iAnthus Archives - Green Market Report

StaffStaffAugust 20, 2019
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7min1370

It’s time for your Daily Hit of cannabis financial news for August 20, 2019.

On The Site

iAnthus

Multi-state operator iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) said that it has entered into a senior secured term loan of up to $50 million from one or more investment funds managed by Torian Capital Partners. The loan will be doled out in two tranches of $25 million each with similar terms.

iAnthus said it will use the money for its expansion efforts in Florida and the company’s new Be. retail locations in Nevada, New Jersey and New York. The company is expected to report its second-quarter earnings on August 27.  Last month the company noted that its CBD For Life products will be sold in Dillards Department Stores.

BDS Analytics

Cannabis data company BDS Analytics announced that it closed on $7 million in new financing, led by KEY Investment PartnersAltitude Investment Management, and 7thirty, with participation from other investors. A part of the financing deal, Pete Karabas of KEY Investment Partners will be joining the board of directors. BDS said it will use the money to expand coverage of emerging cannabis markets and strengthen its operating infrastructure with investments in machine learning, marketing and sales, and strategic partnerships.

“As the global cannabis economy continues to expand, it is imperative that we’re able to scale alongside it to remain an indispensable asset for key decision-makers in the industry,” said Roy Bingham, CEO, and Founder of BDS Analytics. “We’re excited about this new round of funding, which will allow us to further enhance our GreenEdge platform and expand our capabilities to the entire addressable cannabinoid market.”

In Other News

Organigram

Organigram Holdings Inc. (NASDAQ: OGI) (TSX VENTURE: OGI) received final approval for the listing of its common shares on the Toronto Stock Exchange (“TSX”). Organigram’s common shares will commence trading on the TSX at the opening on Thursday, August 22, 2019, continuing to trade under the symbol OGI. To ensure continued and seamless trading for the Company’s shareholders and as a result of the graduation, there will be no further trading on the TSX Venture Exchange after Wednesday, August 21, 2019. Organigram’s common shares will be delisted from the TSX Venture Exchange at the commencement of trading on the TSX.

Empower Clinics

Empower Clinics  (CSE: CBDT) (OTC: EPWCF) a vertically integrated and growth-oriented CBD life sciences company, and a multi-state operator of medical health & wellness clinics in the U.S., announced that its common shares will begin trading on the OTCQB Venture Market at the opening of the market on August 20th, 2019 under the stock symbol (OTC: EPWCF). “Our listing on the OTCQB Venture Market in the United States complements Empower’s listings on the Canadian and Frankfurt Stock Exchanges, respectively, broadening our investment base as we accelerate our growth strategy in the global medical cannabis and wellness sectors,” said Steven McAuley, Empower CEO.  “This is a timely milestone, as we have a robust pipeline of activity tied to product development, business development, M&A and, overall company expansion.”

Acquired Sales Corp.

Acquired Sales Corp. (OTC Pink: AQSP) announced that it has signed a definitive merger agreement to acquire 100% of CBD LION LLC (www.CBDLION.com), Mundelein, Illinois, for consideration of $2 million in cash, plus 5 million shares of Acquired Sales Corp.’s common stock. Acquired Sales Corp. also announced that it has loaned $300,000 to CBD LION LLC that will be used as growth capital.


Debra BorchardtDebra BorchardtAugust 20, 2019
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4min1470

Multi-state operator iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) said that it has entered into a senior secured term loan of up to $50 million from one or more investment funds managed by Torian Capital Partners. The loan will be doled out in two tranches of $25 million each with similar terms.

iAnthus said it will use the money for its expansion efforts in Florida and the company’s new Be. retail locations in NevadaNew Jersey and New York. The company is expected to report its second-quarter earnings on August 27.  Last month the company noted that its CBD For Life products will be sold in Dillards Department Stores.

“Reducing our cost of capital has been one of our key goals for this year.  We believe this is a great opportunity to add strength to our balance sheet as we continue to invest in our key expansion initiatives, along with people, systems, and brands,” said Hadley Ford, CEO of iAnthus. “This transaction will position us well as we continue our strategic investments to take advantage of the once-ever opportunity presented by the cannabis industry.”

Terms

iAnthus said that the loan will be secured by a first-priority lien on all current and future assets of the company and its affiliates, subject to certain exceptions, including applicable cannabis regulations, and will be guaranteed by all current and future affiliates of the Company.  Each tranche of the Term Loan will bear interest at a rate of 9.0% per annum, payable quarterly in arrears during their respective terms and each tranche will mature 36 months from the date of its advance. Following the 12-month anniversary from the date of advance of each tranche, iAnthus may prepay the outstanding principal amount of the such tranche: (i) in year two, upon payment of 109% of the principal amount outstanding and (ii) in year three, upon payment of 104.5% of the principal amount outstanding.

Further, upon completion of each tranche, Torian Capital will be issued share purchase warrants (“Warrants”) from iAnthus in an amount equal to 20% coverage of each tranche. Each Warrant will entitle Torian Capital to purchase one common share for a period of 36 months from the date of issue. The Warrants issued will, subject to the policies of the Canadian Securities Exchange (“CSE”), have an exercise price equal to a 25% premium to the closing price of iAnthus’ common shares on the CSE on the day prior to the applicable closing of the relevant tranche. The Warrants may be called by iAnthus if the volume-weighted average price of iAnthus’ common shares on the CSE exceeds 2.0x the exercise price for 20 days within any 30-day period, and the daily average trading volume of iAnthus’ common shares on the CSE equals or exceeds 25% of the Warrants then outstanding.


StaffStaffJuly 3, 2019
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5min5490

Beth Stavola is a leading cannabis entrepreneur. She was formerly the Chief Operating Officer, President of US Operations, and Board Member of MPX Bioceutical Corporation, and is now the Chief Strategy Officer and Director for iAnthus. Beth is also the founder of the top CBD beauty and wellness brand, CBD For Life, a privately-held company that provides customers with the benefits of cannabinoids while avoiding unwanted psychoactive effects. Previously, Beth worked on Wall Street with Jefferies and Company, rising to the position of Senior Vice President. She is actively involved in organizations that promote women in the cannabis industry and in 2014 was named as one of the leading medical cannabis entrepreneurs by Congresswoman Dina Titus, on the floor of the House of Representatives.  In 2017, Cannabis Business Executive named Beth #3 on the “CBE 75 Most Important Women In Cannabis” list.

GMR Executive Spotlight Q&A –

Full birth name: Beth Stavola  

Title: Chief Strategy Officer and Director

Company: iAnthus Capital Holdings

Years at current company: <1 

Education profile:  Beth Stavola holds the esteemed honor of being named as one of the leading medical cannabis expert entrepreneurs on the floor of the House of Representatives in 2014 by Congresswoman Dina Titus. She holds a BS in Finance and Economics from Monmouth University and spent most of her Wall Street career at Jefferies and Company.  

Most successful professional accomplishment before cannabis:   While I structured and closed many deals during my time in finance, being the #1 producer in my department the most times during a ten-year career at Jefferies is the highlight. I think it shows my determination to succeed professionally no matter the industry. A personal investment in medical cannabis lead me on this incredible journey where I am able to combine my passion and experience to help people. Sometimes opportunities happen where you least expect them and working with people who have different perspectives can open your mind to new ways of thinking and growing your business.

Company Mission: In the high growth environment of the U.S cannabis market, an experienced team, access to capital and an ability to grow through acquisition are the three key drivers of a company’s success. iAnthus was founded by entrepreneurs who bring together market leading experience in operations, capital markets and M&A.

Combining these skills, we are building a cannabis company that will seize the opportunities this emerging industry offers.

Company’s most successful achievement:  The transformational Deal with MPX which closed in February 2019 was the first public-to-public U.S. cannabis transaction with an HSR filing to be approved by the Department of Justice. The combined company now has operations in 11 states. 

Has the company raised any capital (yes or no): if so, how much?  

We have raised 360mm CAD to date.

Any plans on raising capital in the future? I’m unable to comment on future plans.

Most important company 5-year goal:  Our biggest goal is to expand our brands into new and diverse markets as they open up in the U.S. and abroad. This will ensure that our customers receive the highest quality products in a timely, efficient and reliable way, as our brands become recognized nationally and internationally under the iAnthus umbrella.

 


William SumnerWilliam SumnerMay 3, 2019
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5min3210

It’s time for your Daily Hit of cannabis financial news for May 3, 2019.

On The Site

Indose

Indose, a groundbreaking precise dosage vaporizer that measures and displays exact dosage in real-time, down to the milligram, for a customized and controlled cannabis experience, announced today that it has closed a $3.5 million Series A round led by Casa Verde Capital.

Millennials Are Beginning Cannabis Careers Through Summer Internships

An increasing number of North American cannabis companies are reaching out to college students, offering summer internships as an opportunity to get their foot in the door in the growing industry. Students now are being given opportunities that students only 5 years ago could have only dreamed of!

Green Market Report’s Marijuana Money May 3, 2019

Green Market Report just learned that one of the sponsors at next week’s Green Market Summit is going to be announcing a new product at the conference. This is going to be huge news. We still have some room left, but there is a limited about of seats. Get your tickets before it’s too late.

In Other News

TerrAscend

TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) has announced that its manufacturing facility in Mississauga, Ontario, Canada has been issued a Good Manufacturing Practice certificate in according with European Union (EU) laws; which will allow the company to export medical cannabis to the EU. The company also announced that it has entered into a comprehensive sales and distribution agreement with the German pharmaceutical wholesaler, iuvo Therapeutics GmbH. “Just five months ago, TerrAscend became the first North American Operator (NAO), with scale operations in both Canada and the US. Upon commencement of shipments this quarter, through our partner iuvo in Germany, TerrAscend will be the first and only global cannabis operator with sales in the three largest markets in the world,” said Dr. Michael Nashat, CEO of TerrAscend.

iAnthus

iAnthus Capital Holdings Inc. (CSE: IAN) (OTCQX: ITHUF) announced that it has completed a private placement offering of an incremental $25 million of unsecured convertible notes and corresponding warrants, as an add-on to a previously announced private placement of $35 million. The notes will mature on March 15, 2023 and will carry an annual interest of 8%.

Fire & Flower

Fire & Flower Holdings Corp. (TSXV: FAF) announced that it has entered into a definitive agreement to acquire four licensed cannabis dispensaries from Prairie Sky Cannabis Inc. for $13 million, half of which will be paid in cash and the other half in common shares of the company. The dispensaries, which are under the brand name Jimmy’s Cannabis Shop, are located in the Saskatchewan communities of Battleford, Estevan, Martensville, and Moosomin. “The acquisition of four additional retail cannabis stores in the province of Saskatchewan is the first in Fire & Flower’s aggressive acquisition strategy for 2019,” said Fire & Flower CEO Trevor Fencott. “In conjunction with our Open Fields wholesale distribution platform in the province, it cements our leadership position in this strategic market.”


Debra BorchardtDebra BorchardtApril 2, 2019
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4min5490

iAnthus Capital Holdings, Inc. (CSE: IAN, OTCQX: ITHUF) reported its fiscal fourth quarter and full year unaudited results for 2018, however, the company did not release any financial statement to accompany the press release.

Fourth Quarter

The company delivered fourth-quarter revenue of $2.2 million (an increase of 165% over the same time period for 2017), pro forma revenue* for the fourth quarter was $14.8 million and the adjusted EBITDA loss for the fourth quarter was $6.0 million. The fourth quarter net loss was approximately $15.9 million, which includes $9.9 million of non-cash charges used to derive adjusted EBITDA primarily due to accretion expense, fair market value adjustments, depreciation, and share-based compensation.

Full Year

iAnthus reported full-year fiscal 2018 revenue and other income of $4.5 million (an increase of 88% over 2017) and a pro forma revenue* of $49.3 million for the full year fiscal 2018. The full year fiscal 2018 net loss of approximately $62.0 million included $44.1 million of non-cash charges used to derive adjusted EBITDA primarily due to accretion expense, fair market value adjustments, depreciation, and share-based compensation. Adjusted EBITDA loss was $17.9 million for the full year fiscal 2018.

Pro forma revenue (which includes acquired MPX entities and managed revenue for Colorado and New Mexico operations*) for the fourth quarter was $14.8 million and $49.3 million for the full year fiscal 2018.

Management Comments

“We made significant investments in expanding our footprint and scaling our operations while maintaining a prudent balance sheet in the process.  We opened eight dispensaries in the past seven months, including flagship stores in West Palm Beach, FL, and Brooklyn, NY, and plan to nearly double the pace of openings throughout the remainder of 2019.,” said CEO Hadley Ford. “We are now revenue generating in nine of eleven states and ramping quickly. Managing growth is challenging, particularly in an emerging industry.  Fortunately, we have also built an impressive operating team that combines cannabis expertise with crucial professional skillsets from outside the industry.”

Looking Ahead

iAnthus announced last week that its U.S. subsidiary has entered into a letter of intent to acquire CBD For Life, a top-ranked, national CBD brand in the U.S. This transaction is expected to close in the second quarter of 2019. CBD for Life products are currently distributed in over 750 retail outlets and channels across the U.S. The Company will continue to sell products through its own licensed facilities, as well as actively target other dispensaries within the market.

The company said it expects that sales will launch in California in the next 60 days, which will be the 10th state for revenue generation.

iAnthus also said it believes that the Massachusetts market will be one of the highest growth markets within the US, and it is iAnthus’ full intention to become a significant wholesaler within the state.


Debra BorchardtDebra BorchardtMarch 29, 2019
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4min6600

iAnthus Capital Holdings, Inc. (CSE: IAN, OTCQX: ITHUF) is acquiring CBD For Life in an all-stock deal valued at $13.7 million.  iAnthus also expects to repay the outstanding debt and related accrued interest of CBD For Life which is approximately $2 million in cash. The deal is expected to close in the second quarter of this year.

CBD For Life was launched in February of 2016 by its co-founders Beth Stavola and Julie Winter, who are well-recognized as leaders and innovators in the cannabis and CBD industries. The brand’s CBD-infused pain management and beauty products have been featured in a wide range of online and print publications including Forbes, Shape, Marie Claire, Women’s Health, Cosmopolitan, and Allure.

“Developing a strong CBD strategy is mission critical for cannabis companies to compete on a national scale while simultaneously entering the consumer product and retail marketplace,” said Hadley Ford, Chief Executive Officer of iAnthus. “With the acquisition of a name brand like CBD For Life, iAnthus is well positioned to increase our market share with greater exposure to patients and customers across the country.”

CBD For Life has experienced an increase in interest from mainstream retailers in the first quarter of 2019 following the passage of the Farm Bill. Products are available directly to consumers online and CBD For Life is currently distributing to 750 retail locations and actively on-boarding approximately 25 new locations per week with a dedicated sales channel working with national retailers.

“We’re excited to bring CBD For Life into the iAnthus family—our CBD brand will provide iAnthus with even greater reach and a wider consumer base, particularly in states that have yet to implement full-scale cannabis programs,” said Beth Stavola, Co-Founder of CBD For Life and Chief Strategy Officer of iAnthus.

Beth Stavola is being featured as an honoree this year for the “2019 High Times Women of Weed” and was recognized as Inc.com’s “Top 100 Female Founders” in 2018.


Debra BorchardtDebra BorchardtMarch 25, 2019
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4min13923

iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQX: ITHUF) is redeeming its outstanding convertible debentures of MPX Luxembourg SARL, a wholly-owned subsidiary of iAnthus, in the aggregate principal amount of $32,257,804.07. The redemption date of the Debentures will be April 24, 2019. The Debentures are redeemable for an amount equal to $860.43 per $1,000 principal amount of Debentures.

“The MPX Luxembourg convertible debentures were a legacy obligation inherited by iAnthus as part of the acquisition of MPX Bioceutical Corp. The redemption or resulting conversion of these debentures will enable us to significantly reduce our interest expense and potential further future dilution for our shareholders,” said Hadley Ford, Chief Executive Officer of iAnthus. “The removal of this expensive debenture is a key part of our commitment to optimizing our cost of capital. Given that the holders of the debentures are significantly in the money, it is our expectation that the vast majority of holders will convert, as opposed to redeem their notes.”

iAnthus acquired MPX in an all-stock transaction valued at C$835 million that was announced in October. The combined company, excluding MPX International, will include operations and cannabis licenses in 10 states that will permit iAnthus to operate 56 retail locations and 14 cultivation/processing facilities.

MPX Capital Raise

In a separate transaction, MPX International Corporation (CSE: MPXI)  closed its previously announced non-brokered private placement offering of units of the Company. Due to increased demand, the previously announced offering was increased from C$20 million (approximately $15 million) to C$26,905,162 (approximately $20.2 million). The offering consists of the issuance of 56,052,421 Units issued at a price of C$0.48 per Unit.

MPX said it intends to use the net proceeds from the offering to fund capital expenditures in Owen Sound, Ontario as well as potential future acquisitions and for working capital and general corporate purposes. The securities issued pursuant to the offering are subject to a four month hold period in accordance with applicable securities laws expiring on July 21, 2019.

iAnthus Redemption Terms

Prior to the redemption of the Debentures, each holder thereof will have the right to convert the Accrued Principal Amount of their Debentures into units of iAnthus, each such unit consisting of 0.1673 of one common share in the capital of iAnthus and 0.08365 of one common share purchase warrant at a conversion price equal to $0.74 per Unit at any time prior to close of business on April 23, 2019. A holder electing to convert their Debentures will receive 1,729.80 Units for each US$1,000of Accrued Principal Amount. No fractional iAnthus Shares or iAnthus Warrants will be issued on conversion.


Debra BorchardtDebra BorchardtJanuary 16, 2019
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15min48931

New York State Governor Andrew Cuomo announced his plan to legalize adult use cannabis in 100 days. The governor did not provide a lot of details but suggested it would continue to be a restrictive program.

Of course, New Jersey also said it would legalize adult use cannabis but then found it has taken much longer to make adjustments to the rules and regulations of a conservative medical cannabis program. Cuomo did note that consumers would need to be over the age of 21 and he was very supportive of towns cities having the ability to opt out of allowing cannabis businesses.

In December the Governor said, “The fact is we have had two criminal justice systems: one for the wealthy and the well-off, and one for everyone else. He also said that law enforcement “for too long targeted the African-American and minority communities.”

On May 15, 2018, New York City Comptroller Scott Stringer published a report estimating the potential size of the state’s legal cannabis market and how much tax revenue it would generate for both the city and the state. According to the report, the New York State cannabis market could see up to $3.1 billion in annual sales, with up to $1.1 billion being generated in New York City alone. In terms of tax revenue, legal cannabis could generate up to $436 million for New York state and $336 for New York City. Some lawmakers have even suggested this money could be used to fix the troubled subway system.

A new report from ArcView and BDS Analytics is estimating the New York cannabis market could reach $1.6 billion by the year 2022, a big jump from the expected $263 million in sales for 2018. This would be the fourth biggest market in the U.S. The biggest market is California, followed by Colorado and Florida respectively.

“Let’s legalize the adult use of recreational marijuana once and for all,” he added.

During the midterm elections, the New York State government shifted to Democratic control and it was expected that the new lawmakers would fully legalize cannabis. The efforts by Cuomo as expected to be approved in Albany. The tax revenue and jobs from fully legal cannabis would be a big boost to some of the needy areas in the state.

Just this week, Canopy Growth (NYSE: CGC) said it was going to spend $150 million to build its first production facility in the U.S. after getting a license to grow hemp by New York.

Canopy Growth Corp. will spend as much as $150 million to build its first production facility in the U.S. after the Canadian cannabis company was granted a hemp license by New York state. “I applaud the political leadership at the federal and state level that has allowed today’s announcement to become reality,” Canopy Chief Executive Officer Bruce Linton said in a statement.

The company said it was reviewing locations in the Southern Tier region of New York State and said it would announce the winner within 100 days.

Cuomo is under pressure to create jobs in depressed areas in upstate New York and cannabis jobs fit the bill. A study, published by Joblift, shows that cannabis growth in California is “steadily declining,” while New York State is experiencing strong growth. New York is now third in terms of gross domestic product and is experiencing a “surge in medical marijuana job postings,” with the study saying it could hold “the most potential for overall growth in the sector.” New York experienced two times more job postings (155 vs. 67) in the first half of 2018, compared to the prior year.

Next comes the question investors want to know. Who is poised to capitalize on the New York market? Cannabiz Media is a company that tracks license holders in states around the country.

Figure 1Provided by CannaBiz Media

 

 

Company Symbol
MedMen Enterprises CSE: MMEN
Vireo Health Private Company
Columbia Care Q1 2019 Est Public Date
Etain Health Private Co.
Acreage Holdings CSE: ACRG.U
Fiorello Pharmaceuticals Private Company
iAnthus CSE: IAN
Curaleaf CSE: CURA

 

MedMen Enterprises

According to their data, it looks like MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF) is poised to be the big winner as a result of its acquisition of PharmaCann, which had the highest number of permits awarded in the state. MedMen acquired PharmaCann for $682 million in an all stock deal back in October. It not only doubled the reach for MedMen, but expanded its presence in New York.

MedMen had acquired New York’s struggling Bloomfield Industries at the beginning of 2018. The company had been unable to pay vendors and was looking for new investors. Bloomfield was one of the original five licensees in New York.

“MedMen is proud of its record of providing high quality products and shopping experience to medical marijuana patients in the state of New York and customers around the U.S. We believe that as New York moves to become the 11th state in the union to legalize adult use, the wealth of experience and knowledge MedMen brings having operated in other highly regulated and complex markets is an asset to the state,” said spokesman Daniel Yi. “We also believe that in order for an adult use cannabis market to flourish and thrive in New York, there needs to be a clear path for participation in ownership and jobs for new entrants to the industry. There also needs to be access to resources and capital for such new operators in communities disproportionally impacted by the war on drugs, and more specifically the prohibition of marijuana. MedMen stands ready to work with the state and to be a proactive partner with others in the community to build a sustainable and inclusive cannabis program.”

Vireo Health

Vireo Health is next on the list. Vireo  is  a physician-led multi-state medical cannabis company, that says “It is committed to safely alleviating pain by providing patients with best-in-class cannabis products and compassionate care.” Unfortunately for investors, this company is still private. Although it did raise $17 million back in August and the company said that it was planning on going public at some point.

Vireo is still making headlines as formers executives were set to go to trial at some point this year for smuggling cannabis oil from Minnesota to New York. The company was trying to move inventory to meet a New York deadline and the move was exposed due to a whistleblower. Dr. Laura Bultman and Ronald Owens, the company’s former chief medical officer and chief security officer.  face felony charges of smuggling $500,000 worth of cannabis oil into New York. They face up to two years in jail and a $3,000 fine for violating Minnesota state medical marijuana laws.

Columbia Care

Next in line for number of permits is Columbia Care, which is expected to go public in the first quarter of 2019 following a merger with Canaccord Genuity Growth (CGGC), a special purpose vehicle.  In October it was announced that the two companies would combine. The companies agreed that CGGC would be valued at C$60.7 million and that Columbia Care would be valued at US$1.35 billion. The deal is expected to close in the first quarter of 2019.

Columbia was selected to be one of five licensees in Virginia and became the first U.S. company licensed in the European Union. It was recently awarded one of the six new licenses in New Jersey.

Etain Health

Etain Health is one of the original five licensees in New York and it too remains a private company. It is female-owned only recently began to expand beyond the state lines as it looks to California as another market for its products.

Acreage Holdings

Acreage Holdings, Inc. (CSE: ACRG.U) (OTC: ACRZF) also stands to benefit due to its ownership of New York Canna, now known as Terradiol New York. New York Canna was originally formed  in 2015. The initial shareholders of New York Canna, Inc. were intended to be New Amsterdam Distributors (NAD) and EPMMNY. However, NAD and EPMMNY were unable to reach an agreement as to EPMMNY’s contributions to the operating entity and the terms of investment. NAD says it was the sole shareholder of New York Canna when it began talking to Acreage among others.

EPMMNY doesn’t agree with this assessment and recently filed a lawsuit asking for $400 million. EPMMNY says in its lawsuit that it was “frozen out” in 2016 and its stake reduced initially to 12.5% as NYCANNA merged with defendant NY Medicinal Research & Caring, which included NYCI Holdings, Impire Holdings and Acreage Holdings as investors.

Fiorello Pharmaceuticals

Firorello Pharmaceuticals also known as FP Wellness is a New York State only licensee. It is privately owned. The company lists its partners as The Clinic, Plant Consulting Group and LIU Pharmacy on its website. A report in the Daily Gazette said that Fiorello is building a medical marijuana production facility in Glenville and plans to open other dispensaries in Monroe, Nassau and New York counties.

iAnthus

Valley Agriceuticals was supposed to be sold to iAnthus Capital Holdings Inc. (CSE: IAN) (OTC: ITHUF) in 2017  for $17.3 million, but that deal was never closed. iAnthus then acquired New York’s Citiva Medical for $18 million at the beginning of 2018. According to the original press release, Citiva NY’s license included a cultivation and processing facility and four dispensary locations to be located in Brooklyn, Staten Island, Dutchess County and Chemung County. Citiva’s proposed 2,000 square-foot flagship Brooklyn dispensary was slated to open in Q4 2018, and would be one of only two dispensaries located in New York City’s most populous borough, with 2.6 million residents.

The statement said that Citiva’s Staten Island dispensary, would be the only Registered Organization serving Staten Island’s 500,000 residents and it was also slated to open in Q4 2018. The Dutchess County and Chemung County dispensaries are planned for the second quarter of 2019.

Curaleaf

Finally, Palliatech, which changed its name to Curaleaf Holdings Inc. (CSE: CURA) (OTC: CURLF) is based in Boston MA. It has locations in seven New York counties. Its website says more counties are coming. Near Manhattan there is a dispensary in Forest Hills in Queens. In the company’s last earnings announcement, it said that it estimates it will post revenue of $400 million in 2019 including revenue generated by the non-profits, and free cash flow of $100 million. Curaleaf expects to complete two acquisitions in the fourth quarter of 2018 in Maryland and Massachusetts. At the end of 2018, Curaleaf also expects to have at least 40 operational stores.


Debra BorchardtDebra BorchardtJanuary 7, 2019
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6min5670

It’s time for your daily hit of cannabis financial news for January 7, 2018.

On The Site

Jobs

As of 2018, there are more full-time cannabis workers than there are librarians, and the number is growing. These are not minimum wage positions either – retail managers, agriculture experts, and extraction technicians all earn attractive salaries and desirable compensation packages.

Patents

The number of global cannabis patent applications has doubled since 2008, Cannabis Law Report can reveal, as 2019 promises to be a landmark year for marijuana intellectual property. The World Intellectual Property Organization said approximately 10,246 cannabis-related applications have been filed since 1978 under the Patent Cooperation Treaty (PCT), with 6,137 applications coming after 2008. Experts say the number could potentially be even higher as firms exploit loopholes to snatch patents related to cannabis such as growing or treating addictions, without expressly referring to marijuana in their application.

In Other News

Green Thumb Industries Inc. (GTI) (CSE: GTII) (OTCQX: GTBIF) signed a definitive agreement to acquire Advanced Grow Labs LLC (AGL) and enter the Connecticut market. AGL is one of only four companies in Connecticut licensed to grow and process cannabis. The Connecticut-based cannabis company operates a 41,000 square foot manufacturing facility in West Haven with the potential to expand. In addition, AGL has a 46 percent ownership of a recently-awarded dispensary that will be located in Westport which makes it the only vertically licensed company in the state. Upon the close of AGL and the other recently announced acquisition, GTI will have 12 manufacturing facilities and licenses for 85 retail locations across 11 states.

Acreage Holdings, Inc. (CSE: ACRG.U) closed the acquisition of Florida-based Nature’s Way Nursery of Miami, Inc. (“Nature’s Way”). Nature’s Way was awarded a vertically integrated operating license last summer and will operate the business as Green Owl Pharms, the name under which it was awarded the operating license. The previously disclosed transaction paves the way for Acreage to bring cannabis products to Florida residents throughout the state. As of December 28, 2018, there were more than 209,000 total cannabis patients in Florida according to the Florida Department of Health Office of Medical Marijuana Use.

CannAmerica Brands Corp. (CSE: CANA) (OTCQB: CNNXF)  entered into a binding letter of intent to create a joint venture with Invictus MD Strategies Corp. (TSXV: GENE) (OTCQX: IVITF) and CBDistribution Company Ltd. with the intention of acquiring hemp biomass for extraction into CBD isolate using purpose-built facilities for large-scale CBD extraction.

iAnthus Capital Holdings, Inc. (CSE: IAN) (OTCQX: ITHUF) opened its first and flagship dispensary in New York on December 30, 2018. The dispensary, located at 202 Flatbush Avenue directly across from Barclays Center and Atlantic Terminal, is the first in Brooklyn, New York’s largest borough, with a population of roughly 2.6 million people.

CLS Holdings USA, Inc. will commence trading on the Canadian Securities Exchange, or CSE, at the opening of the market on January 7, 2019, under the ticker symbol “CLSH”. Cannabis Life Sciences is the developer of a patented extraction and conversion methodology that has the potential to increase both yield and quality of cannabinoid oils extracted from cannabis plants.

Harvest One Cannabis Inc. (TSX-V: HVT) (OTCQX: HRVOF) said that its shares of common stock were approved for trading on the OTCQX® Best Market operated by OTC Market Group.

Rubicon Organics Inc. (CSE:ROMJ) (OTCQX:ROMJF) said that its common shares are now trading on the OTCQX Best Market under the ticker symbol “ROMJF”.  Rubicon Organics’ common shares will continue to trade on the Canadian Securities Exchange under the ticker “ROMJ”.

Canopy Rivers Inc.  (TSXV: RIV) announced that its 49%-owned joint venture PharmHouse Inc. has entered into a syndicated credit facility with the Bank of Montreal, as agent and lead lender, and with Canadian Imperial Bank of Commerce and Concentra Bank as lenders. Under the terms of the Credit Facility, the Lenders will provide PharmHouse up to C$80 million of secured debt financing at a rate of interest that is expected to average in the mid-to-high 5% per annum range over its three-year term.

Dixie Brands Inc. (CSE: DIXI.U), one of the cannabis industry’s leading consumer packaged goods companies, has announced the hiring of two new marketing executives.  Andrew Floor joins as Vice President of Marketing, Dixie Brands, and Hilal Tabsh joins as Vice President of Marketing and Distribution, Aceso Wellness.


Debra BorchardtDebra BorchardtNovember 28, 2018
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MJardin Group

MJardin Group, Inc. (CSE: MJAR), reported financial results for its third quarter ended September 30, 2018. The company’s revenue increased 65.1% to $7.0 million versus last year’s $4.3 million. The company said that the revenue growth was driven primarily by facility design and build-out fees earned from GrowForce for cultivation centers, interest on notes receivable and rent income earned from Buddy Boy Brands.

Still, MJardin delivered a net loss of $0.4 million versus last year’s net income of $0.6 million. The company attributed the loss to higher interest expense, compensation and benefits, and higher legal and consulting fees related to recent acquisitions, equity and RTO transactions.

“We are pleased to report our first quarterly results as a publicly traded company, continuing our strong growth trends and positive EBITDA,” said Rishi Gautam, Chairman of MJardin. “This is a very exciting time for MJardin with this month’s public listing of MJardin shares and the announcement of the proposed acquisition of GrowForce. We believe we are well positioned as one of the largest and most experienced cannabis operators in North America and as the largest multi-national operator.”

At the end of the third quarter, MJardin was managing 37 total facilities/operations. The company’s total operating expenses jumped by 58.9% to $5.8 million over last year’s $3.6 million. MJardin said that the increase reflects increased compensation and benefits to support that growth, including increased grow facility personnel at operator facilities and the continued expansion of the company’s executive team and corporate office personnel.

Subsequent to the quarter ending, MJardin completed an equity capital raise for approximately C$26 million. On November 13, 2018, MJardin completed the reverse take-over of Sumtra Holdings. On November 15, 2018, the company began trading on the Canadian Securities Exchange and the $26 million of subscription receipt proceeds were released from escrow and available to the Company.

iAnthus

Following the market close on Tuesday, iAnthus Capital Holdings (CSE: IAN, OTCQB: ITHUF) reported its earnings for the third quarter of 2018 ending in September. The sales for the quarter were $939,098 with a gross profit of $2.6 million. The net loss for the three months ending September 30, 2018, was approximately $10.0 million.

“iAnthus continues to execute,” said CEO Hadley Ford. “The company has expanded its footprint and added to its industry leading-team while maintaining a prudent balance sheet throughout the process. We are now generating revenue in five of the six markets in which we operate, with a significant number of dispensaries expected to open within the next few months. Assets are up 344% year-over-year as we grow the iAnthus platform across the United States. This performance, combined with the outlook for our Massachusetts, New York and Florida operations and the pending acquisition of MPX, position us very well for 2019.”

iAnthus reported that its consolidated revenues for the company increased 101% quarter-over-quarter, increasing to $1,074,398 in Q3 from $533,545 in Q2, yet these figures didn’t appear in the company’s filing. The company also said in its press release that system-wide revenues, including the revenues from iAnthus’ investments in New Mexico and Colorado, were $5,139,769 in Q3, up 16% quarter-over-quarter from $4,415,368 in Q2. These figures are unaudited and are not consolidated by the company at present due to certain regulatory restrictions.

In a statement, the company reported that its cash balance is currently $24.3 million. As of November 26, 2018, the Company had 20,933,995 warrants outstanding, all of which are currently in the money. iAnthus would receive approximately $54.5 million if all outstanding warrants were exercised.

Charlotte’s Web

Charlotte’s Web Holdings, Inc. (CSE: CWEB, OTCQX: CWBHF) reported financial results for the third quarter ending September 30, 2018. Organic revenue growth of 57% to $17.7 million versus last year’s $11.3 million for the same time period. Net income fell to $1.8 million from last year’s $2 million for the same time period.

Gross profits increased 54% to $13.8 million over last year’s $9 million for the same time period. Earnings per diluted share fell to two cents from last year’s three cents for the same quarter.

“During the third quarter we completed a successful initial public offering and private placement that generated significant capital for the company that is being deployed to accelerate our growth in the hemp-derived CBD sector,” said Hess Moallem, President and Chief Executive Officer. “This capital is being used primarily to expand the company’s cultivation and production capacities to meet the increasing demand for our industry-leading Charlotte’s Web products, both domestically and internationally.”

The company’s statement said that on a year-over-year basis for the third quarter, e-commerce revenue grew by 37% and wholesale, distributor and retail revenue grew by 118%. Revenue from human nutrition products and animal nutrition products grew by 42% and 153%, respectively (canine products were introduced in February of 2017).



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