Cansortium Archives - Green Market Report

Debra BorchardtMay 4, 2021
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7min6960

Following the close of the markets on Monday, Cansortium Inc. (OTCQB: CNTMF) released its fourth-quarter and full-year results for 2020. Revenue increased 54% to $14.7 million in the quarter versus $9.5 million for the same time period in 2019. Cansortium also delivered a net loss of $8.4 million in the quarter, an improvement over last year’s net loss of $32.8 million for the same time period.

For the full year of 2020, Cansortium reported its revenue increased 84% to $52.4 million versus last year’s revenue of $28.5 million. This was lower than the company’s forecast of $55 million. Cansortium attributed the difference to the sale of the 2020 Michigan crop that was initially included in its 2020 projection but was delayed to 2021, causing the variance between actual and forecasted. Excluding Michigan operations, revenue was $52 million, which exceeded the company’s projection of $49 million from operations in Florida and Pennsylvania.

The net losses were trimmed to $36.6 million from 2019’s net losses of $65.6 million. The company said its consolidated Adjusted EBITDA increased significantly to $10.3 million, compared to adjusted EBITDA loss of $(6.9) million for the same period of 2019.

“Our strong fourth-quarter results reflect the many improvements we have made across the organization, and that momentum has carried into 2021,” said Chief Executive Officer Robert Beasley. “The success of our recent debt and equity raise provides the capital required to fund our expansion in Florida and Pennsylvania. In April, we achieved record monthly sales in Florida of approximately $5 million following the launch of our new Sweetwater cultivation facility, and we are underway in negotiating the final terms on a new cultivation facility with 40,000 ft2 of capacity to complement both our Tampa and Sweetwater locations, bringing our total cultivation capacity in Florida to more than 150,000 ft2 by the end of 2021. In our retail operations, our 25th Florida dispensary in Miramar is set to open in June, and two additional dispensaries in Fruitland and Deerfield Beach are expected to open by the end of the third quarter.”

Beasley added, “In Pennsylvania, we also achieved record first-quarter revenues of more than $2 million and expect to have our second dispensary in Mechanicsburg open in July and have identified a location for our third dispensary, which we expect to open in the fourth quarter.”

Beasley added, “We have also continued to make key hires to strengthen our management team. In May, we hired Marco Malatrasi as our new Director of Operations of Florida. Marco has nearly a decade of Cannabis production experience having worked at MedMen, USA Hemp and MJardin. Marco will report directly to Executive Vice President, Samantha Senne. With a strong foundation of assets and people in place, we look forward to delivering on our robust growth and profitability outlook for 2021.”

2021 Outlook

Cansortium is projecting consolidated revenue of approximately $90 million to $100 million for 2021. In addition, the Company projects consolidated Adjusted EBITDA of approximately $30 million to $35 million for 2021.

With the successful completion of the $17 million private placement and $71 million Secured Term Loan, the company said it has appropriate resources and working capital to support growth and expansion. In addition, previous initiatives focused on growth and long-term shareholder value creation enabled the Company to ramp and generate record sales in April 2021.

In its home state of Florida, the company started operations of its new Sweetwater facility and is investing in operational improvements in its existing Tampa facility. In retail, the company will continue to expand its footprint during 2021 with a total of 27 dispensaries anticipated to be operational by the end of 2021, with an additional four locations identified by year-end. The Company expects approximately $70-80 million of 2021 revenue to come from its operations in Florida.

In Pennsylvania, the Company is opening an additional dispensary location in Q3 2021 and expects to open a third location in the fourth quarter 2021. In Michigan, the company has approximately 2,600 lbs. of biomass in inventory and 900 lbs. of flower being prepared for sale. The Company anticipates that all will be sold within the next 60-90 days.


StaffApril 30, 2021
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5min8280

GTI

Green Thumb Industries Inc.  (OTCQX: GTBIF) announced that it has closed on a $217 million senior non-brokered private placement financing through the issuance of senior secured notes. GTI said it plans to use the proceeds to retire its existing $105 million senior secured debt due May 2023 and for general working capital purposes as well as various growth initiatives.

“History has taught us that the winners in new industries are those with the lowest cost of capital and the strongest balance sheets,” said GTI Founder and CEO Ben Kovler. “Our successful non-brokered offering (gross=net) was supported by members of the management team in addition to a diverse group of new and existing high-quality, institutional investors who share in our strategic vision and plan to capitalize on the opportunities ahead. This financing represents industry-leading cost of capital in the legal cannabis industry and strengthens our balance sheet. This new capital will allow us to focus on shareholder value creation through strategic investments to scale our existing operations in addition to accretive M&A opportunities.”

The Notes have a maturity date of April 30, 2024 and will bear interest from the date of issue at 7% per annum, payable quarterly, with an option, at the discretion of the company, to extend an additional 12 months. The financing permits the Company to borrow an additional $33 million over the next twelve months. The purchasers of the Notes also received an aggregate of 1,459,043 warrants. Each Warrant is exercisable to purchase one subordinate voting share of GTI at an exercise price of $32.68 per share, for a period of 60 months from the date of issue.

Cansortium

Cansortium Inc.  (OTCQB: CNTMF) has closed a $71 million Senior Secured Term Loan due April 29, 2025. The company plans on using the proceeds to repay convertible debentures that were due in May and strengthen the balance sheet. 

“Today marks a new beginning for Cansortium as we now have the financial flexibility and liquidity that the Company needs to continue growing its attractive asset base,” said Chief Executive Officer Robert Beasley. “Proceeds from the Term Loan have been used to satisfy substantially all of the Company’s existing indebtedness, including repaying $27.1 million of convertible debentures due in May. These actions have resulted in more than $40 million of cash being added to our balance sheet from the Term Loan and the equity offering completed earlier this month. With a strengthened balance sheet and simplified capital structure, we are now firmly positioned to execute our growth and expansion initiatives in our core FloridaPennsylvania, and Michigan markets.”

Neal Hochberg, Cansortium’s Chairman of the Board added, “By extending our debt maturities by four years and bolstering our liquidity, the Company can now focus all of its attention on maximizing value.”

Mr. Beasley added, “Since taking over as CEO in September 2020 , we have made dramatic improvements across key aspects of our business, particularly in Florida where we have significantly increased cultivation yields, introduced new SKUs and form-factors such as edibles, and expanded cultivation and production capacity to better supply our 24 operational dispensaries (expected to increase to 27 by year-end). Florida remains the single largest limited-license cannabis market in the U.S. and we currently have the sixth largest footprint in the state. I am proud of our team’s early accomplishments up to this point and look forward to capitalizing on the many growth opportunities ahead.”

 


StaffNovember 23, 2020
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4min7710

Cansortium Inc. (OTCQB: CNTMF) delivered revenue of $14.3 million for its third-quarter ending September 30, 2020. This was a 94% increase over last year’s $6.9 million for the same time period. The company also trimmed its net losses to $8.9 million or $(0.04) per diluted share versus a net loss of $(11.3) million, or $(0.06) per diluted share for the same period last year.

The company also delivered a  cut in the consolidated losses from operations of $(1.9) million versus a loss from operations of $(8.1) million in the third quarter of 2019. The consolidated Adjusted EBITDA of  $3.6 million was an improvement over the adjusted EBITDA (1) loss of  $(2.1) million in the third quarter of 2019.

Cansortium has reiterated its full-year 2020 outlook for consolidated revenues in the range of $55 million to $60 million and Adjusted EBITDA of approximately $14 million. The forecast is based on projected revenues of at least $45 million for Cansortium’s Florida operations with additional revenue from the MichiganPennsylvania, and Texas markets.

During the third quarter of 2020, Cansortium opened its 21 st medical marijuana dispensary in Coral Springs, FL. It operated 16 dispensaries during the comparable period in 2019. In October and November of 2020, the company opened its 22 nd and 23 rd Florida dispensary in Coral Gables, FL, and Kendall, FL, respectively.

Outlook

Cansortium said in a statement that it has continued to make progress on its targeted initiatives focused on growth and long-term shareholder value creation.  “In its home state of Florida, the company secured an additional cultivation and production facility during the second quarter of 2020 with minimum capital outlay, with operations anticipated to commence in the fourth quarter of 2020, and has opened five of the six dispensaries planned for 2020.  In Pennsylvania, the company is actively pursuing two additional dispensary locations to augment the strong sales of its existing Hanover dispensary.  In Michigan, the company enhanced the cultivation team on the ground with the engagement of Freedom Town. Finally, in Texas, the Company recently secured an extension of its convertible notes to allow the company to continue to seek longer-term solutions there.”

 


StaffJuly 7, 2020
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6min7670

It’s time for your Daily Hit of cannabis financial news for July 7, 2020. 

On the Site 

Jushi Holdings 

Jushi Holdings Inc. (JUSHF) announced its financial results for the first quarter ending March 31, 2020, and pre-announced its second-quarter 2020 revenues. Total revenue for Jushi increased 43% sequentially to $8.6 million, while the company delivered a net loss for the quarter of $15.8 million. The net losses were down slightly from the fourth quarter’s net losses of $17 million. 

The company attributed the increase in revenue to the acquisition of two medical marijuana dispensaries in Illinois, one of which began serving adult-use customers in March, and strong revenue growth at the Company’s BEYOND/HELLO stores in Pennsylvania. 

CannaGlobal 

Despite the continuing opportunities for the cannabis industry, many companies have decided that they don’t want to miss out on the emergence of the mushroom industry. The latest entry to the psilocybin race is CannaGlobal Wellness. 

This company is a combination of CannaGlobal, Sansero Life Sciences, and Rise Wellness. The new company said it will focus on psilocybin and other natural compounds to promote emotional, mental, and physical wellness. The company believes that its assembled team of cannabis executives will prove to be a winner in the increasingly crowded space for psilocybin, which is still an illegal substance. 

California 

The Santa Barbara County Grand Jury issued its 2019-2020 Final Report on June 30, 2020. The last section of this report is devoted to the County’s actions relating to the cannabis industry. This last section of the Report is a scathing indictment of the manner in which greed for money and power influenced the governance of Santa Barbara County in its adoption of ordinances relating to cannabis. 

The following is an introductory summary of the Report. 

“The action taken by the Santa Barbara County Board of Supervisors to certify the development of a robust cannabis industry as the primary objective of the cannabis ordinances has altered the quality of life in Santa Barbara County, perhaps forever.”

In Other News 

Cansortium Inc. (OTCQB: CNTMF) announced financial results for its first quarter ended March 31, 2020, and reiterated its full-year 2020 outlook. Consolidated revenue increased 84 percent to $10.2 million, compared with revenue of $5.5 million. Consolidated net loss totaled $(13.9) million, or $(0.07) per diluted share, compared to consolidated net loss of $(16.3) million, or $(0.10) per diluted share. 

The Company reiterated its full-year 2020 outlook for consolidated revenues in the range of $55 million to $60 million and Adjusted EBITDA of more than $15 million. The forecast is based on projected revenues of at least $45 million for Cansortium’s Florida operations with additional revenue from the Michigan, Pennsylvania and Texas markets.  

The Company expects to open up to six additional Florida dispensaries during the remainder of 2020, contingent upon timing of construction and final permitting. These locations include Coral Gables, Kendall, and Coral Springs. In addition, the Company expects to develop two new dispensaries in the south-central region of Pennsylvania during 2020 that will begin operating by early 2021. 


William SumnerAugust 29, 2019
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5min10600

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

On the Site

Tilray

Tilray, Inc.  (NASDAQ: TLRY) will be buying Alberta-based dispensary chain FOUR20 through its wholly-owned subsidiary of High Park Holdings Ltd. The recreational retail brand provides adult-use cannabis consumers with a premium retail experience focused on high-quality product selection, education, and community. FOUR20 currently operates six licensed retail locations and has 16 additional high-traffic locations secured in desirable locations in Alberta, including Canmore, Calgary, and Edmonton.

Food, Drug or Something Else: What is Hemp-Derived CBD?

It has been just over a month since the public comment period closed in the wake of the public hearing held by the FDA, “Scientific Data and Information about Products Containing Cannabis or Cannabis-Derived Compounds”. Over 4,000 comments were docketed, ranging from controlled scientific data submissions to tales of miracle cures to horror stories. It will be interesting to see what the agency gleans from the docket.

Los Angeles Bringing Back The “War on Drugs” for Illegal Commercial Cannabis Activity

Bringing Back The War – A bit of background on illegal storefront dispensaries tells us And the enforcement in California will come from both state and local authorities. The City of Los Angeles recently launched a massive crackdown on unlicensed, illegal cannabis businesses, filing misdemeanor charges against more than 500 people and shutting down 105 illegal cannabis businesses, including cultivation operations, extraction labs, and delivery companies across the city

In Other News

Cansortium

Cansortium Inc. (CSE:TIUM.U) (OTCQB: CNTMF) reported its second quarter revenue today. Consolidated revenue increased to $6.1 million. The consolidated net loss was $5.3 million. Consolidated EBITDA was $1.8 million. “While we continued to execute our strategy to expand cultivation, processing, and dispensaries during the second quarter, a combination of unexpected delays in construction needed in order to secure final regulatory approvals at our Tampa cultivation Phase 2 expansion, as well as delays in opening certain previously planned Florida dispensaries, led to second quarter revenues that were lower than originally anticipated. As a result, we are experiencing an approximate six-month delay on our plans presented earlier in the year,” said Cansortium CEO Jose Hidalgo.

Vireo Health

Today, Vireo Health International, Inc. (CNSX: VREO) (OTCQX: VREOF) reported its financial results for the second quarter. Operating revenue totaled $7.2 million, and the net loss was approximately $1.9 million.  EBITDA and adjusted EBITDA were $0.8 million and $2.3 million, respectively. “Increasing patient enrollment in Minnesota and New York continued contributing to organic revenue growth during the second quarter, and wholesale demand trends in Maryland and Pennsylvania have also been encouraging signs that our products can compete effectively within a broader marketplace,” said Vireo Founder and CEO, Kyle Kingsley.

Gabriella’s Kitchen

Gabriella’s Kitchen Inc. (CSE: GABY) also released their financial results for the quarter. Revenue was $2.5 million, up from $319,737 in the same period in the previous year. The gross loss declined from $264,607 to $49,712. As of June 30, 2019, the company has $11.5 million in cash and $37.3 million in assets. “When we announced our target on May 7, 2019 of $35 million in pro-forma revenue for the fiscal year, we took into account that Q2 would be a slower quarter due to the delayed closing of our $20 million raise, the company’s short-term decision to allocate available capital to maintain relationships and shelf space with dispensaries, and the transitioning from a shared distribution model in Southern California to a sole distribution model, staffed with our internal salespeople,” said Margot Micallef, Founder and CEO of GABY.


StaffAugust 21, 2019
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4min10460

It’s time for your Daily Hit of cannabis financial news for August 21, 2019.

On The Site

Cresco Labs

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) reported that its second-quarter revenue rose 253% to $29.9 million over last year in its unaudited financial results for the second quarter ending June 30, 2019. The revenue rose 42% sequentially. The company attributed the increase in revenue to new market expansion and continued growth in existing markets with a higher revenue generated in Pennsylvania, Illinois, and California.

Cresco Labs also delivered a net loss of $3.9 million versus last year’s net income of $1.6 million for the same period. The net loss was blamed on an income tax expense of $5.6 million, primarily driven by discrete tax items related to the legal close of the acquisitions of MedMar Inc. and PDI Medical.

IRS

IRS Updates CTR Exams – The IRS has recently provided interim guidance to clarify actions IRS Examiners must take to analyze and document Currency Transaction Report (CTR) data during an audit.  The Guidance, which is effective immediately, will be incorporated into IRM 4.10.4, Examination of Returns, Examinations of Income.

Prior to incorporation, IRM 4.10.4 provided very little guidance on when and how to use the Financial Crimes Enforcement Network’s (FinCEN) Currency Transaction Reports [See Structuring Rules ]. However, this new guidance assists examiners during an audit of a taxpayer’s returns and income.

In Other News

Indus Holdings

Indus Holdings, Inc. (CSE:INDS) announced its financial results for the fiscal second quarter ending June 30, 2019.  The company generated second quarter record revenue of $9.7 million, 183% year-over-year and 51% sequential growth. It added 87 new dispensaries during the quarter. Announced acquisitions of CBD brands Shredibles and Humble Flower Co. Entered Nevada and Oregon markets through its pending acquisition of W Vapes, a licensed multi-state manufacturer and distributor of cannabis products

Cansortium

Cansortium Inc. (CSE: TIUM) (OTCQB: CNTMF), a vertically-integrated, global provider of premium-quality medical cannabis operating under the Fluent brand, announced today that it will begin trading today on the OTCQB Venture Market under the ticker “CNTMF”.  This is an upgrade from the Company’s previous classification on the Pink Open Market.

Cansortium Chief Executive Officer Jose Hidalgo emphasized, “We are very pleased to begin trading on the OTCQB Venture Market less than five months after our initial public offering on the Canadian Securities Exchange, adding valuable visibility and additional liquidity for the benefit of our shareholders. We are intently focused on executing our growth strategy by expanding our cultivation capacity and dispensary platform in our home state of Florida and establishing our Fluent™ brand of cannabis products as a leader in each market where we choose to compete.”

ManifestSeven

ManifestSeven California’s first integrated omnichannel platform for legal cannabis, today announced it has acquired the Haven (formerly operating as ShowGrow) dispensary in Santa Ana, California.

“This acquisition represents the first dispensary in our B2C strategy, as unveiled last week under the Weden retail dispensary and delivery brand” The dispensary will be rebranded Weden Santa Ana to serve as the flagship location for Weden, M7’s new business-to-consumer brand that encompasses brick-and-mortar retail and delivery operations throughout the state, as supported by the 1-800-CANNABIS customer service center.


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