Green Growth Brands Archives - Green Market Report

William SumnerWilliam SumnerJune 4, 2019
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4min1230

It’s time for your Daily Hit of cannabis financial news for June 4, 2019.

On the Site

FDA Holds Public Hearing on Regulating CBD

Last week, the U.S. Food and Drug Administration (FDA) held its first public hearing on regulating cannabidiol (CBD). Over the last several years, CBD has been growing in popularity as a health and wellness product. That popularity has only been amplified by the passage of the 2018 Farm Bill, which removed hemp and hemp-derived products (CBD included) from the federal government’s list of controlled substances. At stake in these hearings is a potentially billion-dollar market. According to Brightfield Group, the CBD market could grow to as high as $22 billion by 2022.

Green Growth Brands

Green Growth Brands, Inc. (GGB.CN) (GGBXF) has announced that it has executed an arm’s length definitive agreement to acquire all issued and outstanding shares of Spring Oaks Greenhouses (Spring Oaks) for approximately $54.6 million. Spring Oaks is a licensed medical cannabis provider in the state of Florida.

In Other News

DionyMed Brands

DionyMed Brands Inc. (CSE: DYME) (OTCQB: DYMEF) has announced its financial results for the quarter ending on March 31, 2019. Quarter-over-quarter, revenue rose from $5.5 million to $14.4 million. Adjusted EBITDA was a loss of $6 million, which the company attributes to increasing platform costs to support its continued growth activities. The net loss for the period was $1.03 million. “Our continued growth, both financial and operational, is a direct result of our ability to deliver today’s leading cannabis brands to consumers through the industry’s most efficient cannabis brands platform. Our first quarter financial results demonstrate the success of our efforts to scale our Direct-to-Consumer and retail distribution businesses through organic growth initiatives,” said DionyMed CEO Edward Fields.

Fire & Flower

Fire & Flower Holdings Corp. (TSXV:FAF) announced that it has entered into a letter of engagement with Eight Capital, pursuant to which Eight Capital and GMP Securities L.P. will purchase, as co-lead underwriters and joint bookrunners, 15 million convertible debenture units of the company for $15 million. A single unit consists of one $1,000 principal amount unsecured convertible debenture and 278 common share purchase warrants. Each warrant entitles the holder to purchase one common share of the company, for up to 24 months following the closing period, at a price of $1.45 per share. The company will use the proceeds from the offering for working capital and general corporate purposes.


William SumnerWilliam SumnerJune 4, 2019
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3min3280

Green Growth Brands, Inc. (GGB.CN) (GGBXF) has announced that it has executed an arm’s length definitive agreement to acquire all issued and outstanding shares of Spring Oaks Greenhouses (Spring Oaks) for approximately $54.6 million. Spring Oaks is a licensed medical cannabis provider in the state of Florida.

“Entering Florida through the Spring Oaks acquisition will be a great addition to our existing MSO presence in Nevada and Massachusetts , as well as to our CBD business that already has a national presence,” said Green Growth Brands CEO, Peter Horvath . “We admire several of the existing operators in the state and Florida is a special market, with favorable financials implications for the best operators. We look forward to quickly scaling our operations in the state and bringing our expertise to every patient.”

Provided that the acquisition goes through, Green Growth would be able to produce, process, and dispense medical cannabis in Florida. The license, which Spring Oaks recently acquired last April, would also permit the company to open 35 medical cannabis dispensaries. If the state’s patient registry exceeds 300,000 patients, that number would rise to 40 dispensaries.

Under the agreement, Green Growth would pay roughly $26.15 million in cash, another $17.1 million in common shares of the company (at a price of $2.35 per share), and another $11.4 million in the form of a convertible secured promissory note. The note would mature 12 months following the closing date. The acquisition is expected to close sometime around August 2019, pending regulatory approval.

In addition to this agreement, the company also announced that it had terminated its definitive agreement with ZLJT LLC and Arizona Natural Pain Solutions to acquire the dispensary chain, Desert Rose. Horvath noted that while Desert Rose is a well-run operation, the company is making a strategic decision to invest its resources into the Florida market, where they believe they can attain greater success and brand recognition.


William SumnerWilliam SumnerMay 16, 2019
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7min2470

It’s time for your Daily Hit of cannabis financial news for May 16, 2019.

On the Site

Supreme Cannabis

The Supreme Cannabis Company, Inc. (TSX: FIRE) (OTCQX: SPRWF) is acquiring Canadian-based Blissco Cannabis Corp. (CSE: BLIS) (OTCQB: HSTRF) in an all-stock deal valued at C$48 million. Supreme would be buying all of Blissco’s stock. Blissco Cannabis is a Canadian wellness cannabis brand based in British Columbia and a multi-licensed processor, cultivator, and distributor of premium cannabis.

SOL Global

SOL Global Investments Corp.  (CSE: SOL) (OTCQB: SOLCF) has entered into letters of intent to acquire California-based ECD, Inc., which operates as Northern Emeralds in a deal valued at $120 million. The purchase price will be satisfied by the issuance of common shares in CannCure Investments Inc. and the deal is expected to close on or before August 1.

United Australia- A National Push for Medicinal Cannabis

In recent years, there has been a colossal national push by both the Australian public and the medical industry for the Australian government to recognize and support the numerous medical benefits offered by medicinal cannabis therapy.

In Other News

Elev8 Brands

Elev8 Brands, Inc. (OTCMKTS: VATE) announced the release of their financial results for the first quarter of 2019. Revenue for the quarter was approximately $166,000, which is nearly half of all the revenue the company generated in 2018 ($372,000), and gross profit was roughly $126,576. The net loss for the quarter was approximately $50, 704. “This is an extremely exciting time to be in business,” said Ryan Medico, CEO of Elev8 Hemp Inc. “We are so thrilled to be where we are today and to have achieved so much. These CBD-infused beverages have become the catalyst for exponential growth this year. We are currently working with a few distributors, but our team has 11 new distributors in our sales process. As a result, it’s very likely we will see revenues double in the second quarter.”

Helix

Helix TCS, Inc. (OTCQB: HLIX) announced that they have filed their financial results for the first quarter of 2019. Revenue for the rose by 199% to $3.37 million. The gross margin was 43% ($1.45 million). “Due to the many delays in licensing and program go-lives that the industry saw in 2018, we anticipate 2019 to realize some of the massive potential of key emerging markets, such as the state of California, in addition to a plethora of new markets coming online and beginning to shape their own legal programs,” said Zachary L. Venegas, Executive Chairman and CEO of Helix TCS, Inc. “Our business strategy is built such that our revenue will continue to grow organically alongside the expansion of the industry, which we look forward to maintaining as 2019 progresses.”

Veritas

Veritas Pharma Inc. (CSE: VRT) (OTC: VRTHF) (Frankfurt: 2VP) announced that it is taking steps to restructure its wholly owned subsidiary Cannevert Therapeutics Ltd. (CTL). According to the company, the restructuring is necessary because of both permanent and temporary cutbacks of the number of staff CTL. Senior members of CTL’s research will remain with the company, and Dr. Michael Walker and Dr. Andrew Hagel will lead the restructuring.

Green Growth Brands

Green Growth Brands, Inc. (CSE: GGB) (OTCQB: GGBXF) announced that it has completed the buyback and cancellation of 27.3 million common shares of the company held by GA Opportunities Corp. for C$89 million, or roughly C$3.26 per common share. “We are pleased to have completed our buy back of the shares previously held by GA Opportunities,” said Peter Horvath, CEO of GGB.  “While we continue to focus on the rapid expansion of GGB, the opportunity to repurchase these shares well below the current market price immediately and directly increased shareholder value.”


Debra BorchardtDebra BorchardtApril 15, 2019
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6min5680

Aphria Inc. (TSX: APHA) (NYSE: APHA) reported its results, for the third quarter ending February 28, 2019. The company delivered net revenue of $73.6 million up 240% from the prior quarter and 617% from the prior year. Still, the company reported a net loss of $108 million versus last year’s net income of $12 million for the same time period.

Irwin D. Simon , Aphria’s Chairman, and Interim Chief Executive Officer said, “Our organization has experienced significant change in a very short period of time which was necessary to propel the Company forward.  Our Board of Directors and executive team will remain focused on the advancement of Aphria’s leadership position in the global cannabis industry and we are pleased to have announced today the appointment of two new independent directors.”

The Board appointed two new independent directors, effective today. Walter Robb and David Hopkinson will fill two of the three current director vacancies. Walter Robb was a former co-CEO of Whole Foods Market. David Hopkinson serves as Real Madrid Club de Futbol’s (“Real Madrid”) Global Head of Partnerships. He joined Real Madrid in August 2018 and brings his 25 years of professional sports sales, marketing and leadership experience to Aphria.

Green Growth Brands

The company issued a separate press release and said it continues to recommend that Aphria shareholders reject the Green Growth Brands (GGB) Offer and to not tender Aphria shares to the GGB Offer.

Simon said, “We plan to use the $89.0 million in proceeds from the transaction to fund our strategic global expansion initiatives. On behalf of our Board of Directors and management team, we continue to recommend that Aphria shareholders reject the GGB offer and do not tender their Aphria shares to the GGB offer.”

GGB has entered into a share purchase agreement with GA Opportunities Corp. (GAOC) pursuant to which GGB has agreed to purchase for cancellation 27.3 million shares held by GAOC, for an aggregate purchase price of $89.0 millionThe terms of the Share Purchase Agreement include, among other things, that GGB will pay in cash $50.0 million of the Purchase Price to GAOC within 30 days of the date hereof and will issue a promissory note to GAOC for $39.0 million due in six months from the Closing Date.

Aphria has entered into a shortened deposit period agreement with GGB to facilitate the acceleration of the expiry of GGB’s offer to purchase all of the issued and outstanding shares of Aphria. Aphria has agreed to reduce the initial deposit period of the bid to 92 days from January 23, 2019. GGB will be mailing a Notice of Variation providing that the GGB Offer will expire at 5:00 p.m. on April 25, 2019. Based on the closing price of $3.86 per GGB share on the Canadian Securities Exchange on April 12, 2019 , the implied consideration under the GGB Offer would be $6.07 per Aphria share, representing a significant 54.7% discount to Aphria’s closing price on the Toronto Stock Exchange of $13.41 per share on the same day.

Latin America Assets

The company had formed a Special Committee as per the Ontario Securities Commission request as part of a continuous disclosure review that the company performs an impairment test on its LATAM assets subsequent to the filing of the 2019 second quarter financial statements. The committee concluded the review and found that the acquisition of LATAM assets was within an acceptable range, albeit near the top of the range of observable valuation metrics; the company’s investment in LATAM assets is approximately $225 million , after recording the aforementioned non-cash impairment charge, which is approximately $30 million more than the original agreed purchase price of approximately $195 million.

Mr. Simon continued, “We continue to take decisive actions to increase efficiency, including investing additional capital in automation and packaging and adapting production to a new growing method. While this contributed to an increase in our costs, we expect higher future yields per square foot leading to stronger results as we start fiscal year 2020.”


Debra BorchardtDebra BorchardtFebruary 11, 2019
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3min8320

Green Growth Brands Inc. or GGB (OTCQB: GGBXF)  entered into an agreement to gain access to 108 prime shop locations in U.S. malls owned and operated by the Simon Property Group, Inc. (NYSE: SPG). GGB will expand its chain of CBD-infused personal care product shops under the Seventh Sense Botanical Therapy.

Simon is the biggest mall operator in the country with high-profile properties including Roosevelt Field in metro New York; The Galleria in Houston, TX; and Woodbury Common Premium Outlets in Central Valley, NY. While there are certainly numerous CBD shops, this is the first company to look at establishing a huge chain right off the bat.

“We are constantly on the lookout for cutting-edge new concepts, like the GGB shops,” said John Rulli, President of Simon Malls. “We are committed to adding new and dynamic retailers and uses to our shopping destinations, and the GGB shopping experience is exactly the type of innovation our customers want and expect from us. We’re excited to work on the GGB launch, and look forward to a long and deepening relationship as we build this network together.”

The first shop is expected to open in March 2019 at Castleton Square Mall in Indianapolis, Indiana. The remaining shops will be opened over the course of 2019.

“Our partnership with Simon allows GGB to launch our brands and CBD products in premier shopping destinations across the U.S.,” said Peter Horvath, CEO of GGB. “Our management team has had decades of experience working closely with developers and operating premium retail stores in their properties. We know this arrangement gives us access to the best locations, foot traffic, and consumers.”

GGB said that along with this agreement it has entered into a consulting agreement for services with Simon Canada Management Ltd. through its wholly owned subsidiary GGB Kiosks LLC.  In exchange for the services rendered GGB has issued to Simon Canada $2,232,824.42  in GGB common shares and 1,000,000 common share purchase warrants of GGB with an exercise price of $4.47.

GGB also said that it entered into an Advisory Services Agreement with J. Salter Ltd., d.b.a. Authentic Retail Concepts, Ltd., for a variety of consulting services that leverage a network of strategic relationships, including Simon Property Group. As compensation for the services under the Advisory Agreement, GGB has issued to ARC $2,232,824.42 in GGB common shares reflecting the GGB share price of USD$4.47.


Debra BorchardtDebra BorchardtJanuary 10, 2019
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3min6380

Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) has capitalized on its prior relationships with the DSW (NYSE: DSW) shoe chain to reach an agreement to sell its Seventh Sense Botanical Therapy brand at select stores in the U.S.

DSW stands for Designer Shoe Warehouse and the company has 515 warehouses in 44 states. Many of the Green Growth executives previously worked at DSW, so the relationship between the two has been expected. Accessories, including beauty and wellness products, is a growing category for DSW and the company said that it will continue to be a component of its growth strategy.

The agreement is for 54,960 units and covers sales in 96 U.S.-based DSW stores. The Seventh Sense brand offers  CBD-infused products including muscle balms, body lotions, body washes and foot creams. The two companies tried a test phase last autumn in which Green Growth Brands sold select Seventh Sense products in 10 DSW stores. Green Growth said that during the first 10 weeks of the test period, 74.4% of product presented on shelves was sold, significantly exceeding expectations.

“DSW is the number one full line adult footwear specialty retailer in North America1,” said Peter Horvath, CEO of Green Growth Brands. “They have revolutionized shopping for shoes and accessories and we are thrilled they chose to partner with our company, allowing us to introduce a new product category to their customers.”

“The Agreement, and the deepening relationship with DSW, is the first step in our strategy to expand sales of personal care CBD products through external partnerships, in mall kiosks, and through a growing number of stores and online,” added Horvath.

“We have seen recent shifts in consumer behavior accelerate changes in the retail industry,” said Roger Rawlins, CEO of DSW Inc., “North America’swidespread adoption of the use of CBD products is one of the best examples of these shifts, and we could not be more excited about our partnership with Green Growth Brands and the introduction of their products to our customers.”

 


Debra BorchardtDebra BorchardtJanuary 2, 2019
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5min3140

It’s time for your daily hit for cannabis financial news for January 2, 2019

On The Site

Cannex Capital Holdings Inc. (CSE: CNNX) today announced its financial results for the second quarter of the 2019 fiscal year, which ended on October 31, 2018.

Revenue for the quarter rose to $3.05 million, up roughly 223% from $1.8 million during the same period in the previous year. The bulk of the revenue increase was attributed packaging sales and rental income.

Likewise, the company’s net income rose to $696,746; a significant increase when compared to the loss of $815,188 during the second fiscal quarter of 2018. Adjusted EBITDA decreased slightly, falling from $1.1 million to $1.03 million. At the end of the period, Cannex had approximately $10.04 million in cash and cash equivalents.

In Other News

Xanthic Biopharma, Inc. (CSE : GGB) (OTCQB : GGBXF) officially changed its corporate name to Green Growth Brands Inc. The company had been operating under the trade name “Green Growth Brands” since the November 9, 2018 closing of its reverse take-over of the existing Xanthic entity. The new name is effective immediately and will be implemented across the company. The common shares will continue to trade on the Canadian Securities Exchange under the stock symbol “GGB” and on the OTCQB under the stock symbol “GGBXF”. The new CUSIP number of the Company’s common shares will be 39305B105 and the new ISIN number will be CA39305B1058.

The Supreme Cannabis Company, Inc.  (TSXV: FIRE) (OTCQX: SPRWF) (FRA: 53S1), announced 7ACRES has 19 completed flowering rooms and is on track for all 25 flowering rooms to be completed in March 2019. Once completed, 7ACRES will have a greenhouse footprint of approximately 300,000 square feet, with the total facility reaching over 440,000 square feet.  Supreme Cannabis expects 7ACRES to reach its estimated annual output of 50,000 kg by the middle of calendar 2019.

Sunniva Inc. (CSE:SNN) (OTCQB:SNNVF), a North American provider of cannabis products and services, announced today the closing of the previously reported 100% acquisition of LTYR Logistics, LLC a California-based cannabis distribution company.

Honeydrop Beverages announced a new partnership with Boulder, Colorado-based Evo Hemp to launch a line of Honeydrop Cold-Pressed CBD Lemonades. Made with 20 mg of premium U.S grown CBD sourced by Evo Hemp and a teaspoon of raw U.S. honey, the new CBD lemonades contain only 4 g of sugar per bottle and will be offered in three flavors: REVIVE (Matcha), RELAX (Lemon) and REHAB (Turmeric). The new line was conceived and crafted by Honeydrop’s SVP Mareill Kiernan, who is also a certified holistic natural foods chef and health coach.The products will initially be available in Southern California and the New York Tristate area via distributors Los Angeles Distributing and Doras Natural at an MSRP of $5.99. Nationwide shipping will also be available.

 



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