C21 Archives - Green Market Report

Debra BorchardtDebra BorchardtDecember 30, 2019


C21 Investments Inc. (CSE: CXXI)(OTCQB: CXXIF) delivered unaudited financial results for the third quarter of fiscal 2020 ending October 31, 2019 with revenue of $10.58 million, a sequential increase of 7.5% over the second quarter and a big jump over last year’s $305,011 for the same time period. The net loss for C21 was $5.1 million for the third quarter.

“We delivered impressive third-quarter results reflective of the significant progress we made toward our strategic objectives. We rationalized our operations, achieved improved efficiencies, and have sharpened our focus on leveraging the strong brand awareness of our product portfolio. The positive changes we are making better position C21 for success over the long-term,” said Sonny Newman, President, and CEO, C21 Investments.

The company has seen success in its Nevada operations, while Oregon has had to restructure. Oregon reported a net loss of $6.5 million, while Nevada delivered a net profit of $5.6 million.


The company reported 172,694 customer transactions in the third quarter at Silver State Relief dispensaries, an 8% increase over Q2, and a 24% increase from Q1. Year-to-date customer transactions now exceed 580,000. C21’s Q3 market share now represents 5% of the total State of Nevada cannabis sales.

C21 said that it continues to leverage the vertical integration of its businesses by bringing our strong Oregon brands online in Nevada, which now include Phantom Farms CBD line of products, pre-rolls, with Phantom flower awaiting state approval of packaging.


C21 Investments undertook an appraisal of the Oregon leaseholds and real estate assets, which resulted in a write-down of $4.2 million in the quarter. This one-time charge reduced the quarter’s earnings per share by 5 cents to ($0.06).

“Strategically we set a course to become an efficient and profitable business with strong fundamentals. This has resulted in significant growth in adjusted EBITDA and operating cash flow results for the quarter, positioning the company to become profitable in the near term,” said Michael Kidd, Chief Financial Officer, C21 Investments.


The company noted it is involved in two different lawsuits.

A complaint was filed in the Oregon State Circuit Court for Clackamas County, on April 29, 2019, by two
current owners of Proudest Monkey Holdings, LLC (the former sole member of EFF), alleging
contract, employment, and statutory claims with an amount in controversy of $1,837,500 against the
Company, its wholly-owned subsidiaries 320204 US Holdings Corp, EFF, Swell Companies Limited, and
Phantom Brands LLC, in addition to three directors, two officers, and one former employee. The Company
and the other defendants wholly deny the allegations and claims made in the lawsuit and is defending and may
counterclaim through the lawsuit. As a procedural update, the Company has filed an Oregon Rule of Civil
Procedure (ORCP) 21 motion to dismiss all of the Plaintiffs’ claims against it, its wholly-owned subsidiaries,
and other defendants; the Rule 21 motions are pending before the court. Further, the Company’s recent
internal investigation, findings and self-reporting of actions and alleged malfeasance by the Plaintiffs at the
EFF facility (discussed more fully below under Oregon Compliance) should serve to bolster the Company’s
defense and potential counterclaims in the litigation. Given that this legal proceeding is in a premature stage
and the Company wholly denies the claims, no provision was recorded

On or about May 30, 2019, Wallace Hill filed a civil claim in the Supreme Court of British Columbia alleging
breach of contract and entitlement to 1,800,000 common shares of the Company, fully vested by March 1,
2019, and damages due to the lost opportunity to sell those shares after such date for a profit. On June 23,
2019, the Company circulated a letter to Wallace Hill terminating the agreement and accepting Wallace Hill’s
repudiation of the agreement based on Wallace Hill’s previously published defamatory comments and
termination of the agreement. Also, on June 23, 2019, the Company filed its response to the civil claim
denying all claims and filed counterclaims alleging breach of contract, a declaratory judgment of termination
of the agreement, defamation and an injunction from further defamatory comments. The civil action is
pending, and it is too early to predict its resolution.

StaffStaffJune 11, 2019


C21 Investments Inc. (CSE: CXXI) (OTC: CXXIF) announced unaudited revenue of $3.2 million for the month ended May 31, 2019. Unaudited Gross margin (before fair value adjustments) is estimated to be 50%. This amount reflects revenue from the Company’s operations in Nevada and Oregon. These figures include revenue from Swell Companies, starting from the closing date of the acquisition of May 24, 2019.

According to the company statement, the company delivered $7.7m in first quarter reported sales, Q1 had 89 days which is an average of $86,500 per day.  The company’s May sales increased averaging $103,000 per day. During the month, C21 Investment’s retail dispensaries completed a record 53,120 customer transactions compared to 38,076 for May 2018, prior to their acquisition by C21.

“Our operations continue to provide strong growth and C21 Investments is reaping the rewards of our vertically integrated strategy,” said Robert Cheney, President, and CEO of the Company.  “We look forward to continuing to increase shareholder value as our operations expand and grow.”

The C21 Investments group of companies has 140,000 sq. ft. of cultivation space (both indoor and outdoor) with another 165,000 sq. ft. available for cultivation, extraction or wholesale distribution; 11,000 sq. ft. of wholesale distribution; 13,000 sq. ft. of extraction; and 17,000 sq. ft of retail distribution.

Nevada Launch of Oregon brand – Hood Oil

The company is leveraging its strong Silver State retail platform to launch its “Hood Oil” vape line in Nevada. Founded in 2015 under Swell Companies, Hood Oil offers branded extract products at an affordable price and the initial product launch includes vaporizer cartridges and batteries.  During the first four days of this launch, Hood Oil vapes generated approximately 13.5% of Silver State’s total unaudited gross sales.

“Hood Oil is one of the most prominent brands on retail shelves in Oregon, providing competitive quality, price, and consistency in the value segment,” said Sky Pinnick, Chief Marketing Officer for the Company. “With the same strategy of providing maximum value at a competitive price, Hood Oil vapes address the increased demand for oil-based cannabis products in Nevada.”

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