Greenlane Archives - Green Market Report

Debra BorchardtDebra BorchardtJune 4, 2020
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4min4130

Smoking accessories e-commerce brand Greenlane Holdings, Inc. (GNLN) reported falling revenue for the first quarter ending March 31, 2020. Net sales fell 32% to $33.9 million in the first quarter of 2020 versus $49.9 million for the same time period in 2019.

Greenlane blamed the drop on the FDA’s restriction on the sale of certain products, primarily mint-flavored JUUL, and the execution of Greenlane’s plan to deliberately move away from low-margin JUUL sales, to focus on higher-margin products. The company also delivered a  first-quarter net loss of $16.8 million, slightly better than last year’s net loss of $17.7 million for the same period in 2019. The company also took a $9 million goodwill impairment charge in the quarter.

“We have made significant strides in the execution of our business transformation plan and are focused on pursuing higher-margin revenue opportunities while strategically right-sizing our operations to the current environment,” said Aaron LoCascio, Greenlane’s Chairman and Chief Executive Officer. “We’re beginning to see the positive impact of the investment we made to develop and launch our Greenlane Brands, which accounted for a record 18.5% of net sales and drove the sequential improvement in our gross margin.”

JUUL Drops

The popular candy-flavored vape product JUUL came under fire for its targeted approach to teens and young adults. The fallout was that sales decreased for Greenlane to roughly $4.4 million in the quarter, from approximately $21.0 million in the first quarter of 2019. The company has switched its focus to Greenlane Brands whose net sales grew to $6.3 million dollars or 18.5% of total revenue in the first quarter of 2020 versus $4.6 million in the first quarter of 2019.

The Greenlane Brands category is made up of child-resistant packaging innovator Pollen Gear; VIBES rolling papers; the Marley Natural accessory line; the Keith Haring Collection accessory line; Aerospaced & Groove grinders, and Higher Standards, which is both an upscale product line and an innovative retail experience with flagship stores at New York City’s Chelsea Market and in Malibu, California.

The company said that net sales of its third-party brands, including Firefly, Santa Cruz Shredder, and MJ Arsenal increased by approximately $1.2 million in Q1 2020 as compared to Q1 2019.

Company Shifts

Greenlane clearly saw the writing on the wall and moved quickly to adapt to the changing landscape with regards to losing its cash cow in JUUL. The company closed its brick-and-mortar retail store in Ponce City Market. In addition, Greenlane closed its Schenectady, NY, and Delta, Canada distribution centers on May 14, 2020, and May 15, 2020, respectively, and expects to close its Jacksonville, FL, Torrance, CA, and Visalia, CA distribution centers in June 2020. The company did enter into a new lease agreement for a new retail store located in Barcelona, Spain, which opened to the public on May 26, 202

Salaries, benefits, and payroll taxes in the quarter decreased to $1.5 million, or 18.2% due to a decrease in equity-based compensation expense of $2.5 million. The company also said it had a targeted reduction of approximately 50 employees which is expected to positively impact its results in future quarters

Cash and cash equivalents were $43.9 million and total debt was $8.3 million as of March 31, 2020, compared to $47.8 million and $8.3 million, respectively, as of December 31, 2019.


Debra BorchardtDebra BorchardtDecember 30, 2019
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5min6350

It might have been a tough year for the cannabis company stock valuations, but it was a stellar year for new luxury products. Whether it was well-designed pipes or artistic accessories, consumers had their choice of high-end paraphernalia.

Puffco Travel Pipe

Puffco has won numerous awards for its vaporizer, but really the company should be winning for its industrial design of the Peak Travel Glass. This beautifully shaped water pipe lets consumers travel safely with the glass pipe filled with water, making it easier than ever to consume on the go and sure to make you the hit of any party. The company has filed for a patent on the closure system that features two positions accessible simply by rotating the mouthpiece. The open position lets you fill with water, inhale, empty water, and clean, where the closed position locks in your water so that none escapes during storage and transport.

At just under $125, this is truly a wish list item. However, it isn’t just any old water pipe. This one can be charged in order to determine heat settings. The website has created how-to videos in case you need some pointers. It’s fantastic to look at and impressive to use.

Vessel Vaporizor

Vessel Brands makes some of the most stylish vape products on the market. Designed with high-end materials like matt finished metals or woods like walnut and beechwood.  The idea is to provide the consumer with a vape product that will give the best airflow possible with an aesthetically pleasing appearance. It’s designed with a long-lasting battery that fits a standard 510 threaded oil cartridge. Each Vessel comes with a charger that has a magnetic connection on one end and a USB charger on the other. A moderate user can get 2-3 weeks from one charge.

Each Vessel is currently retailing for $80, but a special is running to get two Vessels for $125. With some vape pens, the consumer has to pull and pull, but with the vessel, it is effortless. The company is aware of the dangers that some users have been subjected to as a result of black market vape cartridges. Vessel has included several articles in its blog section in order to educate consumers on buying the safest cartridges to use with their brand. CBD oil cartridges can also be used with Vessels in case the consumer is a medical marijuana patient.

Greenlane’s Keith Haring Glass

This fall e-commerce company Greenlane (NASDAQ: GNLN) released its first products from its exclusive glass line featuring artwork by the famous late Keith Haring. Greenlane is mostly known for selling other company’s products like Juul and Pax, however, the company also has a brick and mortar store called Higher Standards. The store is known for its premium smoking accessories and it stocks the Keith Haring line. Greenlane is releasing a handful of the products at a time.

The small glass pipes or spoons retail for $50, while the larger water pipe goes for $220. At 12.4-inches tall, it is made from thick borosilicate glass that withstands extreme heat. A seven-slit showerhead percolator produces fine bubbles to moisturize, clean, and cool your smoke. The Water Pipe is designed with a fat-lipped mouthpiece, built-in ice catcher, and splashguard for comfortable draws. Trays and ashtrays retail for $60 and coming soon, lighters emblazoned with Haring artwork.


Debra BorchardtDebra BorchardtDecember 5, 2019

4min9900

Mostly known for Pax and Juul sales, Greenlane Holdings Inc.(NASDAQ: GNLN) is now launching a line of functional glassware decorated with the imagery of legendary graffiti artist Keith Haring. The smoking accessories include small glass pipes, larger water pipes ashtrays and regular rolling trays.  The K.Haring Collection launches November 21, 2019, in Higher Standards stores and will be available online on November 25, 2019, at haringglass.com.

“As a longtime admirer and supporter of Keith Haring, his art, and his legacy, I am thrilled to introduce the K.Haring Collection,” said Sasha Kadey, Chief Marketing Officer of Greenlane and Creative Director for the K.Haring Collection. “The art world has long had an intertwined relationship with cannabis and has in many ways been instrumental in the advancement of the industry. The K.Haring Collection will help our mission to destigmatize and elevate the cannabis experience.”

Kadey said he has looked at numerous deals for branding efforts, but none resonated as strongly as the Haring artwork. The artist is not only well-respected in the art world, but as a graffiti artist, he also brings street cred amongst the cannabis community.

Haring passed away in 1990 at the age of 31 in Manhattan from the Aids disease. The Haring Foundation has a mission to continue to promote the artwork but is also known for supporting not-for-profit organizations that help underprivileged children, as well as organizations involved in education, prevention, and care related to AIDS. Haring doesn’t have any cannabis images in his artwork, but his skateboard images are loved by the skateboard community which does support the cannabis community.

Kadey said there was a lot of crossover between cannabis, the art world, and skateboarding which led to the company’s launch party that combined a show of the new products with apparel from Diamond Supply that featured Haring artwork. The event was held in Manhattan and drew a combination of cannabis industry insiders, as well a some of the top city skateboarders.

The ten-piece collection consists of high-quality glassware that may be used as décor and includes all of the essentials for an elevated smoking experience. Kadey made a point of mentioning that the company didn’t just grab and glass product and slap an image on it. The items were specifically designed for this project. Each piece is distinguished by Haring’s designs with four different colorways to be released in the coming months.

The Keith Haring Glass Collection includes:

K.Haring x BiC© Lighter, $5
K.Haring Taster, $30
K.Haring Tray, $60
K.Haring Dog Bat Catchall, $60
K.Haring Bat Man Catchall, $60
K.Haring Angel Catchall, $60
K.Haring Spoon, $50
K.Haring Bubbler, $120
K.Haring Rig, $180
K.Haring Water Pipe, $220

Kadey said he has since been inundated with other artists wanting a similar brand launch, but for now, he is being very selective. “We are looking forward to offering this sophisticated glassware collection to Higher Standards customers both in stores and online as we continue to grow our house of brands and expand our direct to consumer business, offering innovative designs and products to consumers across the U.S.”


Debra BorchardtDebra BorchardtApril 18, 2019
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3min12810

The NASDAQ Markets Group (NDAQ) has been notoriously reluctant to list any cannabis related companies, even if they are only ancillary and not plant-touching. It seems vape distributor Greenlane Holdings Inc. has broken through the company’s barriers.

Greenlane will begin trading on NASDAQ today with the ticker GNLN after upsizing its initial public offering of six million shares with the offering price of $17. The company had expected to price the shares between $14-$16.

According to the company, Greenlane is offering 5,250,000 shares and the selling stockholders are offering 750,000 shares. In addition, the selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 900,000 shares of Class A common stock. The offering is expected to close on April 23, 2019, subject to satisfaction of customary closing conditions.

Greenlane Revenue

Greenlane recorded net sales of $178 million in 2018 and a 102% increase over the $88 million in 2017. The cost of sales in 2018 was $143 million. Still, the company reported a net loss of $6.4 million in 2018.

A significant percentage of the company’s revenue is dependent on sales that it purchases from a small number of key suppliers, including PAX Labs and JUUL Labs. For example, products manufactured by PAX Labs represented approximately 15.6% and 29.4% of Greenlane’s net sales in 2018 and 2017, respectively, and products manufactured by JUUL Labs represented approximately 36.5% and 11.4% of its net sales 2018 and 2017, respectively.

Greenlane shipped over 16.0 million product units to its B2B customers in 2018 compared to over 2.0 million product units to its B2B customers in the fiscal year 2016, representing a growth rate of approximately 687.3%. The company grew its employee headcount from 89 employees as of January 1, 2016, to 256 employees as of December 31, 2018.

Greenlane Chain

Greenlane’s customers include over 6,600 independent smoke shops and regional retail chain stores, which collectively operate approximately 9,700 retail locations, and hundreds of licensed cannabis cultivators, processors and dispensaries. Greenlane also owns and operates two of the most visited North American direct-to-consumer e-commerce websites in the vaporization products and consumption accessories industry, VaporNation.com and VapeWorld.com, which offer convenient, flexible shopping solutions directly to consumers. Greenlane is developing a unique e-commerce platform, Vapor.com, into which its existing e-commerce websites will be consolidated.


StaffStaffApril 8, 2019
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4min6710

It’s time for your Daily Hit of cannabis financial news for April 8, 2019.

On The Site

POSaBIT

Seattle-based fintech company, POSaBIT began trading this morning on the CSE under the ticker PBIT.  The company that serves cannabis retailers by delivering bitcoin-enabled payment processing and point-of-sale systems, with built-in compliance features customized to the state each retailer operates in.

For the nine months ending Sept. 30, 2018, the company generated $1.39 million in revenue, a 266% increase over the prior year for the same time period. The company said that pursuant to private placement financings undertaken in conjunction with the listing, POSaBIT generated gross proceeds of $1.3M. The company’s footprint includes California, Nevada, Oklahoma, Colorado, and Washington.

In Other News

1933 Industries

Cultivator and producer of cannabis flower 1933 Industries Inc. (CSE: TGIF) (OTCQX: TGIFF) signed a licensing agreement dated April 3, 2019 between House of Hawk, LLC and the company’s subsidiary, Infused MFG, LLC for the launch of several co-branded CBD wellness products for a two-year term in North America.

Chris Rebentisch, USA COO and Founder of Infused stated, “It’s truly an honor to be working with Tony Hawk’s Birdhouse Skateboards™ brand and their incredible organization. Birdhouse team members Clive Dixon, Ben Raybourn, David Loy and Clint Walker will help support the new partnership via social media. The opportunity of offering our sports recovery products under a partnership with Hawk’s brand Birdhouse adds credence to our brand. Tony is an internationally recognized action sports figure and responsible for fuelling the growth of skateboarding as a professional sport.” Mr. Rebentisch added, “Infused recognizes that the action sports vertical is an underserved market. Our mission is to offer the best of breed recovery products in the market today and we look forward to working with Birdhouse in this endeavour.”

Mr. Tony Hawk remarked, “We’re excited to be a part of this new movement that is becoming more recognized as a healthy alternative to recovering from the aches and pains that we regularly incur in the action sports world. And we couldn’t be happier to join forces with Canna Hemp™, an established and trusted partner with an expertise in this market.”

Greenlane

Greenlane Holdings, Inc.  has commenced an initial public offering of 5,333,333 shares of its Class A common stock, of which Greenlane will be offering 4,666,666 shares and the selling stockholders will be offering 666,667 shares. In addition, the selling stockholders will also grant the underwriters a 30-day option to purchase up to an additional 800,000 shares. The price range for the initial public offering is currently estimated to be between $14.00 and $16.00 per share. Greenlane has applied to list its Class A common stock on the Nasdaq Global Market under the ticker symbol “GNLN.”

Cowen and Canaccord Genuity are acting as joint-lead bookrunners for the proposed offering. Ladenburg Thalmann & Co. Inc., Roth Capital Partners and Northland Capital Markets will act as co-managers for the proposed offering.


William SumnerWilliam SumnerMarch 21, 2018
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3min68084

Greenlane, a distributor and online retailer of vaporizer products that was formerly known as VapeWorld, announced today that it has acquired its competitor, VaporNation. Servicing approximately 9,000 independent retailers, Greenlane is now one of the world’s largest vaporizer distributors.

“We have a shared philosophy of putting clients first and offering superior customer service. VaporNation’s strong brand relationships combined with Greenlane’s make for incredible category coverage,” said Jeff Sherman, CEO of VaporNation, in a statement. “VaporNation’s performance in direct-to-consumer sales, coupled with Greenlane’s dominance in wholesale, make this transaction a natural fit. It is really gratifying to see VaporNation become a part of Greenlane.”

Over the last decade, the vaporizer industry has evolved from a small cottage industry into a billion-dollar business, thanks in part to the recent proliferation of legal cannabis across the United States. In 2017, electronic cigarette sales were estimated to have reached $10 billion, compared to $20 million in 2008.

Infographic: Vaping has Picked up Worldwide | Statista

According to a report by Research and Markets, sales of vaporizers are expected to exceed $43 billion by 2023.

With this recent acquisition, the company will expand its footprint to include eight US Cites, six automated distribution centers, and approximately 200 hundred employees.

“We’ve been hard at work and steadily growing for over 13 years now; in the past couple of years we have really pulled ahead of our competition and with this acquisition, we have sprinted ahead even further. We couldn’t be more excited to bring VaporNation into the Greenlane family,” commented Greenlane CEO and founder, Aaron LoCascio.

Under the agreement, VaporNation’s retail site, VaporNation.com, will continue under the management of Greenlane. VaporNation’s wholesale enterprises will be absorbed into Greenlane’s operations. The previous owners of VaporNation will continue on with Greenlane in an advisory capacity for an undisclosed amount of time. Because both companies are privately held, further details of the acquisition have not been made public.



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