Eaze Archives

Kaitlin DomangueFebruary 24, 2021

It’s time for your Daily Hit of cannabis financial news for February 24th, 2021.

On the Site

Ardent Life: A Company Revolutionizing Cannabis Technology

Ardent Life Inc., was founded in 2015 by Shanel Lindsay. The Green Market Report is featuring a series of Black-owned businesses for Black History Month, and Ardent Life is part of that.

Lindsay developed the sublingual method of administering cannabis after years of fiddling with her dose. This administration route had never been introduced to the cannabis industry before, which led to Lindsay immediately protecting her concepts before other companies could grab hold of it. In 2014, G.W. Pharmaceuticals gave $100 million to the company to support FDA trials of the company’s sublingual sprays, Sativex and Epidiolex.

Besides her work with Ardent, Shanel is an attorney and activist for the cannabis industry, fighting for equity amongst the industry.

Michigan May Get Its Own Marijuana Stock Exchange

Cimone Casson is the owner of cannabis insurance brokerage firm Cannas Capital, Michigan Chapter President for Minorities 4 Medical Marijuana, and the driving force behind another initiative that is poised to push Michigan to the forefront of social equity. Casson’s objective is to create a local stock exchange, the Michigan Marijuana Market, that focuses on raising capital for minorities in local communities impacted by the War on Drugs.

Former Eaze CEO Pleads Guilty in Bank Fraud Case

James Patterson, the former CEO of California cannabis delivery platform Eaze pleaded guilty to one count of conspiracy to commit bank fraud according to a report at Law360. The plan was a scheme to deceive banks into processing more than $100 million worth of credit and debit payments for marijuana purchases. The major banks and credit card companies like Visa (NASDAQ: V) and Mastercard (NYSE: MA) refuse to work with cannabis companies as the product is still federally illegal. So any transactions using these products or lying to banks about the nature of the transactions is illegal.

The Pros and Cons of CBD Joints

Pros:

Great flavor
Easy to assemble ahead of time
Higher bioavailability

Cons:

Potential danger to your health
Antisocial

In Other News

Agrify Announces New Advisory Board

Vertical grow solutions company, Agrify (NASDAQ: AGFY), has announced the formation of its new Strategic Advisory Board.

Rosie Mattio, Founder and Chief Executive Officer of MATTIO Communications, and Matthew Kressy, Founding Director of the MIT Integrated Design & Management (IDM) program, have both been appointed to serve as trusted advisors to the Company. The Advisory Board has been established to bring together a talented and accomplished group of outside leaders to provide strategic guidance and industry expertise on various aspects of Agrify’s business, including market opportunities, public relations, and hardware and software design and solutions.

Debra BorchardtFebruary 24, 2021

The timing of the guilty plea is worth noting as the bank fraud trial of businessmen Ruben Weigand and Hamid Akhavancomes is scheduled for March 1 in the Southern District of New York federal court. In March of 2020, Ruben Weigand and Hamid “Ray” Akhavan were charged with conspiracy to commit bank fraud over charges that occurred between 2016 and 2019. They were alleged to have created a bunch of fake companies to trick banks into processing credit and debit payments for marijuana products from legal sellers. The two asked the court to dismiss the indictment saying that no one was harmed in the scheme. However, the case was allowed to move forward.

Prosecutors said Weigand and Akhavan worked with executives at an online marijuana marketplace company to facilitate the sales, although they haven’t named the business. Eaze, an online company offering delivery from dispensaries, was the subject of a lawsuit last year that alleged it worked with Akhavan to utilize shell companies to process credit card payments. That case was settled. While Eaze was not specifically named in the case by the prosecutors, only an unnamed online marijuana marketplace was mentioned, a connection has been made. Eaze was not charged in this case against the two. Patterson resigned from Eaze in 2019.

It is being suggested that the plea could be an indication that Patterson is with prosecutors and could testify against other defendants in an effort to lower his punishment.

According to Law360.com, Patterson is reported to have admitted to working with Weigand and Akhavan to disguise the purchases because he “understood that if banks were aware of the nature of the transactions they would not allow them.”

Eaze Denies Involvement

For its part, Eaze denied the allegations in the 2019 lawsuit and has said it had cooperated with federal authorities and “is not a defendant in” the case against Patterson. Eaze also quit accepting payments of this nature in mid-2019. However, legal experts say the allegations don’t end because the transactions ended. The dispensary owners are no doubt nervously watching the outcome of this case. They could also be dragged into this for committing bank fraud. If the dispensary owners knew that Visa and Mastercard would not accept payments for cannabis transactions and they still pursued a scheme that managed to make that happen, are they guilty? That is yet to be determined.

Julie AitchesonNovember 18, 2020

Though April 20th takes the top prize in cannabis sales year after year, Green Wednesday (Black Friday’s cannabis counterpart) has come in a strong second place since its inception in 2016, and 2020 looks to be no different. As a result of clever moves by retailers to offset pandemic-related impacts on buying behavior, starting deals and discounts earlier in the season than ever before, and tailoring the shopping experience to customer health and safety concerns, Green Wednesday sales for 2020 are poised to hit an all-time high.

A November 16th press release from the National Retailers Federation and Prosper Insights and Analytics cited the results of an annual survey which showed that shoppers are getting an earlier start on purchasing for the upcoming holidays. According to the survey, 59 percent of holiday shoppers had already started making purchases as of early November– a 21 percent increase over figures from ten years ago. Despite the Covid crisis, consumers seem to feel confident in the efforts retailers are making to keep them Covid-free, with 70 percent saying they feel safe shopping in stores. One such safety measure includes stocking shelves with gift items earlier in the season and offering special deals to avoid overcrowding as the season progresses.

Deliveries Increase

Eaze, a cannabis delivery platform in California, posted new data showing that Green Wednesday 2019 saw a 90 percent increase in deliveries over a typical Wednesday and a 147% increase in deliveries over the previous year. Cannabis data and analytics provider Headset posted a comparison of Green Wednesday and Black Friday sales from 2019 on its blog, which showed record Green Wednesday sales, although savings lagged behind Black Friday bargains. The study attributes this to bigger discounts and lower average item prices on Black Friday.

Retailers hit hard and early with special deals and holiday gift packages to tempt those seeking to spread some cheer this holiday season and they’re not letting up as the week of Thanksgiving approaches. Beyond the standard pre-rolls, tinctures, and vape paraphernalia, companies like Her Highness, a lifestyle brand based in New York City, offer 25% off gift items like the Grindzilla Cannabis Grinder and the Lip Service Ashtray (shaped like, you guessed it, lips) while Indiana brand Cannabolish is promoting its products with a 30 percent Green Wednesday deal featuring its popular Odor Removing sprays and gels and candles to make sure cinnamon and pine are the only top notes in your holiday home.

Caliva is also offering a variety of deals on products that will help you survive the season – whether that be teaching grandma how to get on zoom (again) or kickstarting your metabolism for the big Thanksgiving feast. On Green Wednesday (11/25) Caliva is offering up to 40% off select top brands: Caliva, DELI Nickels, Plus Gummies, KIVA, and more! On Black Friday the company said customers will receive an extra deal when they pay through Hypur, the first digital payment solution for cannabis transactions. The promotion will be available through Caliva delivery online and all Caliva / DELI retail stores.

Top Selling Products

According to LeafLink, a B2B e-commerce wholesale marketplace that connects retailers and brands, in 2019, sales through LeafLink increased by 5.45% during the two weeks leading up to Green Wednesday and the Thanksgiving holiday weekend. What products were the most popular as retailers stocked up for the holiday weekend? Flower was the most popular product category at the time, making up 31.2% of the market share in the week leading up to Thanksgiving. However, Disposable Cartridges and Pre-Rolls experienced the biggest sales lifts, seeing a 29% increase and a 44% increase, respectively.

Here are the top 5 selling Pre-Rolls of 2020, according to LeafLink List:

Caviar Joint from Kaviar (CO)
Mini Fuzzies from Sublime, CA
Wedding Cake Pre-Rolls from Pacific Stone, CA
Relax & Chill Pre-Rolls from Exotic Blendz, OR
Bubble Joints from the Flower COllective, CO

So whether you go for some fancy swag, all-natural home care products, or perhaps a cozy fireside read like Bong Appetit (a weed cookbook from the editors of Munchies), there are ample ways to cross some friends and family off of your shopping list this year. If consumer behavior and favorable legislation continue on their current trajectory and retailers keep ably adapting to these uncertain times, Green Wednesday could give Black Friday and Cyber Monday some serious competition when the sales numbers come through for 2020.

Debra BorchardtJuly 16, 2020

The dispensary credit card fraud scheme that has ensnared the delivery company Eaze is set to move forward.

In March, Ruben Weigand and Hamid “Ray” Akhavan were charged with conspiracy to commit bank fraud over charges that occurred between 2016 and 2019. They are alleged to have created a bunch of fake companies to trick banks into processing credit and debit payments for marijuana products from legal sellers. The two asked the court to dismiss the indictment saying that no one was harmed in the scheme.

[The major credit card companies have refused to work with the cannabis industry as it is still federally illegal. This has caused major difficulties for retailers whose customers are accustomed to using debit and credit cards for most transactions. Numerous workarounds have been devised like installing ATM machines in dispensaries or creating a transaction where the buyer is making a debit transaction versus a credit card transaction.]

The two also argued that in addition to no one being harmed, “the Rohrabacher-Farr Amendment, a rider on a congressional appropriations bill that bans the U.S. Department of Justice from using its funding to prosecute businesses engaged in a state’s legal medical marijuana industry.” Law360 has reported that “on Wednesday, the government said the amendment has nothing to do with charges of conspiracy to commit bank fraud. The allegations center on the pair’s efforts to mislead the banks, which is a crime no matter what industry is involved.”

“The indictment clearly alleges facts showing that the issuing banks maintained a property interest in the funds they used to settle credit and debit card transactions for their cardholders, and that the banks issued such payments as a direct result of the deceptive scheme outlined in the indictment,” the prosecutors wrote.

Eaze Not Named

Prosecutors said Weigand and Akhavan worked with executives at an online marijuana marketplace company to facilitate the sales, although they haven’t named the business. Eaze, an online company offering delivery from dispensaries, was the subject of a lawsuit last year that alleged it worked with Akhavan to utilize shell companies to process credit card payments.

While Eaze was not specifically named in the case by the prosecutors, only an unnamed online marijuana marketplace was mentioned, a connection has been made. Eaze was not charged in this case against the two.

The Eaze Connection

In a lawsuit filed in 2019, Herban accused Eaze of ongoing, pervasive criminal activity. It should be noted that this case was dismissed by parties in January 2020 according to Law 360. Eaze was not charged.

To gain an unfair competitive advantage in the California cannabis delivery market, Eaze is directing,

coordinating, and participating in a scheme to defraud credit and debit card companies and financial

institutions into processing cannabis transactions in violation of a host of criminal laws, including

prohibitions against: (1) wire fraud (18 U.S.C. § 1343); (2) bank fraud (18 U.S.C. § 1344); and (3)

criminal fraud (Cal. Pen. Code § 532). By running a business that avoids the constraint of California

and federal laws, Eaze has obtained an unfair advantage over its competitors, including Herban,

who have been harmed and continue to be harmed by Eaze’s ongoing criminal acts.

To perpetrate these frauds, Eaze created or partnered with Cyprus- and U.K.-

based shell corporations that purport to sell these seemingly innocuous products but in fact exist

solely or primarily for the purpose of misrepresenting the nature of the underlying transactions (the

“Eaze Shell Companies”).

Herban owned Chill, a group of former Eaze employees that split off to create a competing platform. Back in April 2019, the company DionyMed terminated its contract with Eaze and claimed that “Based on review by outside counsel, DYME could not confirm that the processing procedure meets California regulatory requirements.” The company said it was going to invest in its own delivery service called “Chill.” DionyMed through its dispensary store Hometown Hearts claimed that Eaze was using shell accounts to create fraudulent charges and payment processing, which was the excuse it needed to terminate a three-year contract.

Eaze countersued and claimed in its countersuit that Hometown Heart knew that the payment processors it accused of fraud, were its own processors, not Eaze’s. Eaze has said repeatedly, “It doesn’t process claims.”

In its customer delivery receipts, Eaze tells its customers that they will see the charge for their purchase through Eaze on their card statement, and that the charge will be associated with some entity other than the actual merchant from whom they purchased the product. The customer delivery receipts reflect an express promise by Eaze to submit false information into the credit and debit card payment system, which Eaze does, on information and belief, to ensure that the transactions are not flagged or caught by the Payment Card Companies as Precluded Activities.

The complaint went on to say:

Eaze worked with an individual named Hamid “Ray” Akhavan (“Akhavan”) in an effort to restart credit and debit card processing on the Eaze Platform. Eaze directed several cannabis dispensaries, including some of its largest partners, to

meet with Akhavan in Calabasas, California regarding a new credit and debit card solution. In or around March or April 2018, at Eaze’s direction, representatives from various dispensaries attended the meeting with Akhavan in Calabasas (hereinafter the “Akhavan Meeting”). On information and belief, when the representatives for the dispensaries arrived at the meeting

location, Akhavan’s ostentatious purple Lamborghini was parked outside.

Are The Dispensaries Guilty?

Eaze quit accepting payments of this nature in mid-2019. However, the allegations don’t end because the transactions ended. The dispensary owners are no doubt nervously watching the outcome of this case. They could also be dragged into this for committing bank fraud. The case uses the term “conspiracy,” indicating that it isn’t just these two and that others could be involved. If the dispensary owners knew that Vias and Mastercard would not accept payments for cannabis transactions and they still pursued a scheme that managed to make that happen, are they guilty?

At least while cannabis foe Attorney General Bill Barr is at the top of the Department of Justice, the dispensaries are probably right to be worried. Some dispensaries tried to back out of the Eaze deal and were refused by Eaze who told them they had to meet certain volume goals.

In a statement, Eaze said the company is aware of the case and is “fully cooperating with the relevant authorities. Eaze transitioned to supporting new payment systems over a year ago, and this matter does not impact the current customer experience.”

Debra BorchardtFebruary 25, 2020

Financially challenged cannabis delivery company Eaze said it has raised $35 million in a Series D round and could raise an additional $20 million. The company closed on a $20 million investment led by Founders JT LLC, which joins a $15 million bridge round led by Eaze key stakeholders, Rose Capital, and DCM. Eaze also said it had secured the ability to raise up to an additional $20 million to fund the company’s pivot into plant-touching businesses. verticalization and brand strategy to expand access to safe, legal, and affordable cannabis products.

Eaze Chief Executive Officer Ro Choy said, “Verticalization is Eaze’s second act. Until now, we’ve invested in proving our market fit, building an enormous and loyal customer base, and becoming California’s biggest marketplace for legal cannabis delivery. Now, we’re proving we can make this business work in a more sustainable and profitable way, while continuing to grow Eaze’s existing services.”

Eaze Picks Up Former Rival’s Dispensary

In a strange twist to this move, Eaze acquired DionyMed Brand’s (OTC: DYME) rights to retail licensee Hometown Heart (HTH) depots in Oakland and San Francisco, and now has oversight of HTH’s day-to-day operations. It wasn’t long ago that some of Eaze’s top employees left the company to work at DionyMed in an attempt to create a new delivery service at that company called Chill. The effort failed and in the process, the two companies began a word of words against each other resulting in lawsuits.

Hometown Heart had been a big part of the Eaze volume business but then DionyMed, then acquired the dispensary Hometown Heart from Evan Tenenbaum (one of the former Eaze employees according to the Eaze lawsuit) for $6 million with a potential amount rising to $12 million. Eaze says it has “purchased DYME’s *share* of the licensee HTH (which is a separate entity from DYME and always has been).” The amount paid was not disclosed, however, the lawsuit from DionyMed has been dropped. The former Eaze employees were not included in the HTH purchase, although the company said that many of the other employees retained their jobs. A spokesperson said, “lots of great folks whose jobs were at risk that worked in the DYME depots were able to keep their jobs as part of the ongoing, larger business.”

Eaze Products

In the coming weeks, Eaze said it will launch its own line of consumer brands in partnership with local licensees while continuing to support a broad array of independent, world-class California brands and independent licensed retailers across the state.

With regard to payment processing, Eaze said it doesn’t process payments (payment processors in partnership with licensed retailers do). “Eaze now has partial ownership in HTH non-storefront retail (this is a license type in CA).”

In Trouble

Last month a story in Tech Crunch suggested that the company was in dire financial trouble. The story said that Eaze had raised $166 million and the recent bridge round was literally to keep the lights on and make payroll. The company has laid off employees over the past year. According to the TC story, Eaze is claiming in its investor deck that the company has a valuation of $388 million. The story also states that Eaze “appears to only take payments via debit cards, ACH transfer and cash, not credit card.”

TC also said that in the presentation, that Eaze claimed that it makes $9.04 on an average sale of $85, which will go up to $18.31 if it successfully brings in “private label” products and has more depot control.

William SumnerSeptember 19, 2019

It’s time for your Daily Hit of cannabis financial news for September 19, 2019.

On the Site

Eaze

California delivery software company Eaze has finally gotten fed up with DionyMed’s (CSE: DYME) (OTC:DYMEF) accusations and filed a countersuit on Tuesday against the company. For DionyMed, it comes at a pretty bad time. The company just accepted the resignation of its COO Pete Hilliard and is restructuring its debt. Plus, the stock was halted in trading. So, where to begin? Let’s start with the Eaze lawsuit.

iAnthus

iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQX: ITHUF) has entered an agreement to acquire WSCC, Inc., better known as Sierra Well, for $27.6 million. iAnthus will pay for the acquisition price with $5.1 million in cash and $22.5 million in company shares, priced at the 10-day volume-weighted average price prior to closing of the transaction. Sierra Well is a Nevada-based, vertically integrated cannabis company with two retail dispensary locations and two cultivation/production facilities in Reno and Carson City totaling a combined 20,000 square feet

In Other News

Future State Brands

The cannabis brand holding company, Future State Brands, announced its launch today with more than $25 million in funding. The company is led by PRØHBTD CEO and Founder Drake Sutton-Shearer; and its portfolio includes a hemp cosmetics line, a music-inspired cannabis brand called Heavy Grass, and a line of infused products. “I’m excited to move into this next phase of our journey with a crystal clear vision of our desired future state. Although brands is the vehicle to get us there, it cannot be achieved without an incredible team, accessible capital and most of all, an understanding of the customer we are building for,” said Sutton-Shearer.

Vireo Health

Vireo Health International, Inc. (CNSX: VREO) (OTCQX: VREOF) announced today that its shares have received Depository Trust Company (DTC) full-service eligibility in the United States. DTC is a subsidiary of the Depository Trust & Clearing Corp., which manages the electronic clearing and settlement of publicly traded companies. DTC Eligibility will allow the company’s shares to be distributed, settled and serviced through DTC’s automated processes.

Debra BorchardtSeptember 19, 2019

2019-09-18 Eaze Technologies, Inc.’s Cross-Complaint

Eaze Countersuit

Let’s start with the Eaze lawsuit. Back in April, DionyMed terminated its contract with Eaze and claimed that “Based on review by outside counsel, DYME could not confirm that the processing procedure meets California regulatory requirements.” The company said it was going to invest in its own delivery service called “Chill.” DionyMed through its dispensary store Hometown Hearts claimed that Eaze was using shell accounts to create fraudulent charges and payment processing, which was the excuse it needed to terminate a three-year contract.

The only problem was that Eaze doesn’t process payments. It merely provides the software that facilitates the transaction between the consumer and the dispensary. The third-party processing companies would have been accounts that Hometown Hearts through its parent company Herban set up, not Eaze. Eaze said it can suggest payment processors and works with them, but doesn’t actually process the payment. The relationship is between the dispensary and the payment company.

Eaze is accusing DionyMed of dirty tricks in an effort to destroy the company and take over its business. “The defendants’ unethical and unscrupulous conduct has not only injured Eaze, it has created a threat to cannabis consumers, retailers, and the industry at large,” said Eaze’s Chief Risk Officer Andrea Lobato, “We intend to show how DionyMed’s campaign of dirty tricks was designed to confuse cannabis consumers and drive them to DionyMed’s competing platform, undermining all of the licensed brands and retailers that utilize the Eaze platform.”

DionyMed poached key employees like Evan Tenenbaum who was one of the first Eaze employees. Tenenbaum joined DionyMed’s board while also creating a logistics company called Rise Brands which was subsequently acquired by DionyMed for $8 million. Maurissa McCarthy was also hired from Eaze to run marketing for the new competing Chill platform.

DionyMed, then acquired the dispensary Hometown Heart, also from Tenenbaum (according to the Eaze lawsuit) for $6 million with a potential amount rising to $12 million. Hometown Heart had been a big part of the Eaze volume business. It wasn’t until DionyMed was ready to move to the Chill platform that it expressed issues with Eaze. Up until that point, Hometown Hearts was using Eaze and raking in millions while doing so. Canaccord Genuity analyst Bobby Burleson accurately predicted that Hometown Hearts sales would decline with the loss of the Eaze contract as the Chill platform was put into place, except Chill only accepted cash. Sales did decline, but for now, we’ll stick to the lawsuit.

Eaze also notes in its countersuit that Hometown Heart knew that the payment processors it accused of fraud, were its own processors, not Eaze’s. Eaze also claims its business was hurt by DionyMed accusing the company of fraudulent charges. Plus, the timing of the accusations right before the April 20 holiday affected Eaze’s ability to fulfill orders at the biggest sales day in the cannabis industry. Eaze says that the intention from Hometown Hearts was that the move would crush Eaze at an important time.

Hometown Heart also had access to the Eaze’s customer list and began targeting them for business and suggesting a link between Chill and Eaze, which wasn’t true, while at the same time suggesting Eaze was engaging in fraudulent credit card processing.

Eaze had tried to get the DionyMed case dismissed, but on September 11, a judge ruled the case could move forward. However, the judge stated in the court transcript that he didn’t believe DionyMed could prove its accusations. DionyMed saw this as a win for its side.

“Eaze’s alleged decision to terminate online card payments and cease working with EU Processing shortly after our complaint was filed is a powerful admission of guilt, and an acknowledgment that the allegations in our complaint are true. Those changes don’t go far enough,” said DionyMed CEO Edward Fields. “We are pleased with the court’s decision to allow our lawsuit to proceed. We will continue until the direct-to-consumer cannabis delivery playing field is level for all market participants, and Eaze has compensated DionyMed for the massive damages its conduct has caused our company and shareholders.” EU Processing, however, was the company hired by DionyMed to process the payments, not Eaze.

Stock Halted

DionyMed’s shares were halted in trading on Tuesday when the company announced it was restructuring its debt facility and opened back up for trading on Thursday morning as the stock slid over 30%. According to the company statement, DionyMed “Announced additional investment from its senior secured investor of $3.2MM and a reorganization of the business to right-size the Company. This increases the credit facility with the senior lender to US$19.2 MM. The credit facility bears interest at LIBOR (at a floor of 2.5%) plus 12% plus an anniversary fee of 2.5%, maturing February 6, 2021. While the credit facility is currently in default, the senior lender has agreed to make additional advances to the Company.” DionyMed will cut its employees from 299 to 199 and focus on the delivery service Chill.

Gotham Green Partners had provided a $2 million secured convertible note in August at an eye-popping interest rate of 12.5%. The notes are convertible into warrants at C$1.45, but the stock was halted at $0.56 a share. The company also announced today that “Gotham Green has issued a request for repayment of its outstanding balance of $2.2 MM representing the credit advance made on July 30, 2019 plus accrued and unpaid interest.”

“With respect to these changes,” said DionyMed CEO Ed Fields, “we’re looking forward to improving market efficiencies and getting the business to breakeven at an accelerated pace. We’re excited about finalizing a deal with the right strategic partner and injecting the capital necessary to drive DionyMed forward as a leader in the cannabis industry.”

In addition to the debt restructuring, DYME said its COO Peter Hilliard resigned and the company hired Mark Zinselmeier to take his place. Zinselmeier was working as a consultant on the Chill platform and will now focus on growing that business.

Licenses?

DionyMed continues making the odd claim that Eaze is behind its payment processing, which isn’t the case because as Eaze will say repeatedly, “It doesn’t process claims.” Even more strange is that Hometown Heart had its delivery license revoked. According to CannaBiz Media, State License A9-18-0000032-TEMP for Hometown Heart was issued January 26, 2018, expired August 19, 2019 and on September 16, 2019 was updated as “Revoked.” This was confirmed on the California Bureau of Cannabis Control website. Yet, just two weeks ago, DionyMed was announcing it had been awarded the license, even though it had been expired on 8/19/2019.

“DionyMed today also announced the award of a non-storefront retail provisional license in San Francisco, issued to Hometown Heart, a licensed California delivery service managed by DionyMed. The license allows DionyMed to deliver within San Francisco and the surrounding cities, the company’s largest direct-to-consumer market with more than 20,000 deliveries since its Chill Concierge Cannabis Delivery began service in April 2019.”

Although DionyMed did note in its September 4, filing that “The Bureau of Cannabis Control has approved Hometown Heart’s application M9-18-0000278-APP for a provisional license pursuant to Business and Professions Code section 26050.2 “ That filing was the credit agreement for $2 million, that was later upped to $3.35 million.

Also, on September 4^th Canaccord analyst Bobby Burleson wrote, “”While we are cutting our estimates due to capital constraints on growth and elevated costs, DYME’s announcement that the company has hired an adviser to assist in managing discussions with potential strategic partners is highly constructive, in our view, and warrants we maintain a SPEC BUY rating. We note that major MSOs have been accelerating their entry into the California market through investments in brands and distribution. DYME appears well-positioned in both regards, and with a growing home delivery platform its distribution capability spans wholesale and retail, marking the company as an attractive asset. Our price target remains C$6″

However, it should be noted that in an August 29 filing the company said that “On May 7, 2019, DionyMed closed a bought deal private placement financing with a syndicate of agents co-led by Canaccord Genuity Corp. and Cormark Securities Inc. for 3,822,055 units of the Company at a price of C$2.75 per Unit for aggregate gross proceeds to the Company of $7,148,824.” So Canaccord was clearly underwater when it continued praise the company.

DionyMed didn’t respond to a request for comment. Public Relations firm KCSA said the company was no longer a client

StaffJanuary 23, 2019

It’s time for your Daily Hit of cannabis financial news for January 23, 2019.

On The Site

Eaze

Eaze just released its 2018 State of Cannabis report giving insight into the buying habits of cannabis consumers. Eaze is a Calfornia-based cannabis delivery software company with buying history from 450,000 cannabis shoppers who have used Eaze for its delivery software service along with 4,000 survey respondents.

Cronos Group

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) entered into a credit agreement with Canadian Imperial Bank of Commerce and the Bank of Montreal for a $65 million secured non-revolving term loan credit facility. The Canadian-based cannabis company said it plans to use the funds to repay the Company’s existing loan facility with Romspen Investment Corporation and for general corporate purposes pending the closing of the previously announced equity investment by Altria Group, Inc.

Canopy Growth

Their future dream is a hothouse scheme, and after months of teasing its Canopy in the UK, finally. The Canadian medicinal marijuana luminary on Monday announced the creation of Spectrum Biomedical UK, a dedicated British firm targeting the underserved and uneducated but highly lucrative UK market, alongside a new Polish entity as part of a massive European campaign.

In Other News

Doyen Elements

Doyen Elements International, Inc., announced its rebranding and renaming itself to Covalent Collective , Inc. . In addition, the Company announced Bill Gregorak as Chief Executive Officer, effective immediately. Prior to being named CEO, Mr. Gregorak served as Chief Financial Officer of Covalent Collective since February 2018. Mr. Gregorak takes over as CEO from Geoffrey Thompson, a co-founder of Covalent Collective, who will continue as leader of merger and acquisitions.

In his role, Mr. Gregorak will direct all business units and strategy for Covalent Collective. Mr. Gregorak will also oversee the execution of the Company’s rebranding and acquisition strategy of plant-touching enterprises that grow, process and sell cannabis products.

Bella

Bella CBD-infused bath, body and skincare has released the first-ever silicone personal lubricant enhanced with the soothing and healing properties of CBD. Developed by cannabis industry thought leader Krista Whitley, Bella’s Olio d’Amore makes it easy to experience indulgent intimacy with premium CBD, encouraging optimal sexual wellness and intimate pleasure.

Debra BorchardtJanuary 23, 2019

CBD

Some of the key findings included the breakout year for CBD (cannabidiol) products and the increase in the number of women who have become cannabis consumers. The report called CBD the “darling” of 2018 after learning that CBD consumers nearly doubled in 2018 from 2.6% to 4.8%. Part of this could be attributed to the tsunami of CBD products hitting the market and the general acceptance of the product as being mostly legal. The 2018 Farm Bill legalized CBD derived from hemp. Baby boomers are driving the increased sales of CBD products with 8.4% of that business coming from that age group.

Women, in particular, are drawn to making CBD purchases. The Eaze report said that “Their preferred products appear to be more ‘beginner’ friendly.” The CBD-only customers reported a variety of effects from taking the product. 61% reported relaxation, while 41% reported anxiety and stress relief, while 40% reported pain relief.

Women

In 2015, women accounted for 25% of the cannabis market and that number has jumped to 38% in 2018. “Over the past year, the total number of women customers grew 92%,” said the report. It also suggested that at this rate, women could end up equaling men by the year 2022 for consumption.

Women were most likely to purchase edibles, drops, and topicals, while men tended to buy the traditional flower and concentrates. Gummies and the biggest edibles seller followed by bites, chocolate bars, cookies, and mints, respectively. Women also tend to consume cannabis more for personal care and sleep, while men use it for at-home entertainment and sports or exercise.

Substitutions

The report also determined that cannabis consumers tended to give up other things once they began to make regular cannabis purchases. Millenials reduced alcohol consumption and the Gen Z folks either quit tobacco smoking entirely or at least cut it down. All demographics said they reduced their use of over-the-counter pain relievers and prescription pain medicines. Over the counter drug purchases fell by 71% and prescription painkillers fell by 35%.

It seems by consuming cannabis, people are focusing more on the benefits of wellness. Bad habits like alcohol and cigarettes drop as consumers look to cannabis to feel better and contribute to an overall wellness behavior.

Jack SmithAugust 8, 2018

Despite the overwhelming majority of Californians being happy with the legal cannabis market, there is still a significant percentage of residents who buy marijuana illegally, due in large part to high taxes on the substance.

A new report from Eaze Insights shows that 84 percent of Californians are “satisfied” with the legal marijuana market, but approximately 20 percent have purchased illegal or illicit marijuana in the past three months. Concerning to regulators and the state’s finances is that 84 percent of that segment of the population is “highly likely to repeat that behavior in the future due to the illicit market having cheaper products and no tax.”

Part of the concern is that although consumers would like to purchase marijuana legally if, given the option, the taxes are a major concern for many consumers. According to the California Department of Tax and Fee Administration, marijuana has a 15 percent excise tax, though recent reports have suggested the state is looking at cutting taxes as a way of driving legal means of consumption.

Approximately 85 percent of Californians have purchased cannabis from “unlicensed sources,” but most of them cited factors such as lower prices and a lack of taxes for the reasons those purchases were made.

Other consumers say they have purchased from illegal marijuana vendors because it’s “hard and time-consuming” to find legal businesses. Approximately 1 in 7 respondents said it was “not easy to identify licensed cannabis businesses.”

Although the picture has been painted with some negative brushes, there are changes that can be made that will positively affect California’s burgeoning weed economy.

If taxes were decreased by 5 percent, that could drive much of the illegal market into the legal market, Eaze notes. The town of Berkley took that initiative early on when it lowered its city tax on cannabis from 10% to 5%.

“A 5% decrease in the overall tax rate in CA could bring twice as many CA consumers to only purchase cannabis from licensed businesses (from 16% to 32%),” Eaze wrote in an email obtained by Green Market Report. “Conversely, a 5% increase in the overall tax rate in CA would drive twice as many CA consumers to only purchase from unlicensed businesses (12% to 23%).”

Use cases in the state include wellness (treating or coping with illnesses such as cancer) and consumers are increasingly becoming more sophisticated in the types of cannabis they consume.

“They care the most about consistent product quality, fair pricing, packaging, safe access and a great customer experience, the same way they care about those things for more traditional consumer products,” the email obtained by GMR said.

Newer Posts

Older Posts

Exopharm Is Buying Tryp Therapeutics In All Stock Deal

New Federal Legalization Bill Gives Industry Possible Rallying Point

In other news

DEA Warns Georgia Pharmacies Against Selling Medical Marijuana

New York Regulators Greenlight Rec Market Entrance of Six Medical Cannabis Behemoths

Slow Rollout of Connecticut’s Adult-Use Cannabis Program Starting to Spook Entrepreneurs

Eaze Archives - Page 2 of 4 - Green Market Report

The Daily Hit: February 24th, 2021

On the Site

In Other News

Former Eaze CEO Pleads Guilty In Bank Fraud Case

Gearing Up For Green Wednesday