financial Archives - Green Market Report

Kaitlin DomangueJune 3, 2021
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It’s time for your Daily Hit of cannabis financial news for June 3rd, 2021. 

On the Site

Executive Spotlight: Kathryn Blackwell

Kathryn Blackwell is the Co-Founder and CEO of The Open Dør, a national cannabis retail franchise headquartered in Scottsdale, Arizona. 

Since establishing The Open Dør in 2020, Kathryn has integrated proven franchise strategies and merchandising practices into the dispensary brand to deliver a modern aesthetic and transform the consumer experience. 

RIV Capital Stays On Path To Crossover To U.S. Cannabis

RIV Capital Inc. (TSX: RIV) (OTC: CNPOF) released its financial results for the fourth quarter and fiscal year ended March 31, 2021, which proved to be a very transitional period for the company. 

Riv sold certain financial assets to Canopy Growth for $118.4 million in cash in February, as well as 3.65 million common shares of Canopy Growth and other aggregate forms of payment. 

Eddie Lucarelli, Chief Financial Officer, said, “With the CGC Transaction complete and the PharmHouse Credit Facility fully settled, our rejuvenated balance sheet puts us in an advantageous position to capitalize on the growing momentum in the U.S. cannabis market.”

Silo To Create Mushroom Stores In Jamaica

Silo Wellness Inc. (CSE: SILO) has signed a letter of intent with Canadian-based mushroom company Mushe Inc. to create the first legal functional and psychedelic mushroom retail outlet based in Jamaica. 

Silo Wellness currently cultivates psilocybin mushrooms, conducts psychedelic wellness retreats, and is testing a proof-of-concept patent-pending nasal spray.

Empower Clinics Adds Diabetes To Clinic Portfolio

Empower Clinics Inc. (CSE: CBDT) (OTCQB: EPWCF) is buying Medi + Sure Canada Inc. also called Medisure, a leading Canadian manufacturer of medical devices for patients managing diabetes in a deal valued at $3.5 million. 

Last year, Empower created a subsidiary company dedicated to the advancement of psilocybin research and patient care, addressing the significant mental health issues of anxiety, depression, post-traumatic stress disorder (PTSD), and addiction.

In Other News

Zynerba Announces Results of Study Exploring Cannabinoid Therapy for Autism Spectrum Disorder

Cannabinoid pharmaceuticals company, Zynerba Pharmaceuticals, announced their presentation of efficacy and safety findings in children and adolescents with Autism Spectrum Disorder. 

“The previously disclosed data from these three studies provide evidence of the potential for Zygel [the cannabinoid product studied) to have a clinically meaningful impact on a variety of endpoints associated with ASD and related disorders,” said Joseph M. Palumbo, M.D., LFAPA, MACPsych, Chief Medical Officer of Zynerba. “Should these findings be confirmed in additional trials, we believe Zygel has the potential of being a new and differentiated therapeutic option for these patient communities.”

Cannabics Pharmaceuticals Launches Program for Cancer Treatment Research 

Gabriel Yariv, Cannabics Pharmaceuticals President and COO, said: “We have successfully completed a series of preclinical experiments in our in-house research facilities and have identified promising antitumor results on Breast Cancer cell lines. Based on these encouraging results, we now plan further research aimed at developing a new drug candidate for the treatment of Breast Cancer.”

This announcement comes shortly after the launch of a similar treatment program for melanoma. 

Jay-Z’s Company Invests in First Black Woman-Owned Speakeasy 

Jay-Z’s company, TPCO Holding Corp., aka The Parent Company, has chosen Josephine & Billie’s to be its first social equity corporate venture fund investment. 

The speakeasy-style storefront will be a private cannabis consumption lounge, exclusive to BIPOC women and allies. 


Kaitlin DomangueApril 15, 2021
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Cannabis data and analytics company, Headset, announced the launch of a report highlighting a long-term forecast into the U.S. and Canadian cannabis markets! Specifically, forecasting the sales, sales volume, and market shares for 2021 and 2022 compared to 2020. 

The cannabis industry during 2020

The cannabis industry held their breath last year when COVID-19 hit. We fully expected to see a dramatic impact on businesses, and at our worst: expected to get shut down and deemed non-essential. For the most part, that didn’t happen and many local governments declared cannabis businesses to be essential. We collectively breathed a sigh of relief, but many physical storefronts were damaged in some of the riots over the summer, forcing some stores to close briefly. Despite that, the industry trudged forward and kept it moving, seeing the end of 2020 and welcoming a hopefully very different 2021. 

Headset’s methodology for this report

Headset says: “These forecasts will include all 13 Canadian provinces and territories and 36 US states* with any level of legalization and across all markets (recreational and medical), and the data will be presented in the aggregate for each calendar year. Typically, Headset only forecasts one forward looking month at a time and in this new framework, forward looking forecasts will cover at minimum five quarters (15 months) and at maximum eight quarters (24 months).” The numbers take New Jersey, New Mexico, and New York’s new legalization into account. 

The data estimates the U.S. cannabis market to reach $23 billion in sales by 2022. Canada’s market is expected to grow twice as fast as the American market from 2020 to 2021, and nearly three times faster from 2021 to 2022. Headset predicts Canada’s annual sales to grow 54.6% in 2021 and 31.9% in 2022. The United States is predicted to see a 23% growth rate in 2021 and 24.4% growth in 2022. Canada’s cannabis market is expected to hit $4 billion in sales in 2022, so significantly lower than the U.S. market, but nonetheless on an incredibly fast-paced rate of growth. Check out the predicted (and last year’s) sales volume in both countries: 

2020

U.S.: $18,504 million 

Canada: $2,624 million 

 

2021 

U.S.: $22,751 million

Canada: $4,057 million 

 

2022

U.S.: $28,308 million 

Canada: $5,351

Per usual, flower is expected to dominate future markets and did dominate 2020’s market. 

  • Flower accounts for a majority of total annual sales, reaching $11 billion and $12 billion in 2021 and 2022 respectively. 
  • Despite flower’s consistent popularity in both markets, edibles, vapor pens, and concentrates hold more market shares than flower in 2020, 2021, and 2022
  • Edibles and concentrates are expected to have larger market shares (at the expense of flower and pre-rolls) in 2022
  • Pre-roll sales are expected to contribute to 20% of Canada’s total sales volume growth in 2022, making for a 2% increase from the prior year 

Tinctures, topicals, capsules, and beverages are consistently among the categories with the lowest sales in both markets, but still accumulating millions of dollars each year and in some cases, sharply rising. 

Category shares for both markets

The report also goes into detail about market shares by category, specifically sales and sales volume. Here are the top performing categories (roughly) in order, it changes depending on country and the year, but all five are consistently at the top:

  1. Flower
  2. Pre-rolls
  3. Vape Pens
  4. Edibles
  5. Concentrates 

Download Headset’s report here


Kaitlin DomangueMarch 2, 2021
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Canadian cannabis retailer, High Tide Inc., (TSXV: HITI) (OTCQB: HITIF), announced their Q4 earnings yesterday for 2020. Despite the curveballs 2020 threw, High Tide landed on top, and reported a 118% increase in revenue bringing the total to $24.9 million for the fourth quarter. The revenue increase accounted for a 166% year-over-year growth, and brought the year’s total earnings to $83.3 million. 

High Tide’s revenue by geographic location

  • $20.6 million of total company revenue was earned in Canada in Q4
  • $4.1 million of total revenue was earned in the United States in Q4
  • $0.2 million of total revenue was internationally in Q4

 

  • $68.4 million of total revenue was earned in Canada in fiscal year 2020
  • $14.3 million of total revenue was earned in the United States in fiscal year 2020
  • $0.6 million of total revenue was earned internationally in fiscal year 2020

High Tide’s gross profit increased by 112%

The company’s gross profit increased by 112% to reach $8.7 million in the fourth quarter of 2020, and 172% to $30.8 million for the year. The company’s CEO and President, Raj Grover, said 2020 was their best year yet. “Despite the global slump in retail sales associated with the pandemic, and thanks to the tireless efforts of our team, we closed the year with approximately $8 million in Adjusted EBITDA making 2020 the best year in High Tide’s history,” said Raj Grover, President and Chief Executive Officer. High Tide’s Adjusted EBITDA for the fourth quarter was $3.6 million, and the $8 million represents the fiscal year ended October 31st, 2020. 

High Tide’s cash on hand

The company reported $7.5 million cash on hand as of October 31st, 2020, and a significant cash balance increase to approximately $38 million as of today. 

Revenue segments

  • $22.6 million in total revenue was generated by retail in Q4
  • $2.2 million in total revenue was generated by wholesale in Q4 
  • An immaterial amount by corporate was generated in Q4

 

  • $75 million in total revenue was generated by retail in fiscal year 2020
  • $7.9 million in total revenue was generated by wholesale in fiscal year 2020
  • $0.4 million in total revenue was generated by corporate in fiscal year 2020 

These figures compare to $24 million, $6.69 million, and $0.6 million, respectively, for the previous year.

More thoughts from High Tide’s CEO 

“We continued to run our operations tightly, ending the year off with the record levels of revenue and Adjusted EBITDA.,” said Grover. “We are excited about our trajectory in the United States and continue to prioritize and look for opportunities in that market. Our integrated value chain which includes Cannabis Bricks & Mortar stores, e-commerce platforms for consumption accessories and hemp derived CBD products, along with manufacturing and distribution of licensed and proprietary consumption accessories, experienced sizable growth on all fronts. We plan to continue to further strengthen our chain through organic growth and strategic acquisitions creating even more value for our shareholders.  Since the end of the fiscal year, we have already nearly doubled our size in Canada with the closing of the META Growth acquisition. For the fiscal first quarter of 2021 we expect to report revenue in the range of $37 million to $38 million.”

Operational highlights

In addition to monetary achievements, High Tide made some operational moves last year to set the company up for success in 2021 and beyond. 

  • Canna Cabana (High Tides retailer) opens location in tourist destination Banff, Alberta in August
  • META shareholders overwhelmingly approve High Tide’s acquisition of META Growth Corp. (META. V) in October 2020
  • Over 50% of the company’s brick-and-mortar revenue came from Cabana Club members, emphasizing the brand’s value 

Additional Events

  • High Tides entered a loan agreement for $6.75 million ending on December 31st, 2024 of an undrawn balance on a $20 million credit facility, which was obtained through the acquisition of META
  • Approximately $29 million worth of company debt was converted into common shares after October 31st, 2020
  • Company common shares moved up to the TSX Venture Exchange
  • The company submitted an initial application to be listed on the NASDAQ 
  • High Tides closed on an unsubscribed bought deal equity financing, gross proceeds $23 million 
  • All branded locations have remained operational throughout the COVID-19 crisis, despite difficult issues facing Canada. 

Kaitlin DomangueFebruary 6, 2020
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It’s time for your Daily Hit of cannabis financial news for February 6th, 2020. 

On the Site

Planet 13 Cafe Is Paying Off As Sales Stay Strong

 

Las Vegas-based cannabis dispensary Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) reported record-breaking January sales driven by strong traffic and attributed it to the company’s newly opened cafe and event space. The company said that the average ticket size was approximately $100. Planet 13 said that January revenue was ~10% higher than the seasonally slow months of November and December.

CBD Craze Sparks ‘Weed Washing’ Trend

 

Remember the term ‘pinkwashing’? Where companies slapped a pink ribbon on just about anything and claimed to be donating lots of money to breast cancer research? It’s happening again, but this time it’s in the cannabis industry.

“Weed washing” is a disturbing trend that appears to be most dominant in the beauty industry and refers to the act of adding hemp oil that does not contain CBD or only contains a minuscule, non-therapeutic amount to a product in order to capitalize on CBD’s popularity and high price point. 

Psychedelic Clinic Company Field Trip Raises $8.5 Million

 

Psychedelic clinic company Field Trip Psychedelics Inc. closed its oversubscribed Series A financing round. The financing, which was completed through a private placement, raised $8.5 million for the company.

The company said the funds will be used to execute the initial stages of Field Trip’s strategic plan to build out the world’s first network of medical centers focused exclusively on psychedelic-enhanced psychotherapy. In addition to that, the financing will help fund the final construction of its research and cultivation facility at the University of the West Indies in Jamaica. 

South Carolina Kicks Off Hemp Farming Season

 

The South Carolina Department of Agriculture (SCDA) said that it will begin accepting applications for hemp farming, handling and processing permits for the 2020 growing season starting Feb. 1, 2020. Now in its third year, South Carolina’s hemp farming program has grown from 20 farmers in 2018 to 114 permitted farmers and 43 processors at the end of the 2019 season. 

Requirements to receive a hemp farming permit include:

  • Proof of South Carolina residency
  • Criminal background check
  • $100 nonrefundable application fee and $1,000 permit fee
  • GPS coordinates of all locations on which hemp will be grown
  • Attending an SCDA orientation and signing a Hemp Farming Agreement prior to possessing any hemp, including clones and seeds

In Other News

Aurora Cannabis Appoints Two New Independent Directors

 

Lance Friedmann and Michael Detlefsen have been appointed as two new directors for the Canadian cannabis company, Aurora Cannabis. The two have held roles with Kraft Foods and Pomegranate Capital Advisors, respectively. 

Aurora Cannabis Executive Chairman and Interim CEO Michael Singer stated, “We are pleased to welcome Lance Friedmann and Michael Detlefsen as independent members to the board at this critical time in our transformation. We expect to see cannabinoids grow as a category in consumer products and believe their depth of experience and strong track records of successful brand development and operational business transformation will provide helpful insights to our executive team. With the addition of Messrs. Friedmann and Detlefsen, Aurora has expanded its Board, independent directors.”

KushCo Holdings Announces $16 Million Registered Direct Offering

 

KushCo Holdings has announced its entrance to a definitive agreement with investors purchasing stock in the company. The agreement includes 10,000,000 units, with each unit representing one share of common stock. The transaction was set for $0.001 per share, and a warrant to purchase half a share of common stock, at an offering price of $1.60 per unit, pursuant to a registered direct offering.


Kaitlin DomangueJanuary 28, 2020
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Its time for your Daily Hit of cannabis financial news for January 28th, 2020. 

 

On the Site

 

Emerald Using Shares to Pay Bills

Canadian cannabis company Emerald Health Therapeutics (TSXV: EMH; OTCQX: EMHTF) had entered into a shares for debt transaction with Emerald Health Sciences, a control person for the former company. Presently, Emerald carries an aggregate debt of $2,816,963. The company will settle $794,182 owed to Sciences, as well as $2,022,781 owed pursuant to trades payable. Emerald Health Therapeutics will also issue 9,713,666 common shares of Emerald to Sciences at $0.29 per share.

 

TerrAscend Names Ackerman as Interim CEO, Ends Gravitas Deal 

TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF) has named the company’s Executive Chairman Jason Ackerman as the interim CEO, replacing the current CEO Michael Nashat.

Just yesterday, TerrAscend terminated its decision to acquire Gravitas Nevada Ltd. which operates a retail cannabis dispensary in Las Vegas, Nevada under the trade name “The Apothecarium.”

 

2020 Promises Greener Pastures for Cannabis Legislation

More than 75% of the United States of America have legalized (and decriminalized) Cannabis use. Whether that use is in the form of CBD, restricted to medicinal use, or completely without consequence, America’s legislation is changing rapidly.

The new decade started with Illinois celebrating its June 2019 legalization victory and now, New Mexico is following suit. New Mexico’s governor is currently pushing legalization. US News reported on the turn of the decade, there is strong legislative evidence five more states are rolling toward legalization before 2020 comes to a close.

 

In Other News

Vireo Health Expands Partnership With Leaf Trade

Physician-led, science focused cannabis company Vireo Health (CNSX: VREO, OTCQX: VREOF) announced the expansion of the company’s partnership with Leaf Trade. The partnership will provide a wholesale order and fulfillment management platform in four states where Vireo operates.


Kaitlin DomangueJanuary 27, 2020
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Sunniva (OTCMKTS: SNNVF), a Canadian cannabis company announced the closing of wholly-owned subsidiary Full-Scale Distributors, LLC set to take place in February 2020. 

“The closing of FSD is a necessary step that will eliminate the cash outlay required to operate that business,” said Dr. Anthony Holler, Chairman & CEO of Sunniva Inc. “We continue to focus on the preservation of our available funds to allow us to actively defend Sunniva’s rights under the previously disclosed dispute related to the Build to Suit Lease of the Cathedral City Glasshouse.”

Cannabis companies that are strapped for cash not have the option of filing for bankruptcy. According to bankrupt stock expert, Rick Szambel, “Currently under U.S. Bankruptcy Law companies that are engaged in a business or product not legal under Federal Law may not use the U.S. Bankruptcy Code for protection in reorganizing their debt or centralize their assets for sale. Federal Law considers marijuana an illegal substance and U.S. Trustee who is part of the Department of Justice has aggressively blocked companies in the marijuana industry, employees, and even landlords from filing Chapter 7 or 11, often forcing companies to wind down at a state level.”

This is not the first time the company has been in hot water. Last year, the company and one of its subsidiaries were named in a lawsuit for failure to repay a loan. Green Market Report previously reported “Sunniva, through its subsidiary 116, entered into a $3.4 million mortgage to finance the purchase of land for the greenhouse facility in Okanagan Falls, British Columbia,” according to the company’s November financial statement. Also included in the statement was the acknowledgment the company had paid $400,000 of their loan as of September 30th, 2019 but they were in default on the remaining balance. The company’s stock also fell significantly in November following the resignation of its CFO and president.


Debra BorchardtOctober 13, 2017
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Canadian-based Aphria Inc. (APHQF) delivered a solid first quarter as revenues and gross profits rose over last year’s numbers. The low-cost producer reported that revenues for its first quarter ending August 31 were C$6.1 million a 7% increase over last year’s C$4.3 million for the same time period. Gross profits rose to C$7.9 million from last year’s C$3.7 million for the same time period.

The company sold 852 kilograms for the first quarter, which topped last year’s 738 kilograms. More importantly, the cash cost to produce dried cannabis fell 14.4% to 95 cents from the previous year’s C$1.11. The “all-in” costs to produce dried cannabis fell from C$1.67 to C$1.60 as the economies of scale kicked in when the company expanded operations.

“A key driver of our continued performance has been our ability to maintain leadership as one of the lowest-cost producers in the industry,” said Vic Neufeld, Chief Executive Officer at Aphria. “As legal recreational cannabis comes into the market in 2018, low costs per gram will be a critical factor for the entire supply chain. Our proven ability to grow to scale while keeping costs low is an important competitive advantage; it positions Aphria to profitably meet projected demand for cannabis and deliver sustainable value to our shareholders.”

The company noted that it was the first harvest and first sale of product that had flowered exclusively in the new facility expansion. Aphira also said in the release that construction on the next phases of expansion was progressing as scheduled with sales from the Part III expansion expected in late May 2018. Sales from the Part IV expansion are expected in mid-to-late January 2019.

Neufeld added, “Looking ahead, we are on track to meet critical short- and long-term goals: Our fully-funded facility expansion is well underway, and we expect to achieve further economies of scale once the expansion projects are completed in 2018.”

Net income from the quarter was C$15 million or eleven cents per share versus last year’s C$900,000 or one cent per share for the same period and beating the previous quarter’s loss of C$2.6 million. The increase was attributed to net gains on the company’s strategic investment portfolio. The company’s statement read, “The largest increases in the strategic investment portfolio relate to the increase in fair value of the Company’s investment in Copperstate Farms Investors, LLC and the increase in the value of the Company investment in its equity accounted investee, Liberty Health Sciences, Ltd.  The largest offsetting decrease in the strategic investment portfolio was the Company’s share of its equity accounted investee’s, Liberty’s, net loss for the quarter.  The Company’s share was $8.8 million, with the vast majority of the loss ($8.4 million) relating to Liberty’s listing fees as part of its reverse takeover, go public, transaction.”


StaffSeptember 28, 2017
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Canadian company Invictus MD Strategies Corp. (IVITF) announced its financial results for the quarter ended July 31, 2017. However, the press release mentioned nothing of sales figures and cost of sales. This required a jump over to Sedar to find out the details of the quarter. Sales for the quarter were C$566,431, which was only slightly higher than last year’s C$559,123. For the six months ending July 31, 2017, sales fell to $1.1 million from last year’s C$1.4 million for the same time period. The cost of sales jumped to C$477,599 for the quarter, also up over last year’s C$156,119. It was the same picture for the six months with the cost of sales popping to C$909,016 from C$504,921.

The cost of sales jumped to C$477,599 for the quarter, also up over last year’s C$156,119. It was the same picture for the six months with the cost of sales popping to C$909,016 from C$504,921.

Net losses jumped to C$2.5 million over last year’s losses of C$733,708 with the six-month net loss a whopping C$8.6 million over last year’s C$858,316 for the same time period. Instead, the company noted in its press release that foundations have been poured for the new facility at Acreage Pharms and that the facility is expected to be completed in January of 2018. Invictus has 80,000 grams of dried cannabis waiting for the company to get its sales license. While the losses may be mounting, the company said it had C$28 million in cash and C$30 million in working capital and looks to be able to easily hold onto until the product can be sold and facilities expanded.

“Invictus MD’s journey has been defined by its agility, innovation and disciplined execution of our business strategy, achieving progressive growth in its production facilities and shareholder value,” said Dan Kriznic, Chairman & CEO, of Invictus MD. “The company’s balance sheet is very strong; it has minimal debt and working capital of $30.75 million. The approximate $28 million cash in the treasury has been reserved to expand its canopy footprint on its 250 acres of property and produce 15,000 kg per annum making it one of the top producers under the ACMPR. This production is needed to meet the significant demand for high-quality, standardized, pesticide-free product, not only for the existing medical market but also to accommodate the recreational market that will commence mid next year.”

Invictus stock on the OTC was lifted by 4% on the news and was lately trading at 97 cents. This is at the mid-point of the 52-week range which is 49 cents to $1.63.


Paula CollinsSeptember 5, 2017
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Soon after your opening launch celebrations, you face the grim realities of your first tax return as a Cannabis business owner. (Cue Death Star music.)

Section 280E of the tax code states that “No deduction or credit shall be allowed” for businesses that are prohibited by Federal law. Section 280E explicitly mentions businesses that deal in “trafficking” substances that fall under Schedule I and Schedule II of the Controlled Substances Act.

This is potentially devastating for cannabis businesses, and raises the effective tax rate of a retail or production business to 70%, up from what should be in the neighborhood of 30%. That’s based on a business with $1,000,000 gross receipts, cost of goods sold (COGS) of $650,000, with as much as $200,000 in allowable deductions for a non-cannabis business and $0 allowable deduction for the cannabis business. In that scenario, the non-cannabis business will pay tax on $150,000 of income after deductions, while the cannabis business will pay tax on $350,000 of income after deductions, despite the fact that their COGS were the same, dollar-for-dollar.

Four Easy Ways to Save 40% on Your Tax Bill Every Quarter

  1. Establish a second business for every operation that is not directly related to your cannabis inventory. Name it and claim it. Have one business that is just the cannabis business. If you are a retail cannabis business, the only activity in that business will be the buying and selling of your product. If you are a production business (grower or producer), keep at least one other item in your line that is not cannabis related so that you can handle the tax consequences of §280E. Keep inventory lists separate, according to the differentiated revenue streams. In a retail operation, branded items, other health or wellness products, accessories, and accoutrements — these can be inventoried and their associated costs can be deductible. For example, if you have a dispensary, but you also sell glassware or cleaning products, keep those in a separate business. Voila! You now have deductions that you can claim! Most of your rent, utilities, and marketing of anything not expressly cannabis – entirely legal deductions.
  2. Document each and every item separately. Many cannabis businesses make the mistake of thinking, “What’s the use of keeping books if I can’t claim deductions?” Big mistake! If you receive goods from a supplier, make sure you have them ship the cannabis products separate from any other goods you may acquire from them. Doing so will create a fool-proof way to trace expenses that are solely related to cannabis, and help your other deductions survive the scrutiny of an audit.
  3. Micro-manage the tasks that your staff performs while on the clock. If you are a producer, your employee spends a great deal of time with tasks such as checking timers on lights, running water lines, locking and unlocking cabinets, running spreadsheets, cleaning work tables. If, out of one hour, that employee spends 45 minutes with hands off of the cannabis products and you can document it, you have just found a way to claim 45 minutes of that employee’s time on your taxes. Document these tasks, minute-by-minute. Score! You’ve just made the majority of your employees’ wages deductible. Now take it one step further and cut checks from two separate businesses each pay period for your employees. They will still be making the same hourly wage, but it will come from two separate business entities.
  4. Pay yourself a bigger salary in your non-cannabis business than in your cannabis business. You ARE paying yourself, through your business, right? Being in business is a big time commitment; avoid burnout and personal detriment by paying yourself a sustainable salary. As CEO, Manager, Founder, or whatever your title might be, cut yourself a bigger check from the non-cannabis business than you do from the cannabis business. Go ahead. Be aggressive with this. If you have structured the two businesses so that the cannabis-inventory-based business is only 10-20% of the total enterprise activity, you can get away with paying yourself 80-90% of your salary from the non-cannabis business, and the remaining 10-20% of your salary from the cannabis business.

Debra BorchardtAugust 31, 2017
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Toronto-based Golden Leaf Holdings (GLDFF) reported its second quarter earnings on Tuesday with net revenue falling to $2.1 million from $2.5 million for the same time period in 2016. The 9% decline was blamed on supply constraints across the company’s portfolio.

The net loss for the second quarter was $1.7 million, which was higher than last year’s loss of $1.1 million for the same time period. Gross profits improved to $402,124 from last year’s $217,300.

“It is a key corporate objective for Golden Leaf to establish a greater retail presence, driven by the acquisition of Chalice Farms. We expect this will deliver higher operating margins for the Company, as well as from a proven, retail-focused operating blueprint to successfully broaden Golden Leaf’s market share and to capitalize on the substantial growth opportunity that lies before us,” said Mr. William Simpson, the new Chief Executive Officer of Golden Leaf. “To kick start our strategic plan, we undertook a comprehensive review of the business to identify opportunities to streamline costs. Already, we have made reductions to the work force and have made progress toward consolidating all corporate and commercial operations to Portland, Oregon. These steps are expected to improve our cost structure while maintaining the capacity to support our core expansion strategy.”

Golden Leaf is consolidating its headquarters to Chalice Farms in Portland OR and constructing a processing facility. Three dispensaries are under construction in Oregon and should be opened in the first quarter of 2018. In Nevada, Golden Leaf expects to begin sales of its cannabis brands to dispensaries in Nevada before the end of 2017. In Canada, the company expects to close on the acquisition of MMGC by the end of the third quarter and begin to grow operations shortly thereafter. It expects to launch retail operations in Canada in the second quarter of 2018.

As a result of all these acquisitions, operating expenses jumped to $3 million from last year’s $2.5 million. This month Golden Leaf entered into a private placement transaction with Canaccord Genuity for C$10 million and C$2 million in bridge loan financing.


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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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