Schwazze has agreed to acquire certain assets of Lightshade dispensaries located in Aurora and Denver's Washington Park neighborhood.
Schwazze has agreed to acquire certain assets of Lightshade dispensaries located in Aurora and Denver's Washington Park neighborhood.
Bevo will take over the shuttered Aurora Sky facility as part of the completed deal.
It’s time for your Daily Hit of cannabis financial news for January 8, 2019.
Cannabis packaging company KushCo Holdings, Inc. (OTCQB: KSHB) reported that revenue rose 186% in the fiscal first quarter of 2019 to $25.3 million. Revenue increased by 26.5% sequentially from $20 million in the fourth fiscal quarter of 2018.
The company said it had to weather several challenges. Cash dropped to $3 million as of November 30, 2018, versus $13.5 million as of August 31, 2018. KushCo said that rapid demand for product and timing of inventory purchases leading up to Chinese New Year resulted in a decreased cash position and overall working capital headwinds. Gross profits were equal to 12.8%, compared with 34.8% in the prior year period.
Cannabis data company Headset secured $12.1 million in funding in a Series A round of financing. The company, launched in 2015 by the trio that co-founded Leafly, was able to raise the capital from another equally top-notch group of cannabis investors that included Poseidon Asset Management and AFI Capital Partners and Canopy Rivers Inc. (TSXV: RIV).
Headset said that the money would be used to improve current products and services; expanding the company’s offerings to additional U.S. states and international markets, and support Headset’s partnerships and strategic alliances. It will also help the company serve new customers from the consumer packaged goods, beverage/alcohol, and financial industries, who are taking an increased interest in cannabis.
Aurora Cannabis Inc (NYSE: ACB) said it expects to report revenue between $50 million and $55 million for the fiscal second quarter ended Dec. 31. This figure is higher than the $11.7 million posted for the same period last year and the $29.7 million reported in the previous quarter. That should have been welcome news but analysts had expected $67 million and the stock tumbled.
CannTrust Holdings Inc. (TSX: TRST) applied to list its common shares on the New York Stock Exchange.
The Knesset, the legislative branch of Israel, overwhelmingly approved the medical cannabis export law in all three readings with final approval of 21-0. The next step is for Netanyahu and his cabinet to give the final approval of the bill. Last time a cannabis export law was sent to Netanyahu, it was vetoed but lawmakers are optimistic that it will pass this time
Isracann Biosciences Inc., an Israeli-based cannabis firm, announced today it has completed a letter of intent for up to $15 million in funding to break ground on outdoor greenhouses for cannabis cultivation as the company plans to become the world’s foremost cannabis producer specializing in low-cost, superior quality cannabis.
HARDCAR Distribution announced today that it has secured the ability to do $1 billion in escrow.
Univo, the public company controlling the full medical cannabis supply chain, signed a partnership with a cannabis farm in Israel that will enable Univo to deliver 3 tons of cannabis a year for at least 3 years. Over the course of three years, this deal will be worth around $12.5 million.HARDCAR Distribution announced today that it has secured the ability to do $1 billion in escrow. The company has been working diligently to support the cannabis industry over the past 3 years, searching for ways to help their clients in any way possible.
Canadian-based Aurora Cannabis Inc. (NYSE: ACB) said that its shares have been approved for listing on the New York Stock Exchange (NYSE: ICE), and will begin trading at the open of markets, October 23, 2018.
Aurora’s shares will trade on the NYSE using the ticker symbol “ACB”, which is the same symbol the company uses when it trades on the Toronto Stock Exchange. In a statement, the company said that the existing shares of Aurora, which previously traded on the OTCQX under the ticker symbol “ACBFF”, will now trade on the NYSE.
“Our NYSE listing represents another important milestone that reflects our commitment to all stakeholders as we continue advancing domestic and international growth initiatives, which includes expanding our base of global institutional and retail investors,” said Terry Booth, CEO of Aurora. “Aurora has rapidly developed into a globally mature organization with industry leading and technologically advanced production facilities available to produce at an unprecedented scale to meet the growing demand for high-quality cannabis both in Canada and abroad. We are also uniquely committed to leveraging our deep knowledge base to further scientific research into medical applications of cannabis, and developing novel, higher-margin product offerings that strongly differentiate Aurora from our competition.”
Aurora will voluntarily delist its shares from the OTCQX and shareholders will not be required to take any actions. The company did suggest that shareholders make sure that their brokerages make the change.
Aurora joins other Canadian cannabis companies that have been given the green light to list on the venerable stock trading institution. Canopy Growth (CGC) listed its stock earlier this year but wasn’t allowed to ring the Exchange’s opening bell – an honor normally bestowed on new members of the family.
Other companies like the REIT Innovative Industrial Properties (NYSE: IIPR), 22nd Century Group (NYSE: XXII) and India Globalization (NYSE: IGC), as well as a few others, have been trading on the NYSE. These companies didn’t actually grow cannabis or process it. In fact, 22nd Century is really a tobacco company and India Globalization has only talked about making cannabis products. IIPR is a real estate company that rents to cannabis companies.
Mr. Booth added: “I sincerely appreciate and wish to thank our entire global team for their remarkable execution, dedication, passion and hard work that went into making this significant achievement a reality for Aurora.”
A report from Bloomberg stated that beverage giant Coca-Cola (KO) was keeping its eyes on the CBD beverage market and it could be considering Aurora Cannabis (ACBFF) as its partner.
“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said in an emailed statement to Bloomberg News. “The space is evolving quickly. No decisions have been made at this time.”
Cannabidiol or CBD is the part of the cannabis plant that provides wellness benefits but does not give the consumer a psychoactive response. Green Market Report had heard for many months that Coca Cola was actually stockpiling CBD in a very hush hush operation, that could not be confirmed.
Constellation Brands (STZ) kicked off the cannabis beverage battle when it billions investing in Canopy Growth Corp. (CGC). The investment came under fire from Moody’s, who called it a speculative bet. Even some Constellation shareholders had complained the board had gone rogue.
The Constellation move was followed by a joint venture between Molson Coors and Hydropothecary Corp. to develop a cannabis drink. Lagunitas, owned by Heineken has already launched a THC beer called Hi-Fi Hops.
The focus has mostly been on THC-infused drinks as a replacement for alcoholic beverages. The idea is that consumers would prefer the drinking experience to continue, but instead of getting buzzed by alcohol, they would feel the effects of cannabis.
Coca Cola recognizes that the CBD drink market could be even bigger. It would be the equivalent of Vitamin water. Soda sales have declined as wellness drinks have taken over. Coca Cola has already made efforts to diversify its beverage portfolio like adding Odwalla drinks, Smart Water, Honest Tea, Fairlife milk and of course Vitamin Water.
Cannabis beverages already exist in legalized states, but they have been a very small part of the cannabis consumer market. Typically, sales only command about 1% of the market according to Headset data.
CBD drinks are also already on the market from companies like CBD Living Water. Still, there hasn’t been a mainstream producer willing to take the risk associated with a cannabis drink. If Coca-Cola does move forward with Aurora, it could spark a cannabis beverage battle.
Aurora Cannabis Inc. (ACBFF) announced that it has set Friday, August 24, 2018, as the record date for the distribution of Australis units. The distribution is in connection with the spin-out of its subsidiary Australis Capital Inc.
“There is massive demand for additional capital to fuel the growth of the U.S. cannabis industry, as well as intense interest among investors to gain access to the American market. We are very pleased to have created this opportunity for Aurora’s shareholders,” said Terry Booth, CEO of Aurora. “The unparalleled access to numerous compelling business opportunities in the U.S., positions Australis well to generate significant shareholder value.”
The distribution was previously announced on August 17. According to the statement, Canadian shareholders as Friday will be eligible to receive the distribution. Non-resident shareholders will be entitled to receive a cash payment net of any applicable withholding taxes following a sale of their respective units in the open market by an independent custodian following the distribution. Aurora expects that distribution and listing of Australis on the Canadian Securities Exchange should be completed by the end of September.
“We are well capitalized through our oversubscribed initial non-brokered private placement to execute on our investment strategy in the cannabis industry,” said Scott Dowty, CEO of Australis. “The undercapitalized and fragmented nature of the U.S. cannabis industry creates ample opportunities for Australis to leverage its access to capital and secure attractively valued assets. Our teams have already begun evaluating several opportunities, and we are looking forward to responsible and sound execution post completion of the Distribution. We look forward to informing our shareholders and the market in this regard.”
Australis Capital plans to identify and invest in U.S. cannabis and real estate assets. Investments may include and are not limited to equity positions and/or debt in both public and private companies, financings in exchange for royalties or other distribution streams, and the possible acquisition of certain entities. Australis’ stringent investment criteria for growth will maximize returns to shareholders while focusing on significant near and mid-term opportunities with a commitment to regulatory requirements, governance, community, and culture.
Terms Of The Distribution
The distribution will be paid on the basis of one unit for every 34 Aurora shares outstanding on the record date. Each unit will consist of one common share and one share purchase warrant of Australis. Each warrant will entitle the holder thereof to acquire one share at an exercise price of $0.25 per Australis share, on or prior to 4:00 p.m. (Eastern Time) on the date that is one year after the distribution.
The statement went on to say that in accordance with applicable securities laws, only Canadian beneficial shareholders can participate in the distribution. Canadian beneficial shareholders or their broker representatives are required to confirm Canadian residency by no later than September 14, 2018, otherwise, they will be deemed to be non-resident shareholders and will receive the net cash proceeds from the sale of their units. Canadian shareholders who hold their shares in Aurora through a brokerage or other account are therefore urged to contact their brokers to ensure that their brokers have confirmed Canadian residency in the manner to be provided by CDS following the record date.
Aurora Cannabis Inc. (ACBFF) today announced that it has entered into a letter of intent to acquire HotHouse Consulting Inc. Founded in 2004, HotHouse provides greenhouse consulting services and specializes in hybrid greenhouse growing techniques. Initially, the company focused primarily on agricultural clients, but in the ensuing years has shifted towards the cannabis industry.
Under the agreement, the company has granted 1,940,000 options to buy shares of Aurora to officers of HotHouse, which will vest annually over the next three years and are exercisable at $7.39 per common share. Aurora has also granted HotHouse officers a total of 345,000 restricted stock units of the company, which will also vest annually over the next three years. Once the acquisition is complete, HotHouse founder Laust Dam will join Aurora Larssen Projects (ALPS) as its VP of Horticultural Development.
ALPS is a subsidiary of Aurora that provides unique turn-key services to the company and its domestic and international partners; services include facility design, engineering, construction, support, maintenance, security, regulatory support, cultivation, genetics, and consulting and assistance in meeting requirements for GACP cultivation and EU GMP certification.
Aurora will use this acquisition to enhance ALPS services by providing ongoing customer support and consulting, which will be provided by HotHouse’s crop specialists, as well as ensure that ALPS designed facilities continue to run at optimal efficiency following client handover.
“Developing efficient and technologically advanced greenhouses allows Aurora to produce and harvest the highest quality cannabis at incredible scale while maintaining unmatched, ultra-low costs per gram, per square foot, per year,” said Thomas Larssen, President of Aurora Larssen Projects. “Through the addition of Laust and the entire team at HotHouse, ALPS gains significant insight and experience that we can apply to our industry-leading cultivation design, engineering, and consulting projects. With the significant exposure and strategic support gained through the backing of Aurora, ALPS has emerged as the cannabis industry’s preeminent hybrid greenhouse engineering and consulting partner.”
Several cannabis companies announced signing agreements with the Alberta Gaming, Liquor & Cannabis Commission (AGLC) to supply recreational cannabis to Alberta’s private cannabis retailers and the AGLC’s online cannabis store, www.albertacannabis.org.
Alberta is Canada’s fourth most populated province and is mostly known as being the home to tourist destinations like Banff Park and Lake Louise. Its capital is Edmonton and its largest city is Calgary. The province is known as being a hub for the country’s crude oil industry.
“The AGLC is committed to providing the Alberta market with access to federally regulated cannabis in a safe and fiscally-responsible manner while helping to shrink the illicit market,” says Niaz Nejad, Chief Operating Officer, and Vice President, Gaming & Cannabis, AGLC. “We are confident that those we are working with will help us fulfill our responsibilities to Albertans.”
Aurora Cannabis Inc.
Edmonton-based Aurora Cannabis Inc. (ACBFF) said that it will initially allocate up to 25,000 kg of product for the first 6 months of sales to this market. “The AGLC and Alberta government have been steadfast in their commitment to developing the best possible framework for a well-functioning legal adult consumer use market that prevents cannabis from ending up in the hands of youth,” said Terry Booth, CEO. “The province’s common-sense approach and this agreement are the result of many months of discussions with the AGLC towards achieving these goals. Consequently, adult consumers in Alberta will have access to a broad selection of high-quality cannabis products from October 17, 2018, onward.”
He went on to say, “Aurora already is the pre-eminent provider of medical cannabis in Alberta, with a dominant market share, serving more Alberta patients than any other licensed producer. Aurora also employs more Albertans than all other licensed producers combined. We have a brand recognized for quality, which we intend to leverage to capture a significant share of the adult consumer market in Alberta and Canada, both organically and through our strategic retail partnerships. We look forward to working with the AGLC and becoming a key part of the province’s cannabis infrastructure to ensure Alberta’s successful entry into the burgeoning consumer cannabis market.”
Aphria Inc. (APHQF) said that the AGLC placed an opening order of 870 kg to be supplied from across the full portfolio of Aphria’s adult-use brands and products, including dried flower, pre-rolls and cannabis oils. Once additional product categories, such as vapes and edibles, are authorized under the Cannabis Act, it is anticipated that they will also be made for sale throughout the province, further enhancing the company’s assortment of offerings in this market.
“We are thrilled to be working with such a strong partner that is equally committed to promoting responsible cannabis use,” said Jakob Ripshtein, Chief Commercial Officer at Aphria. “This important agreement enables Aphria’s adult-use brands to have a strong presence in Alberta’s dynamic retail landscape. Through our partnership with the AGLC, we look forward to providing access to our thoughtfully crafted portfolio of brands that were designed to meet the diverse needs of Alberta consumers.”
Organigram Holdings Inc.
Organigram Holdings Inc. (OGRMF) also announced that it signed a supply agreement with the AGLC adding to the other three provinces that company has made deals with. Organigram recently unveiled its preliminary branding strategy for the adult recreational market in Canada featuring the brands The Edison Cannabis Company, ANKR Organics and Trailer Park Buds.
“We are pleased to finalize this agreement with AGLC,” says Greg Engel, Organigram’s Chief Executive Officer. “We applaud the province’s efforts to secure a high-quality, dependable inventory for their recreational cannabis market and are proud to have been selected as an AGLC partner.”
Emblem Corp. (EMMBF) also signed an agreement to supply the province with high-quality cannabis products. Products will be available under Emblem’s new adult-use focused brand, which is expected to be announced shortly.
“Emblem is excited to have been selected to bring our adult-use products to Alberta’s recreational cannabis market upon legalization on October 17, 2018. We are looking forward to working together with the AGLC to build the foundation for a safe and responsible marketplace for consumers,” said Maria Guest, Chief Marketing Officer with Emblem. “With our soon to be announced adult-use cannabis brand, Emblem is ready to meet the needs of Albertans seeking a trusted source of cannabis products, offering a curated range of dried flower and cannabis oils.”
WeedMD (WDDMF) said it will supply the Alberta market with cannabis products starting the first day of legal sales. The agreement represents a key milestone in WeedMD’s strategic plan to develop a national distribution platform for the company’s medical and adult-use products, building upon the recent announcement of WeedMD’s supply agreement with Shoppers Drug Mart.
“We’re proud that the AGLC has selected WeedMD as a cannabis supplier to join its network as it looks to establish a cannabis framework for its adult-use markets,” said Keith Merker, Chief Financial Officer of WeedMD. “This represents a strategic partnership as we look to expand our product reach across the country to support Canada’s legal adult-use market. Alberta’s high standards align with the highly-regarded quality of our cultivation standards, product portfolio, and commercial practices as we look to meet the expected demand of this new market.”
The Supreme Cannabis Company, Inc.
The Supreme Cannabis Company, Inc. (SPRWF) said that its wholly-owned subsidiary, 7ACRES, had entered into a supply agreement with the AGLC to supply recreational cannabis upon legalization. Supreme said that the AGLC has communicated that they plan to evaluate product demand of the recreational market in order to inform their supply needs for the remainder of the year.
“We are very excited to serve as a trusted partner to the AGLC and Albertans. Alberta offers a unique opportunity for quality-driven brands as it is one of the most sophisticated private retail markets in the country and its approach to retailing cannabis recognizes that ensuring quality and offering a selection of products are critical steps towards impacting the illicit market,” said John Fowler, CEO of Supreme Cannabis. “Supreme Cannabis anticipates broad provincial acceptance that 7ACRES’ lineup is a premium brand, and as such will be ranked as a top-tier product in their stores.”
It’s time for your Daily Hit of cannabis financial news for July 3, 2018.
On The Site
Aurora Cannabis Inc.
Aurora Cannabis Inc. (ACBFF) gave several updates on different pieces of the company. The Aurora Vie production facility in Point-Claire Quebec got its sales license from Health Canada. The company said that this facility is on target to produce high-quality cannabis at a rate of 4,000 kg per year y October 2018 and that multiple harvests have been completed to date. Aurora has also modified the facility to produce softgel products. Its partner Capcium, is now installing equipment to commence high-volume production of these cannabis softgels.
Aurora also gave an update on the CanniMed company it acquired. The integration of the two companies is now complete. In addition, Aurora has received its Health Canada license for the production of encapsulated oil for its Mountain facility.
In Other News
RISE Life Science Corp.
RISE Life Science Corp. (CSE: RLSC) announced that it has closed a non-brokered private placement through the issuance of an aggregate of 4,824,399 units at a price of $0.30 per Unit for gross proceeds of $1,447,319.70. Each Warrant entitles the holder thereof to purchase one Common Share for a period of 24 months from the date of closing at a price of $0.45 per common share. The proceeds of the offering will be used for general working capital purposes.
MedMen Enterprises Inc.
MedMen Enterprises Inc. (MMEN.CN) (MMNFF), completed its first harvest at its cultivation and production facility outside Reno, Nevada. The test crop was only a fraction of the facility’s 10,000 pounds planned annual production capacity, but it went very smoothly and all systems functioned as designed, according to Dan McClure, MedMen’s vice president of agronomy.
Body and Mind Inc.
Body and Mind Inc. (BMMJ) announced approval of the final building inspection for the Phase II expansion from the Clark County Department of Building and Fire Prevention. The company initiated the Phase II expansion plans in early 2018 and is on time and budget to complete the increased production space, additional trim area, dry room and expanded packaging area.
CannaRoyalty Corp. (CNNRF) closed the previously announced acquisition of FloraCal Farms, a licensed premium craft cannabis producer located in Sonoma County, California. FloraCal has a temporary medium indoor cultivation license from the state of California, as well a Type 6 non-volatile manufacturing permit in Sonoma County. FloraCal is building its Sonoma County facility in three Phases and has been designed to comply with cGMP* standards.
FSD Pharma Inc.
FSD Pharma Inc. (CSE:HUGE) said that its first phase of the buildout of the FV Pharma facility in Cobourg, Ontario has been approved in an updated construction and development budget provided by Auxly. Of the current 620,000 square feet of building space available, 220,000 square feet will be developed and fully funded. As part of this project, Auxly will contribute $55,000,000 to buildout the Facility.
The markets will be closed on Wednesday for the Fourth of July and there will be no Daily Hit.
It’s time for your Daily Hit of financial cannabis news for June 26, 2018.
Microcaps And The M&A Scene
Merger and acquisition activity in the cannabis industry is lit this year. So far in 2018, Viridian Capital reports that there have been 106 public and 26 private M&A deals in the cannabis industry for a total of 132 deals for the week ending June 8. Compare this to only 73 deals for the same time period for 2017 – an increase of 80%.
Cultivation and retail accounted for the most deals made, while the investment sector came in second and infused products & extracts were the third most popular sectors for deals. The smaller companies are trying to compete with a market that is quickly leaving the small caps behind. Canopy Growth (CGC) is the leader in Canadian medical marijuana with a 15% market share according to a new report from Stifel. Aurora Cannabis (ACBFF) is acquiring MedReleaf and that is making them almost an equal player to Canopy. This means that two companies will own a third of the market for medical marijuana in Canada.
In a sign of confidence, Aurora Cannabis Inc. (ACBFF) has agreed to a new C$200 million debt facility, with a potential increase to C$250 million, with the Bank of Montreal. The debt will consist of a $150 million term loan and a $50 million revolving credit facility both of which will mature in 2021.
The debt will be primarily secured by Aurora’s production facilities, including Aurora Sky, Aurora Mountain, and Aurora Vie. Aurora Sky is projected to produce in excess of 100,000 kg per year of high-quality cannabis at low per gram costs and is scheduled to deliver its first harvest this week.
Green Spirit Industries Inc.
Green Spirit Industries Inc. (GSRX) said that it has been made aware of recent trading and promotional activity concerning GSRX common stock. The company has been informed that the higher than average trading volume in its stock may be the result of an unauthorized promotional activity. Green Spirit has been informed that emails promoting GSRX were sent out from unreliable sources utilizing a‘@gmx.com’ email domain. The company said it was not aware of this promotional activity.
CannTrust Holdings Inc.
CannTrust Holdings Inc. (TSX: TRST) held the official Grand Opening of its Niagara Perpetual Harvest Facility, the first such facility in Canada. The current annual output from the facility is estimated at 50,000 kilograms. In addition, the company has begun construction of an additional fully funded 600,000 sq. ft. expansion, that when completed, will double CannTrust’s annual capacity to in excess of 100,000 kilograms.
Bahamas Development Corporation
Bahamas Development Corporation (BDCI) subsidiary company Global Consortium, Inc. dba Cannabis Consortium Partners has reached a deal with the building owner to purchase the entire 64,000 sq. ft. building in Northern California for $9 million. The building owner has agreed to hold an interest only note for $4.5 million with a 60-day balloon payment once the current tenant is successfully removed from the space or their lease expires. Based on the amount of rental space available, the ROI for the building purchase is 15 months after rentals begin.
HARDCAR Distribution is excited to announce a newly minted partnership with Axiom Cyber Solutions to protect businesses in the cannabis industry from cyber attacks and the theft of valuable data. New businesses are coming online every day as the cannabis market explodes throughout the United States and Canada, making them prime targets for hackers.
Although HARDCAR Distribution brings years of security experience to the cannabis industry ensuring the safe and secure transport of cash and product, they understand the importance of protecting their clients on every level. With Axiom’s team of infrastructure specialists, developers, database and business intelligence experts, and project managers, growing cannabis businesses now have a full-service solution with the addition of cutting-edge cybersecurity technology.
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Unpack the industry with the daily cannabis newsletter for business leaders.