Emblem Archives

StaffApril 29, 2019

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.

Aleafia Health gross profit in 2018 was $1.6 million. Emblem experienced a net loss in 2018 of $24.3 million. Aleafia Health and Emblem had combined cash on hand of $63.2 million at December 31, 2018.

“2018 saw Aleafia Health build the foundation for a breakthrough 2019 and beyond. We believe that our strategically placed assets, strong management team and distribution channels will allow us to scale our global mission of growing, processing and selling high-margin, value-added cannabis health and wellness products,” said Aleafia Health CEO Geoffrey Benic. “It is a testament to the execution capabilities and commitment of our team that Aleafia Health has grown from a pre-revenue business to one of the largest licensed producers in under one year.”

Looking Ahead

In the company statement, Aleafia said that with the anticipated expansion of its three production facilities, together with confirmed supply agreements, it should reach an annual production capacity of 138,000 kg of dried flower and extraction capacity of 50,000 kg. The company also gave the following updates:

The automated Niagara Greenhouse is now in a plant-ready state, with complete construction and retrofitting of the facility expected to be completed in May 2019.
The company received local zoning approval for a 26-acre low-cost outdoor grow on prime agricultural farmland adjacent to its operational Port Perry facility. The Company expects to bring the Outdoor Grow to a plant-ready state in the next week, with perimeter fencing and other required security measures now nearing completion.
Construction of the Phase II expansion in Paris is expected to be completed in June 2019, with all necessary equipment in place to begin production by mid-Q3 2019. Additionally, the Company will offer tolling and white label services to other licensed producers looking to leverage the Company’s extraction and packaging capabilities.
The company said it intends to leverage the benefit of preferred wholesale pricing under existing multi-year supply agreements, anticipating our first shipment of dried flower and crude resin from Aphria Inc. in mid-2019 as part of the largest ever supply agreement between licensed producers. Aleafia Health will also leverage the three-year, 9,000 kg supply agreement with Natura Naturals Holdings Inc., a wholly-owned subsidiary of Tilray Inc.

Debra BorchardtJanuary 22, 2019

Tilray, Inc. (TLRY) has entered into an agreement to acquire all of the issued and outstanding securities of cannabis cultivator Natura Naturals Holdings Inc. in a deal valued at $35 million, but could ultimately grow to $70 million.

Under the terms of the agreement, Tilray will deliver C$35 million at closing. This will be made up of C$15 million in cash and C$20 million in Tilray Class 2 common stock. The statement said that if Natura reaches certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved.

Based in Leamington, Ontario, Natura operates a 662,000 sq ft licensed greenhouse that was undergoing a phased conversion and retrofit that was expected to bring up to 15,000 kg of annualized cannabis production online in 2018. Once completed in 2019, the facility is expected to bring total annualized cannabis production capacity to approximately 70,000 kg per year.

Last July, Emblem Corp. (OTC: EMMBF) had planned to acquire Natura in a deal with a potential value of $76 million. By September though the deal fell apart and the agreement was terminated. Emblem had actually advanced Natura C$2 million for the expansion of its facility.

“We’re very pleased to have an agreement in place that allows us to expand our capacity to supply high-quality branded cannabis products to the Canadian market,” said Brendan Kennedy, Tilray President, and CEO. “Through an extensive and thorough search for the right supply partner, we’re pleased to have come to a mutually-beneficial agreement with Natura.”

If this deal is completed, Tilray will obtain Natura’s 662,000 square-foot greenhouse cultivation facility, of which 155,000 square-feet is currently licensed, and all subsequent cannabis output from this facility. Natura, through a wholly-owned subsidiary located in Leamington, Ontario, is a licensed cultivator under the Cannabis Act specializing in the greenhouse cultivation of cannabis.

Debra BorchardtDecember 19, 2018

Aleafia Health Inc. (TSXV: ALEF) is acquiring Emblem Corp. (TSXV: EMC, OTCQX: EMMBF) are in an all-stock deal valued at approximately $173.2 Million. The combination will create Canada’s largest medical cannabis clinic network with 40 clinics and education centers.

Aleafia’s stock slid slightly by 1% to $1.05, while Emblem’s stock jumped over 13% to lately trade at 81 cents on the OTC Markets.

As a result of the acquisition, Aleafia’s patients will get access to Emblem’s products including capsules, oils and oral sprays. They will also get access to the Emblem e-commerce platform. Aleafia will also get to use Emblem’s license to process medical cannabis products and sell these directly to the patients.

“The Emblem acquisition rapidly accelerates the execution of Aleafia’s strategy to become a vertically integrated, diversified cannabis company. It is difficult to overstate the significance of securing the highest quality medicine for our patients and Aleafia,” said Aleafia Health CEO Geoffrey Benic. “Emblem’s product leadership in the medical and adult-use sectors and highly coveted supply agreements will perfectly complement Aleafia’s cannabis production and clinic operations.

Aleafia said that it expects to leverage Emblem’s approval to supply to the Provinces of Ontario, Saskatchewan, British Columbia and Alberta; national medical distribution through Shoppers Drug Mart; and national retail distribution through Fire & Flower, Starbuds and the emerging OnePlant network. The statement said that through Emblem’s joint venture with German pharmaceutical wholesaler Acnos Pharma GmbH, Aleafia will gain to access that medical cannabis market serving more than 82 million people, with access to approximately 20,000 pharmacies, along with access to Australia’s burgeoning medical cannabis market upon completion of Aleafia’s previously announced transaction with CannaPacific Pty Ltd.

“Emblem’s patient-focused product portfolio and strength in patient education, conversion and retention through GrowWise will be further bolstered by the patient acquisition capabilities of Aleafia’s Canabo clinics. The combination of the companies will form a fully integrated market leader in the medical cannabis sector, with industry-leading patient counts, and the ability to immediately capitalize on full revenue potential,” said Emblem CEO Nick Dean. “Furthermore, our renowned national brands, robust footprint in emerging value-added products, and strong domestic and international growth opportunities will cement our position of strength in this highly competitive market.”

Terms Of The Deal

According to the statement, the agreement calls for Emblem shareholders to receive 0.8377 of an Aleafia common share in exchange for each Emblem common share, representing the equivalent of $1.21 per Emblem Share and a premium of 27.0% based on the closing prices of Aleafia and Emblem Shares on the TSX Venture Exchange on December 18, 2018. The shares were lately trading at C$1.40. When the deal is completed, it is expected that existing Aleafia and Emblem shareholders will own approximately 59.0% and 41.0% of Aleafia, respectively, on a fully diluted in-the-money basis.

Aleafia and Emblem said in the stament that they currently have access to a combined CAD $69.9 million in cash, to be used for continued product innovation and brand building, construction and development of their cultivation facilities and outdoor grow operations, to support expansion efforts and to pursue strategic opportunities and investments that maximize shareholder value.

Debra BorchardtNovember 20, 2018

Emblem Corp. (EMMBF) delivered revenues of $2.3 million, a 281% increase year-over-year and a 50% increase quarter-over-quarter. Still, Emblem reported a net loss of $10.8 million versus last year’s loss of $2.8 million for the same time period. The adjusted EBITDA fell to a loss of $2.8 million from the previous year’s loss of $1.9 million. The company blamed the decrease on higher operating expenses.

The company said that the increase in revenues was a result of the commencement of oil sales during December 2017 and the launch of the adult-use recreational market in the third quarter of 2018.

“This quarter marked a significant period of transformation for Emblem as we strategically aligned the business around our core strengths. This began with the signing of one of the largest business to business cannabis supply agreements, increasing our aggregate annual product supply run rate to approximately 30,000 kilograms beginning in mid-2019,” said Nick Dean, President & CEO, Emblem Corp. “During the quarter, we began to realize the significant revenue impact of our Symbl brand within the adult-use market as we fulfilled 100% of our provincial commitments while maintaining product availability for our growing number of registered patients.”

Higher Expenses

Emblem said that the expenses increased as a result of the continued build-out of the company’s management team, as well as higher business development, legal and consulting fees incurred in connection with various strategic initiatives with respect to supply management, cultivation expansion, product development, and distribution. Higher selling and marketing costs were due to brand development, brand awareness, and media campaigns in connection with the launch of the company’s new adult-use brand Symbl, in preparation for the Cannabis Act coming into force.

Post Quarter End

Emblem said that its patient count increased to approximately 6,000 active registered patients, representing a 122% increase in the patient count since the beginning of the year. The company has signed a supply agreement with the BC Liquor Distribution Branch and obtained supply approval with the Saskatchewan Liquor and Gaming Authority.

With regards to the adult-use business, the company said that distribution partners were indicating robust demand for Symbl cannabis products and re-stocking had occurred since the end of the quarter. The company has shipped 134 kilogram equivalents of Symbl cannabis products to the OCS, AGLC and Fire & Flower Inc., with additional deliveries scheduled for the remainder of the fourth quarter.

William SumnerAugust 23, 2018

It’s time for your Daily Hit of cannabis financial news for August 23, 2018.

On The Site

Canopy Growth Corporation

Canopy Growth Corporation (CGC) is spinning off its venture capital investment arm called Canopy Rivers Corporation. The company has set September 12, 2018, as the date for a shareholder meeting regarding the proposed combination of Canopy Rivers and AIM2 Ventures. It had been previously announced that Canopy Rivers had entered into an agreement with AIM2 resulting in a reverse take-over of AIM2 by Canopy Rivers. The transaction is expected to close during the week of September 17, 2018 subject to the approval by the TSX Venture Exchange. The new symbol will be RIV.

CannaRoyalty

Canadian-based CannaRoyalty (CNNRF) reported its second-quarter earnings for the period ending June 30, 2018, with revenues increasing 266% to C$3.5 million versus last year’s revenues of C$960,157. In addition to that, CannaRoyalty made huge strides by delivering net income of C$9.3 million for the quarter versus last year’s net loss of C$2 million. The net income per diluted share was $0.17 as compared to a net loss per diluted share of $0.05 for the same time period in 2017.

In Other News

Emblem Corp.

Emblem Corp. (EMC), announced that it had secured a working capital advance for Natura Naturals Holdings Inc. The advance will help support the completion of Phase 1 construction of a 662,000 licensed greenhouse operated by Natura that is undergoing phased conversion and retrofitting while both companies negotiate a definitive agreement for Emblem to acquire Natura. The advance is made up of a one-year convertible debenture for a sum total of of up to $2,000,000. The advance is convertible into Natura shares at $0.80 per share plus one full share purchase warrant exercisable at $1.05.

Khiron Life Sciences

Khiron Life Sciences (KHRN) announced that it has priced and sized its marketed offering of common shares at a price of $0.90 per share to raise a total of up to $11.25 million. The offering will be overseen by a syndicate of agents led by Canaccord Genuity Corp. and including GMP Securities L.P., Sprott Private Wealth LP, and Cormark Securities Inc. Additionally, the agents have been granted an over-allotment option by the company to offer and sell up to an additional 15% of the number of share sold in the offering. The company expects to file a final short form prospectus form, in respect to the offering, on or around September 6, 2018 and the offering is expected to close on or around September 13, 2018.

Emerald Health Therapeutics Inc.

Emerald Health Therapeutics (EMH) and Village Farms International Inc. (VFF) announced that their joint venture, Pure Sunfarms, has received from Health Canada its third amendment to its cultivation license for its Delta 3 greenhouse in Delta, BC. The amendment will allow Pure Sunfarms to expand its production capacity to approximately 420,000 square feet of the facility’s 1.1 million square feet. “We are thrilled with the rapid pace at which the Pure Sunfarms team continues to complete conversion of additional production area, as well as the rapid pace at which it has been able to secure amendments to its cultivation license to steadily expand production,” said Michael DeGiglio, CEO of Village Farms. “It’s a testament to the value of decades of large-scale operational experience combined with an unwavering approach to doing things the right way.”

Naturally Splendid

Naturally Splendid (NSPDF) reported second-quarter results for the period ending June 30, 2018, and recorded a net loss of $1,565,098 during the six months ended June 30, 2018, compared to a loss of $2,029,552 during the six months ended June 30, 2017. The decrease in net loss was due to the sale of POS BPC Manufacturing Corp. which provided for a gain on sale of $1,535,096, offset by an increase in selling and distribution costs of $5,273 and Administrative expenses of $1,041,721 mainly due to the addition of the Prosnack business which were not included in the expenses in the comparative period, as the acquisition occurred on October 18, 2017.

Naturally Splendid recorded sales of $804,502 during the six months ended June 30, 2018, compared to $1,068,949 for the six months ended June 30, 2017. This revenue decrease was mainly due to the collapse of sales of bulk hemp seed to South Korea where the Company had recorded $Nil bulk sales in the current quarter compared to $245,400 in the six months of 2017.

Video StaffJuly 27, 2018

The big news this week was the announcement by Acreage Holdings of its $119 million capital raise. This U.S. cultivator is in 13 states and soon to be 15. It is the largest U.S. cannabis company raise and sets the company on a solid path to becoming publicly traded this fall on the Canadian stock exchange. The most amazing part of this story is that Acreage did this without hiring bankers. That’s baller.

The Cato Institute released a new report that said if drugs were legalized the government could save billions of dollars in drug enforcement and also make billions in tax revenues.

Emblem ended up buying all of Natura Naturals in a deal valued at C$76 million. The company announced last week that it made a $3 million dollar investment. This week it decided to buy the whole enchilada.

MariMed acquired iRollie in a deal valued at $600,000.

MedMen completed a strategic investment in Lowell Herb Co., the California pre-roll company known for its celebrity endorsements and marijuana flower crowns.

CV Sciences released unaudited second quarter results boasting Q2 revenue of$12.3 million, up 203% over last year and a 53% sequential increase. The company also announced that it has applied to list on the NASDAQ Capital Market. Until approved, the company will continue trading on the OTC Markets under its current symbol, CVSI. “We believe up-listing from the OTC Market to the Nasdaq Capital Market will increase corporate visibility, improve liquidity, and broaden awareness in the financial markets,” said CV Sciences CEO Joseph Dowling.

Bespoke Extracts was approved for an uplisting to the OTC Venture Market Place. “We are very pleased to be trading on the OTCQB as it will provide our shareholders and potential new investors with greater transparency and liquidity in our common stock.

PotNetwork Holdings had to take back its Form 10 to become a fully reporting SEC company after its accounting firm lost its certification. On Thursday the company hired a new firm and is back on track.

Debra BorchardtJuly 26, 2018

Emblem Corp. (EMMBF) signed a non-binding Letter of Intent to acquire all of the issued and outstanding securities in Natura Naturals Inc. that it does not already own for C$25 million in cash, C$12.5 million in mortgage financing and 26,102,941 common shares of Emblem. Emblem recently announced a C$3 million investment in the company and an agreement for 3,000 kg of cannabis supply per year.

The deal is valued at C$76 million (inclusive of Natura shares already owned by Emblem). As a result of this acquisition, Emblem will further its aggressive approach to sales growth both domestically and internationally backed by robust supply from the Natura greenhouse.

“Through the due diligence process of investigating Natura as a supply partner, we uncovered significant synergies between the two organizations,” said Nick Dean, CEO of Emblem Corp. “Providing high-quality products to Emblem’s medical and adult-use audiences continues to be our top priority. With the added capacity from Natura, we are able to aggressively pursue our focus on product innovation, building great brands and finding distribution partners domestically and internationally.”

Ontario-based Natura operates a 662,000 sq ft licensed greenhouse that is currently undergoing a phased conversion and retrofit that is expected to bring up to 15,000 kg of annualized cannabis production online in 2018. Once completed in 2019, the facility is expected to bring total annualized cannabis production capacity to approximately 70,000 kg per year. Natura will also bring 32 proprietary cannabis strains to Emblem’s library, significantly increasing Emblem’s intellectual property.

According to the company, Emblem currently has supply agreements with Shoppers Drug Mart nationally, the Alberta Gaming and Liquor Commission, and has an LOI to form a joint venture with German pharmaceutical wholesaler Acnos Pharma GmbH. Emblem also has submitted an application to supply the Ontario Cannabis Stores in Ontario. Under Emblem’s portfolio, it is expected that Natura will be a stand-alone brand in the adult-use market, joining Symbl, Emblem’s recently launched recreational brand.

In light of the Natura acquisition, Emblem has made the decision to suspend greenhouse construction plans at their Paris Road location. The construction of Emblem’s GMP certified lab located at their Woodslee location will continue with an anticipated completion date of December 2018.

Debra BorchardtJuly 18, 2018

Emblem Corp. (EMMBF) is making a $3 million strategic equity investment into Canadian cannabis company Natura Naturals Inc. In addition to the investment, the two companies have also signed a three-year cannabis supply agreement for Natura to provide Emblem up to 3,000kg of high-quality cannabis flower per year from its Phase 1 cultivation facility. The deal is expected to close later this week.

“We are extremely excited about the opportunities that our new-found Emblem partnership holds for us. With our first commercial LP sale, the future growth, venture possibilities, and business transactions that lie ahead for Natura seem very promising,” said Ben Nikolaevsky, President, and CEO of Natura Naturals.

Initial cannabis product deliveries to Emblem are expected to start in October 2018 with a total of 750kg deliverable for the balance of 2018. According to the statement, the agreement increases Emblem’s total available cannabis by approximately 37.5% in 2018 and significantly accelerates Emblem’s product availability to coincide with the launch of the adult-use market in October 2018.

“Our partnership with Natura quickly accelerates our time to market, with an immediate increase in product volume, supporting both our medical and adult-use demand,” said Nick Dean, President, and CEO of Emblem. “We have been very impressed with the Natura leadership team, their cultivation capabilities, and the quality of production they are achieving within their Phase 1 retrofit. Emblem has found a valuable partner in Natura and we are confident our relationship will continue to strengthen and grow as Natura completes Phase 2 of their retrofit, bringing online an additional 55,000 kgs of production in 2019.”

Terms

According to the company statement, Emblem will invest $3,000,000 in cash in Natura for 3,750,000 common shares of Natura and 3,750,000 common share purchase warrants exercisable at $1.05 for 24 months (subject to acceleration provisions). Post-closing, Emblem will own approximately 5% of Natura’s outstanding shares on a non-diluted basis, and 7% on a fully diluted basis.

Natura

Natura is based in Leamington, Ontario. The first 155,000 square feet of the facility is currently being converted as part of its Phase 1 retrofit and is expected to be complete in August 2018 and capable of producing 15,000kg of cannabis per year. The Phase 2 conversion will retrofit the remaining 507,000 square feet for cannabis cultivation and is expected to bring total production capacity to approximately 70,000kg per year by mid-2019. Natura holds a genetic library of 32 cannabis strains, which will be made available to Emblem.

Debra BorchardtJuly 5, 2018

Several cannabis companies announced signing agreements with the Alberta Gaming, Liquor & Cannabis Commission (AGLC) to supply recreational cannabis to Alberta’s private cannabis retailers and the AGLC’s online cannabis store, www.albertacannabis.org.

Alberta is Canada’s fourth most populated province and is mostly known as being the home to tourist destinations like Banff Park and Lake Louise. Its capital is Edmonton and its largest city is Calgary. The province is known as being a hub for the country’s crude oil industry.

“The AGLC is committed to providing the Alberta market with access to federally regulated cannabis in a safe and fiscally-responsible manner while helping to shrink the illicit market,” says Niaz Nejad, Chief Operating Officer, and Vice President, Gaming & Cannabis, AGLC. “We are confident that those we are working with will help us fulfill our responsibilities to Albertans.”

Aurora Cannabis Inc.

Edmonton-based Aurora Cannabis Inc. (ACBFF) said that it will initially allocate up to 25,000 kg of product for the first 6 months of sales to this market. “The AGLC and Alberta government have been steadfast in their commitment to developing the best possible framework for a well-functioning legal adult consumer use market that prevents cannabis from ending up in the hands of youth,” said Terry Booth, CEO. “The province’s common-sense approach and this agreement are the result of many months of discussions with the AGLC towards achieving these goals. Consequently, adult consumers in Alberta will have access to a broad selection of high-quality cannabis products from October 17, 2018, onward.”

He went on to say, “Aurora already is the pre-eminent provider of medical cannabis in Alberta, with a dominant market share, serving more Alberta patients than any other licensed producer. Aurora also employs more Albertans than all other licensed producers combined. We have a brand recognized for quality, which we intend to leverage to capture a significant share of the adult consumer market in Alberta and Canada, both organically and through our strategic retail partnerships. We look forward to working with the AGLC and becoming a key part of the province’s cannabis infrastructure to ensure Alberta’s successful entry into the burgeoning consumer cannabis market.”

Aphria Inc.

Aphria Inc. (APHQF) said that the AGLC placed an opening order of 870 kg to be supplied from across the full portfolio of Aphria’s adult-use brands and products, including dried flower, pre-rolls and cannabis oils. Once additional product categories, such as vapes and edibles, are authorized under the Cannabis Act, it is anticipated that they will also be made for sale throughout the province, further enhancing the company’s assortment of offerings in this market.

“We are thrilled to be working with such a strong partner that is equally committed to promoting responsible cannabis use,” said Jakob Ripshtein, Chief Commercial Officer at Aphria. “This important agreement enables Aphria’s adult-use brands to have a strong presence in Alberta’s dynamic retail landscape. Through our partnership with the AGLC, we look forward to providing access to our thoughtfully crafted portfolio of brands that were designed to meet the diverse needs of Alberta consumers.”

Organigram Holdings Inc.

Organigram Holdings Inc. (OGRMF) also announced that it signed a supply agreement with the AGLC adding to the other three provinces that company has made deals with. Organigram recently unveiled its preliminary branding strategy for the adult recreational market in Canada featuring the brands The Edison Cannabis Company, ANKR Organics and Trailer Park Buds.

“We are pleased to finalize this agreement with AGLC,” says Greg Engel, Organigram’s Chief Executive Officer. “We applaud the province’s efforts to secure a high-quality, dependable inventory for their recreational cannabis market and are proud to have been selected as an AGLC partner.”

Emblem Corp.

Emblem Corp. (EMMBF) also signed an agreement to supply the province with high-quality cannabis products. Products will be available under Emblem’s new adult-use focused brand, which is expected to be announced shortly.

“Emblem is excited to have been selected to bring our adult-use products to Alberta’s recreational cannabis market upon legalization on October 17, 2018. We are looking forward to working together with the AGLC to build the foundation for a safe and responsible marketplace for consumers,” said Maria Guest, Chief Marketing Officer with Emblem. “With our soon to be announced adult-use cannabis brand, Emblem is ready to meet the needs of Albertans seeking a trusted source of cannabis products, offering a curated range of dried flower and cannabis oils.”

WeedMD Inc.

WeedMD (WDDMF) said it will supply the Alberta market with cannabis products starting the first day of legal sales. The agreement represents a key milestone in WeedMD’s strategic plan to develop a national distribution platform for the company’s medical and adult-use products, building upon the recent announcement of WeedMD’s supply agreement with Shoppers Drug Mart.

“We’re proud that the AGLC has selected WeedMD as a cannabis supplier to join its network as it looks to establish a cannabis framework for its adult-use markets,” said Keith Merker, Chief Financial Officer of WeedMD. “This represents a strategic partnership as we look to expand our product reach across the country to support Canada’s legal adult-use market. Alberta’s high standards align with the highly-regarded quality of our cultivation standards, product portfolio, and commercial practices as we look to meet the expected demand of this new market.”

The Supreme Cannabis Company, Inc.

The Supreme Cannabis Company, Inc. (SPRWF) said that its wholly-owned subsidiary, 7ACRES, had entered into a supply agreement with the AGLC to supply recreational cannabis upon legalization. Supreme said that the AGLC has communicated that they plan to evaluate product demand of the recreational market in order to inform their supply needs for the remainder of the year.

“We are very excited to serve as a trusted partner to the AGLC and Albertans. Alberta offers a unique opportunity for quality-driven brands as it is one of the most sophisticated private retail markets in the country and its approach to retailing cannabis recognizes that ensuring quality and offering a selection of products are critical steps towards impacting the illicit market,” said John Fowler, CEO of Supreme Cannabis. “Supreme Cannabis anticipates broad provincial acceptance that 7ACRES’ lineup is a premium brand, and as such will be ranked as a top-tier product in their stores.”

Debra BorchardtMay 29, 2018

It’s time for your Daily Hit of cannabis news for May 29, 2018.