Harvest One Archives - Green Market Report

Debra BorchardtNovember 26, 2019
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Green Growth Brands

Green Growth Brands Inc. (CSE: GGB) (OTCQB: GGBXF) reported its results for fiscal first-quarter 2020 ending September 28, 2019. Revenues for the period totaled $12.7 million, a 77% increase over the previous quarter. However, the company delivered a whopping net loss of $30 million versus last year’s net loss of $2.8 million for a net loss of 15 cents per share over last year’s net loss per share of three cents per share.

Expenses Are Very High

General and administrative costs were $11,433,502 for the 13 weeks ended September 28, 2019, compared to
$2,450,960 for the three months ended September 30, 2018, of the prior year. This included head office salaries of
$5,654,77, legal and professional fees of $3,290,363, travel-related costs of $405,474, occupancy costs of $435,863, insurance costs of $349,938, and other expenses of $302,032 for the 13 weeks ended September 28, 2019. Also included in general and administrative costs for the 13 weeks ended September 28, 2019, are termination and severance payment of $421,396 and write-down of technology of $573,662.

“As we approach the holiday shopping season, we are confident in our growth trajectory,” said Peter Horvath, CEO of Green Growth Brands. “We are proud of the topline growth we accomplished in Q1 and are extremely pleased with our current results, which are an indication of future growth. In fact, the four weeks of fiscal November, retail CBD sales were two-thirds of our total CBD sales reported in all of the thirteen weeks of first quarter fiscal 2020, which we are reporting today. This topline growth is reflective of our shift from investing in the foundation of our CBD business to focusing on its execution.”

CBD Biz Costs More Than It Makes

While the company is touting its CBD success, the hard numbers aren’t that great. For the quarter CBD sales came in at $5.1 million. The CBD segment, however, incurred operating expenses of $11,225,559. Sales and marketing include personnel costs of $3,319,371; advertising costs of $1,966,655; occupancy costs of $570,254; professional fees of $229,852; supplies, postage and credit card fees of $483,125; travel of $303,657; and other expenses of $606,147.

“In a very short time, we have grown a meaningful CBD footprint. We believe our products, network of shops, rapidly growing web business and wholesale relationships position us as a leader in the industry. In the coming quarters, we look forward to reporting similar trends and results for our MSO segment of the business. As we begin to reach scale our consumer and operations expertise will be clearly reflected, not only in the customer experiences we create and the loyalty we drive but also in our financials as we work towards profitability.”

Harvest One

Harvest One Cannabis Inc. (TSX-V: HVT)(OTCQX: HRVOF) announced a net revenue of $4.1 million for the three months ending September 30, 2019, representing a 34% increase over the previous quarter, and a 142% increase over the same period in 2018. The company also reported a net loss of $5.2 million, which was slightly less than last year’s net loss of $5.7 million for the same time period.

Grant Froese, CEO of Harvest One, said, “We are very encouraged by strong revenue growth in the first quarter of fiscal 2020. Cannabis sales throughout the industry have been greatly impacted by provincial and regulatory challenges, particularly the slow rollout of retail stores in both Ontario and British Columbia. Unlike some other Canadian Licensed Producers, we are in a fortunate position of having a diverse product portfolio, where cultivation equates to approximately 50% of our revenue, with our remaining revenues coming from our medical and consumer divisions.”

Cost Cutting Measures

Mr. Froese continued, “In light of recent challenges within the cannabis industry, the company has made some difficult but necessary decisions to improve cash flows and reallocate capital to ensure the long-term growth of the Company. Harvest One has implemented significant cost-saving measures across all its divisions and expects to realize these savings immediately and improve upon them in future quarters.”

The company is laying off 20% of its workforce across all divisions. Harvest One also said it is planning on divesting its 50.1% interest in the Greenbelt Greenhouse facility and its outdoor growing site located in Lillooet, British Columbia. It said the sale of these non-core assets will provide cash proceeds to support the expansion of the company’s core business lines and operational strengths.

It is repurposing its Lucky Lake facility to focus on the company’s core strengths: namely, the development, production, and distribution of its value-added infused products, including the manufacture of its Satipharm Gelpell capsules in Canada.


Debra BorchardtMay 3, 2018
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It’s time for your Daily Hit of cannabis news for May 3 2018:

On The Site:

DEA Wins One

A panel of judges for the 9th U.S. Circuit Court of Appeals rejected a challenge filed by cannabidiol (CBD) producers against a Drug Enforcement Agency rule that classifies CBD as a Schedule I drug. The rule originated in 2016 when the DEA created a new Administration Controlled Substances Code Number for the term “marijuana extract,” which defined a marijuana extract as “an extract containing one or more cannabinoids that have been derived from any plant of the genus Cannabis…” This meant that CBD, regardless of whether it was extracted from hemp or cannabis, was now effectively a Schedule I substance.

Firing back at the DEA, the Hemp Industries Association filed a challenge against the rule, arguing that the agency overstepped its authority by scheduling substances that were not included in the Controlled Substances Act and that hemp-based CBD extracts were protected under state laws and Farm Bill provisions.  The HIA’s case hinged on whether or not the DEA rule violated agricultural laws, which the justices determined it did not and consequently ruled in favor of the DEA.

ABcann Global Corporation

ABcann Global Corporation (ABCCF) reported net sales of C$922,030 in 2017 versus C$525,940 in 2016.  The annual report or business update did not provide much in the way of standard financial reporting with regards to profits or losses. ABcann’s 2017 audited annual financial statements showed a cash balance on December 31, 2017, of $70.8 million and operating expenses totaling C$27.5 million.

Namaste Technologies

After posting an impressive second quarter financial earnings, the cannabis-tech company Namaste Technologies (NXTTF) has started makings moves in the world of artificial intelligence.

Today the company announced that they have executed a definitive agreement to acquire Findify AB, a Swedish corporation on the forefront of A.I. powered e-commerce personalization, delivering solutions such as personalized search, recommendations, and advanced data analytics.

In Other News

Medicine Man Technologies Inc.

Medicine Man Technologies Inc. (MDCL) reported financial results for the quarter ended March 31, 2018. Medicine Man generated revenues of $1,211,037 as compared with the three months ending March 31, 2017, where it generated revenues of $541,136. Overall revenue increased during this three-month period over that of the prior year by $669, 901, or 124%, making this the fifth consecutive quarter on quarter revenue growth period achieved.

Harvest One Cannabis Inc. 

Harvest One Cannabis Inc. (TSXV: HVT)  is acquiring all the outstanding shares of Dream Water Products Canada Inc. and Sarpes Beverages, LLC in exchange for a combination of US$12.5 million in cash and C$18.5 million in shares at a deemed price of C$1.00 per share, representing total consideration of approximately C$34.5 million. After closing, Harvest One will continue to hold a substantial cash position of approximately C$62 million and zero debt. As part of this Transaction, the combination of Dream Water Canada and Dream Water USA will become Dream Water Global (“Dream Water”) and own the worldwide rights and all intellectual property to and for Dream Water.

CannaRoyalty Corp.

CannaRoyalty Corp. (CNNRF) announced that it has received renewed licenses for Kaya Management Inc., Alta Supply Inc., Vista Distribution Inc., and Zenco Manufacturing Inc. Kaya and Alta are wholly-owned subsidiaries of CannaRoyalty, and the company’s active cannabis operations in California are exclusively carried out through these two entities. The company intends to apply for permanent licenses in both the adult use and medical categories in due course during 2018, and a further update will be provided on receipt of such permanent licenses.

 


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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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