $15 million in the first quarter of 2021. The company said that the net result was primarily impacted by approximately $12 million of higher income tax expense and $2 million of higher other expenses, net, partially offset by an $8 million increase in operating income. The earnings were for a loss of three cents per share, which beat the estimates for a loss of four cents per share. Read more here.

FDA

Last week, the Food & Drug Administration (FDA) sent out warning letters to five cannabidiol (CBD) companies for Unapproved New Drugs/Misbranded/Cannabidiol (CBD) Products. The companies receiving the letters were  Kingdom Harvest, Delta 8 Hemp, ATLRx Inc., BioMD Plus and M Six Labs Inc. Read more here.

NY Chair Tremaine Wright

On April, 28, 2022, the Green Market Report hosted its first Women’s Summit in New York City. The Summit was especially grateful that the Chair of the New York Cannabis Control Board, Tremain Wright was able to speak to the audience. Thank you for watching the Green Market Report! Be sure to subscribe to our channel and our newsletters. Video available here.

In Other News

Akerna

Akerna (Nasdaq: KERN) reported its unaudited financial results for the quarter ended March 31, 2022. Total revenue was $7.0 million, up 73% year-over-year. The net loss was $22.0 million, up $15.5 million year-over-year. Loss from operations was $20.6 million, up $17.1 million year-over-year. Transaction volume up 16% year-over-year. Average new business deal size up 40% year-over-year. Retail order spend up 6% year-over-year. Read more here.

XS Financial

XS Financial Inc. (CSE:XSF)(OTCQB:XSHLF), a specialty finance company providing CAPEX and equipment financing solutions to cannabis companies in the United States, announced today that it has upsized its lease facility with Ayr Wellness (CSE: AYR.A)(OTCQX: AYRWF) up to $37.4 Million including an immediate drawdown of $12 Million, bringing the total usage to over $33.1 million. All amounts are in U.S. dollars. Read more here.


StaffApril 13, 2022
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5min200

Cannabis tech company Akerna (Nasdaq: KERN) is predicting that U.S. cannabis shoppers will spend nearly $130 million on legal cannabis on April 20th, known as “420”, an unofficial but widely celebrated cannabis consumption holiday, which would become the largest sales day in legal cannabis history.

“We are approaching the biggest day for our industry, making it critical for dispensaries to plan promotions, staff, and space for these large upticks in traffic,” said James Ahrendt, Business Intelligence Architect at Akerna. “To help alleviate some of the traffic, cannabis retailers using Akerna’s MJ Retail POS solution can leverage the platform’s kiosk mode. In kiosk mode, the budtender gives the MJ Retail tablet to the customer, who can then shop the store’s offerings on the device, similar to how they would in an online order, allowing stores to serve more customers and ultimately complete more sales per hour.”

Compared to last year’s 420, which brought in nearly $112 million and became the industry’s largest sales day to date, this year’s 420 would be a 16% growth over last year’s sales. As more markets legalize cannabis and more Americans become comfortable with the legal cannabis industry, these year-over-year increases are expected to continue.

Mid-week 420

This year could be tricky because the holiday falls in the middle of the week on Wednesday. So, do people celebrate before or after? Or just take the day off?

Akerna says to expect traffic to begin growing on April 15th, the Friday ahead of 420. Since tax day was moved to April 18th, that could work.  Akerna thinks the overall Friday to Wednesday period is expected to see cannabis sales figures above the $400 million range.

To put that into perspective, the Iowa Alcoholic Beverages Division recently reported the state’s largest year of liquor sales ever – which surpassed $400 million for the first time. This means that the U.S. cannabis retail industry is predicted to bring in more sales in just six days than Iowa did for liquor sales in a record-breaking year.

While there is no federal tax due to the lack of legalization, if you were to compare that $400 million in sales to Colorado’s taxes, one of the first legal adult-use markets and where Akerna is headquartered, the sales taxes resulting from consumer spending in those six days would be nearly $90 million.

 


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