Cannara Biotech Archives - Green Market Report

Adam JacksonJuly 27, 2022
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7min130

Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) posted positive third-quarter results – showing the resilience of the Québec mega-producer amid waning profits for many throughout the sector. The company announced its third-quarter financial and operating results for the three and nine-month periods ending May 31, 2022.

For the key metric of quarterly revenue, Cannara saw a 36% gain of $10.1 million – a record high – since the previous quarter, and 41% increase since this time last year at $24.1 million in year-to-date revenue. The company also delivered a positive net income of $1.4 million for the quarter.

CEO Zohar Krivorot said, “We continue to be ahead of schedule on all of our stated objectives for this year while at the same time delivering record revenue, our fifth positive quarter of Adjusted EBITDA, and positive net income.”

The company also posted its fifth consecutive quarter of positive adjusted EBITDA of $1.8M with a net income of $1.4 million, up from an adjusted EBITDA of $34,000 in the previous quarter. The gains represent $2.8 million for the first nine months of 2022 compared to $139,000 of adjusted EBITDA for the first nine months of 2021, “all while continuing to support over $700,000 in one-time startup expenses for the Valleyfield Facility,” the release said.

Valleyfield

Approximately 4,800 kg of cannabis or 1,286,000 units were sold across three flagship brands during the nine-month period of 2022, an increase of over 1 million units sold compared to the same period last year. The company also invested $4.9 million in capital expenditures during the quarter and over $12 million during the nine-month period, the bulk of the capital expenditures related to the finalization of the construction of the Valleyfield facility. Cannara has $13 million in working capital as of May 31, 2022.

“We are also pleased to report to shareholders that our new state-of-the-art Valleyfield Facility, as of today, is producing six out of its twenty-four growing zones, each containing 9,600 plants,” said Krivorot. “We have multiple successful harvests delivered from our new facility, which provides us confidence in our ability to continue our expansion and to grow consistent premium-grade cannabis at scale.”

Benefits of Banking Access

Cannara said in December that it planned to optimize additional debt financing from CIBC to finalize the redesign of several zones at the Valleyfield Facility as a way to replicate the indoor cultivation environment, including growing without utilizing the sun and launching the operations at the site – all while leveraging Québec’s low electricity costs.

Following the report, the company intends to fashion its long-term goals with the help of a $50 million credit facility secured by BMO Commercial Banking. The credit facility includes a three-year term loan for $39.3 million with an accordion for up to an additional $10 million, a $5 million line of credit, and $5.7 million for the issuance of a letter of credit. Funding was received after the quarter-end in May.

In June, Cannara used part of the $39.3 million from that term loan to repay the existing $21.8 million loan with CIBC and $5.7 million for the issuance of a letter of credit to cover certain deposit requirements. The company also granted a total of 600,000 stock options to employees and 613,333 stock options to consultants at an exercise price of $0.18.

“The credit facility provides the company with the necessary liquidity to continue to execute on our expansion plans,” said CFO Nicholas Sosiak. “These additional resources will assist Cannara to increase its cannabis supply through capital investment at the Valleyfield Facility with a continued focus on providing consumers with premium products at sustainable, market-disrupting high value propositions.”

Sosiak said the strategy helps the company increase market share while simultaneously entering new provinces.

“Given that Cannara only operates today in 2 major Canadian markets,” he said, “I am really excited for the Company’s long-term picture as we have plenty of room for growth.”

Cannara is a vertically integrated producer of premium-grade cannabis and derivative products with two mega facilities based in Quebec spanning over 1,650,000 sq. ft., today. The company now has six of its 24 growing zones in full production, representing 150,000 square feet of canopy holding over 55,000 plants that can be harvested four times per year.

 


Debra BorchardtDecember 8, 2021
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6min60

Cannara Biotech Inc. (TSXV: LOVE) (OTCQB: LOVFF) announced its fourth quarter and fiscal year 2021 financial results for the ending on August 31, 2021. Cannara reported total revenue of $6.5 million for the fourth fiscal quarter, an increase of $5.9 million from $0.6 million in the fourth quarter of 2020. The company also delivered a net income of $1.1 million, an increase of $5.0 million from a net loss of $3.9 million in the fourth quarter of 2020. The adjusted EBITDA amounted to $1.4 million, an increase of $2.8 million from a negative adjusted EBITDA of $1.4 million in the fourth quarter of 2020.

For the full fiscal year of 2021 Cannara reported total revenue of $17.3 million, an increase of $14.7 million while the net loss amounted to $1.5 million, a significant decrease of $11.6 million from a net loss of $13.1 million in the prior year. The operating expenses fell by $2.9 million compared to prior year and the adjusted EBITDA amounted to $1.5 million, an increase of $9.8 million from the year prior.

“Our impressive increase in revenue this quarter and incredible overall results for this year demonstrate a year of sustained growth and profitability, one which continued to drive our net income and adjusted EBITDA up,” said Zohar Krivorot, President & Chief Executive Officer of Cannara. “Our three flagship brands carved unique niches in the industry, offering handcrafted, hang-dried, slow-cured and hand-trimmed cannabis with the flower’s natural properties intact. The consumer response to these products outperformed even our expectations, as we saw a remarkable increase in both new and loyal customers embracing the dynamism of our product portfolio. We are also thrilled by the continued expansion of our Cannara family, as we increasingly rely on purpose-driven leaders whose talent for strategy shape the organization’s competencies. Over the course of the next fiscal, we are well-positioned for national growth and will continue to seek opportunities that support our mission, allocating efforts to existing and new activities.”

Looking Ahead

Cannara said it plans to optimize the additional debt financing from CIBC to finalize the redesign of several zones at the Valleyfield Facility in order to replicate the indoor cultivation environment, including growing without utilizing the sun and launching the operations at the site. The first 25,000 square foot zone was propagated with 9,600 plants in November 2021 and the next 25,000 square foot zone is planned to be propagated in January 2022. Cannara also stated that its existing cash resources of $8.2 million (as of August 31, 2021), along with the forecasted cash flows and financing that occurred subsequent to year-end, will enable it to fund its planned operating expenses for at least the next twelve months from August 31, 2021.

“Our tremendous growth was driven by strategic retail activities in Québec, combined with well-thought-out operational development investments, the cultivation and sale licenses of our two mega facilities, and the cannabis revenues generated during the second half of 2021,” said Nicholas Sosiak, Chief Financial Officer of Cannara. “The incredible performance, strong balance sheet, and increase in gross profit all underscore our long-term growth strategy and commitment to our customers, against the backdrop of strong demand for our products. As we continue to generate profitable growth and outsized returns, we will move forward from a position of financial strength and are ideally positioned to showcase continued positive Adjusted EBITDA.”

After the quarter and fiscal year ended, Cannara secured an additional bank credit amounting to $22 million increased from a previous loan of $5.4 million with Canadian Imperial Bank of Commerce, and expanded to the Ontario market. The company also launched two new hash products within the Nugz brand in Quebec retail stores; Old School Hash in a 3-gram bar and Ice Water Hash in a 1-gram temple ball.


StaffJuly 28, 2021
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4min130

Cannara Biotech Inc. (OTCQB: LOVFF) announced its third-quarter results for the period ending May 31, 2021, with total revenue of $7.2 million, including $5.9 million in cannabis sales, net of excise tax. this was a huge gain over last year’s $763,906. The net income for the company was $1.7 million versus last year’s net loss of $2.5 million.

“This quarter’s results are a testament to our strategy’s efficacy and management’s focus,” said Zohar Krivorot, President & Chief Executive Officer of Cannara. “With impressive revenue generation in our first full quarter of sales in retail market, the closing of our additional $5 million private placement, and headline acquisition of our latest one million square foot facility in Valleyfield, we are now positioned among the country’s leading cannabis producers.”

Cannara said it sold approximately 1,400 kg of cannabis it had in inventory from previous harvests for a total value of $1,265,000.

“Our positive net income and strong gross margins confirm our operational excellence, uniquely lean company structure, and continued growth,” said Nicholas Sosiak, Chief Financial Officer of Cannara. “Cannara’s core competence is our differentiated model that underscores our ability to excel at maximizing the use of our resources. We are executing against this proven model, as we continue to scale our business in the next chapter of our growth roadmap.”

Following the end of the quarter, Cannara acquired a one million sq. ft. state-of-the-art cultivation facility from The Green Organic Dutchman Ltd. (“TGOD”) for $27 million, providing it with the ability to reach an annual cultivation capacity of 125,000 kg of premium-grade cannabis. The company also launched an additional six SKUs in the market under the Tribal and Orchid CBD brands in June 2021 and released three new cannabis genetics, Cuban Linx, Do-Si-Dos, CBD Runtz, in dried flower and pre-roll formats

On the financial side, Cannara closed private placements of $24.3 million priced at a premium to the market price at the time of the transaction and $5.7 million in convertible debentures bearing interest at 4% to fund the acquisition of the Valleyfield facility and related working capital expenditures. It converted the company’s existing $5 million credit facilities bearing interest at 13% into a convertible debenture bearing 4% interest and subject to a statutory hold period of four months and one day from the date of issuance.

In addition, it uplisted to the TSX Venture (TSXV) from the Canadian Stock Exchange (CSE) on April 8, 2021, reflecting the company’s maturity and the commercialization of its operational strategy.


StaffNovember 27, 2019

4min50

Flower One

Flower One Holdings Inc. (CSE: FONE) (OTCQX: FLOOF) reported that its third-quarter revenue was $2.5 million, with sequential quarterly growth of 292% and representing seven weeks of sales from the greenhouse. The company also reported that net income totaled $15.7 million,  which was mainly driven by the gain on the growth of biological assets of $18.4 million and a gain on the fair value of derivatives of $9.7 million.

“This was another milestone quarter for Flower One as, among other things, it was the first reporting period that included revenue contributions from our flagship greenhouse,” said President and Chief Executive Officer, Ken Villazor. “During the quarter, we completed and fully commissioned our 55,000 square foot production facility and welcomed three additional industry-leading brand partners to our growing portfolio. Our greenhouse and production facilities are now fully operational and yielding industry-leading analytics. This, combined with securing 15 brand partnerships, was accomplished within 19 months and places us in an exciting and truly unique path to profitability and positive cash flow in the first half of 2020.”

Flower One has made a big splash since its brand Old Pal became the leading flower brand in the state of Nevada within its first three months of sales. Old Pal and NLVO are among the top ten selling flower brands in Nevada.

Flower One said in a statement that it has now completed 15 harvests, which on average have produced a cultivation yield of 32 grams per square foot at an average harvested cash cost of $0.44 per gram. Flower One’s dry cannabis is now transitioned daily to its 55,000 square-foot production facility to generate a wide variety of the most in-demand cannabis products and brands from across the United States. The production facility currently consumes 3,000 to 5,000 pounds of biomass per week. In the last two months, the production lab has also begun producing an extensive product library of high-quality concentrates including shatter, batter, cookie crumble, wax/budder, THCA diamonds, THCA sugar and LPG high terpene sauces.  The company’s first lots of concentrates will enter the market this quarter.

Cannara Biotech

Cannara Biotech Inc.  (CSE: LOVE) (OTCQB: LOVFF) has not yet generated cannabis-related revenues from its Canadian operations and is still in progress of completing the construction of Phase 1 of the Farnham Facility which is required to obtain the License. Still, it has funded ShopCBD.com Inc. with an $8 million private placement to support the launch of the online e-commerce platform for the sale and distribution, in the US, of hemp-based CBD products. It has over $26 million of available cash. The company reported net loss of $3,810,875 for the year ended August 31, 2019

 


William SumnerOctober 10, 2019
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5min60

It’s time for your Daily Hit of cannabis financial news for October 10, 2019.

On the Site

Nevada Marijuana Licenses Makes Appearance In Russian Campaign Violation Arrest

The two Russian nationals that were arrested on Thursday for campaign finance violations also tried to apply for marijuana licenses in Nevada according to the arrest allegations. The document said that  Lev Parnas, Igor Furman, David Correia and Andrey Kukushkin “planned to use Foreign National-1 as a source of funding for donations and contributions to State and federal candidates and politicians in Nevada, New York and other states to facilitate acquisitions of retail marijuana licenses.”

HEXO Corp.

HEXO Corp. (TSX: HEXO)(NYSE: HEXO) stock was plunging almost 20% as the company told Wall Street that its revenues would be lower than expected. The company said in a statement that it now expects net revenue for the fourth quarter to be approximately $14.5 million to $16.5 million and net revenue for the year to be approximately $46.5 million to $48.5 million.” This is a far cry from the company’s claim in June that it was on track to reach $400 million in net revenue in 2020 and said it would double net revenue in the fourth fiscal quarter.

MediPharm Labs

MediPharm Labs Inc., a wholly-owned subsidiary of MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF), has secured a $38.7 million credit facility from a top 5 Canadian Schedule 1 bank. Although the company initially sought $20 million, the credit facility was upsized and is comprised of a revolving term facility, a non-revolving term facility and a non-revolving delayed draw term facility.

In Other News

Village Farms International

Village Farms International, Inc. (TSX: VFF) (NASDAQ: VFF) announced that a group of underwriters co-led by  Beacon Securities Limited and GMP Securities L.P. have agreed to purchase, on a bought deal basis, 2,660,000 common shares of the company at a price of C$9.40 per share. The total value of the offering is approximately C$25 million. Pending regulatory approval, the offering is expected to close on or around October 22, 2019. The net proceeds of the offering will go towards working capital and general corporate purposes.

Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced that David Klein has been appointed Chair of its Board of Directors effective immediately. Klein is currently the Executive Vice President and Chief Financial Officer of Constellation Brands, Inc. “There is no company better positioned to win in the emerging global cannabis market. I look forward to continuing to work with Canopy Growth’s very talented leadership team to position the company for long-term, industry-leading profitable growth,” Klein said in a statement.

Cannara Biotech

Cannara Biotech Inc. (CSE: LOVE) (OTCQB: LOVFF) (FRA: 8CB) has secured a first mortgage against its Farnham Facility, valued at $6 million, with the Canadian Imperial Bank of Commerce.  The mortgage will help reduce the company’s debt service costs. “Once Cannara’s cultivation and sales licenses are granted we’ll look to augment this mortgage to further reduce our debt service costs,” commented Zohar Krivorot, President and CEO of Cannara.


William SumnerJuly 25, 2019
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5min30

It’s time for your Daily Hit of cannabis financial news for July 25, 2019.

On the Site

Leafwire

Leafwire, the largest cannabis business network worldwide, announced today the closing of a Seed Round for $1 Million. Since its launch, Leafwire has grown rapidly, often with over 1,000 members visiting the platform daily. Leafwire currently boasts more than 16,000 members currently and is projected to surpass 25,000 members by the end of the year.

Executive Spotlight: Jessica Velazquez, Managing Partner of Indiva Advisors LLP

Jessica Velazquez is a Certified Public Accountant (CPA) licensed in Illinois & Nevada and Partner of Indiva Advisors LLP, a full-service accounting firm for cannabis and hemp businesses.

Heavenly Rx

The hemp-CBD company Heavenly Rx Ltd. announced today that it has closed its acquisition of Tru Brands Inc. Tru Brands is a health and wellness company focused on developing a suite of all-natural food products. Under the agreement, Heavenly Rx will acquire a 51% stake in Tru Brands for $3.5 million in cash and $2.57 million in company stock. Through a series of working capital injections, the company will eventually increase its stake in Tru Brands to 62%.

Auxly Cannabis

The tobacco industry is betting big on cannabis. Today, Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF) announced that the international tobacco company Imperial Brands PLC will make a $123 investment in the company through a convertible debenture.

In Other News
Namaste Technologies

Namaste Technologies Inc. (TSXV: N) (FRANKFURT: M5BQ) (OTCMKTS: NXTTF) announced that it has settled a series of class action lawsuits filed against the company in both the United States and Canada. The suits were filed in response to a report published by Citron Research alleging securities violations.  Without admitting guilt or liability, Namaste will pay $2.15 million to settle claims in Canada and $2.75 million to settle claims in $2.75. Much of the payout will be funded through the company’s insurance, Namaste itself will only contribute $500,000. In a statement, interim CEO Meni Morim said that the settlement was a “win-win for Namaste Shareholders and business partners alike.”

Cannara Biotech

Cannara Biotech Inc. (CSE: LOVE) (FRA: 8CB) (OTCQB: LOVFF) announced the release of its financial results for the third quarter, ending on May 31, 2019. Lease revenue was $506,785 and lease operating costs were $221,157. The company’s operating expenses for the quarter was $150,429, amortization expenses were $150,429, and the net loss was $2.8 million. As of May 31, 2019, Cannara had a net working capital amount of $28.43 million, which should be sufficient to fund its planned construction and operating expenses for at least the next year. “Given the size of our facility and the self-evident need for greater supply in the marketplace, we are as committed and confident as ever in our mission to be an integral cannabis producer in the Canadian landscape, combining scale with premium quality,” said said Zohar Krivorot, President and CEO of Cannara.

SOL Global Investments Corp.

SOL Global Investments Corp. (CSE:SOL (OTCPK:SOLCF) ) (Frankfurt:9SB) announced a $2 million capital infusion its portfolio company CannCure Investments Inc. The capital infusion is aimed at accelerating expansion initiatives of companies owned, or soon to be owned, by CannaCure; including Northern Emerald and One Plant Dispensaries.


William SumnerMay 15, 2019
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4min50

It’s time for your Daily Hit of cannabis financial news for May 15, 2019.

On the Site

CNBC’s Tim Seymour Goes One On One With SLANG’s CEO Peter Miller

Miller talks about the early days of cannabis legalization in Canada, the fast growth of SLANG and new products being launched by Firefly. Watch Now

Illinois’ Cannabis Rules Dissected at the Green Market Summit

The Governor of Illinois recently released details of the state’s proposed rules for adult-use cannabis. The Green Market Summit had organized a panel that took place just days after the announcement in Chicago. Watch Now

The Green Organic Dutchman

After the markets closed yesterday, The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (OTCMKTS: TGODF) reported their first quarter financial results for the period ending on March 31, 2019. Quarter-over-quarter revenue rose by 28% to $2.4 million. Much of that revenue was generated from the recently acquired HemPoland. The company experienced a net loss of $14.1 million.

In Other News

Aurora Cannabis

Late yesterday, Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) announced their third quarter financial results for the period ending on March 31, 2019. Net revenue was $65.14 million, up from $54.17 million in the previous quarter. Adjusted EBITDA was $36.6 million, down from $45.52 million in the previous quarter. The company incurred a loss of $158.35 million.

Cannara Biotech

Cannara Biotech (CSE: LOVE) (OTCQB: CNBTF) announced today that it has commenced trading on the OTCQB® Venture Market under the symbol “CNBTF”. “Cannabis and hemp-CBD markets are global markets, with customers, vendors and investors domiciled across all major industrial nations,” said Zohar Krivorot, President and CEO of Cannara. ” Having a listing in the U.S. not only provides easier access for U.S. and international investors to our story, it supports our mission of being a North American premium provider of health and wellness products in large and growing product categories.”

1933 Industries

1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) announced that its subsidiary, Alternative Medicine Association, has completed a sale and lease back for its cannabis cultivation facility in Las Vegas, Nevada. The purchase price for the transaction was $10.45 million, which the company has received minus a $500,000 hold back to be released upon the completion of the facility and issuance of permanent occupancy permits, and a $250,000 hold back to be released upon issuance of state and local permitting for the facility. The transaction included a lease-back agreement for 10 years, with an option to renew for two additional five year periods.

 


William SumnerApril 29, 2019
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6min110

It’s time for your Daily Hit of cannabis financial news for April 29, 2019

On The Site

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) reported that its 2018 total revenue was $3.3 million versus zero in 2017. The pro-forma combined Aleafia Health and Emblem revenues in 2018 were $11.3 million an increase of 327% over a combined Aleafia Health and Emblem 2017 revenues of $2.7 million. Still, the company delivered a net loss from operations in 2018 of $9.7 million.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. The company said that design development would begin immediately with construction expected to start this summer.

Origin House

Canada-based Origin House (once known as CannaRoyalty Corp.) (CSE: OH) (OTCQX: ORHOF) reported its fourth quarter and year-end results ending in December 2018 in Canadian dollars. The fourth quarter saw revenues of $7.9 million an increase of 638% over last year’s $1.1 million for the same time period. The net loss for the quarter was $6.1 million.

In Other News

Charlotte’s Web Holdings

Charlotte’s Web Holdings Inc. (CSE: CWEB) (OTCQX: CWBHF) has a new CEO. The company announced today that Adrienne “Deanie” Elsner would sign on as its Chief Executive Officer effective May 15, 2019.  Elsner previously served as President of Kellogg’s $3 billion Snack Business Unit. Before joining Kellogg, Elsner worked at the Kraft Foods Company and held various leadership positions, including Executive Vice President and Chief Marketing Officer. Elsner was also named by Forbes as one of the 50 Most Influential Global CMOs. “Deanie’s appointment is timely and aligns perfectly with our corporate evolution from the early stage organization we were just two years ago into a professionally managed public company with top-tier executive talent,” said Hess Moallem, current President and CEO of Charlotte’s Web. Moallem will stay on with the company in an advisory position.

New Leaf Data Services

New Leaf Data Services (NLDS), and the Cannabis Mercantile Exchange (Cannamerx) have signed a data-sharing agreement, upon which Cannamerx will provide NLDS with real-time data generated by its international cannabis and hemp trading platform. NLDS will incorporate the platform into its Cannabis Benchmarks® and Hemp Benchmarks® wholesale price assessments. NLDS will help Cannamerx market its international wholesale cannabis & hemp products auction platform, which includes informing its business partners and subscribers about the benefits of using Cannamerx platform. “We are pleased to have entered into this agreement with Cannamerx, which will expand and deepen the wholesale pricing data that is the foundation for our institutional grade Cannabis Benchmarks and Hemp Benchmarks,” commented NLDS CEO Jonathan Rubin.

Cannara Biotech

Cannara Biotech (CSE: LOVE) (FRA: 8CB) has announced its financial results for the three month and six-month periods ended February 28, 2019. Cannara ‘s revenue for the three-month period was $518,438 and for the six-month period was $1,036,881. The net loss for the three month period was $4,011,926 or $0.01 loss per share. The net loss for the six-month period was $6,317,152 or $0.01 loss per share. The company also raised $37,375,268 via private placement in exchange for 207,640,375 common shares. “Financially, Cannara is very solid, with all costs associated with Phase one construction fully funded and most stabilized operating costs offset by lease revenue,” said Lennie Ryer, CFO of Cannara. “Built for the long run, the next few quarters will be eventful as we complete construction and advance towards the goal of ongoing revenues from our state-of-the-art production and processing facility.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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