KushCo Archives - Green Market Report

Debra BorchardtMarch 31, 2021
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6min7700

Cannabis accessories e-commerce company Greenlane Holdings, Inc. (Nasdaq: GNLN)  reported financial results and announced a merger with KushCo sending the stock higher in early trading. Greenlane stock was up over 17% on news of the merger as the company missed revenue estimates for the fourth-quarter ending in December.

Net sales grew approximately 50.5% to $7.8 million, or 21.4% of total net sales in the fourth quarter versus $5.2 million or 13.8% of net sales in the fourth quarter of 2019. Core revenue grew 11.3% to $33.9 million in the quarter versus $30.5 million for the same time period in 2019. Greenlane missed the average analyst estimate which was for revenue of $36 million according to Yahoo Finance. Core revenue is defined as all non-nicotine revenue and Greenlane Brand revenue is inclusive of Eyce figures. The net loss for the quarter grew 8.9% to $10.8 million.

For the full year, total revenue was $138.3 million versus $185.0 million for the fiscal year 2019. The full-year 2020 core revenue (defined as non-nicotine revenue) grew 12.7% to $125.2 million versus $111.1 million in 2019. The net loss grew 19.8% to $47.7 million over last year’s net loss of $39.8 million. The decrease in sales was driven by a strategic decision to move away from sales of higher volume, lower margin merchandise to higher-margin revenue opportunities, including the Greenlane branded products.

“Though this year has been very challenging, I am incredibly proud of how the Greenlane team has aligned to accomplish all we have achieved in 2020,” said Aaron LoCascio, Greenlane’s Chairman and Chief Executive Officer. “Together, we successfully refocused our strategic efforts to grow our portfolio of owned brands, brought in new senior leaders, and took decisive steps to move away from lower-margin revenue categories that has positioned us for sustained, long term growth.”

Mr. LoCascio added, “As we enter 2021, Greenlane will continue to innovate and adapt to meet the demands of the rapidly evolving Cannabis industry by executing on our growth strategy. This includes continuing to improve our revenue mix with a focus on Greenlane branded products, further optimizing our organizational structure to reduce costs where appropriate and leveraging our best-in-class global distribution platform to launch innovative new products into the market. We have made great progress thus far, and recently announced our acquisition of the Eyce, the world leader in premium silicone smoking products and a Greenlane partner for over seven years.”

KushCo Merger

Along with the announcement of earnings, Greenlane also said it was merging with cannabis packaging company KushCo (OTC: KSHB). The exchange ratio is expected to result in KushCo stockholders owning approximately 49.9% of the combined company’s common stock and Greenlane stockholders owning approximately 50.1% of the combined company’s common stock. The company said the deal is expected to generate approximately $15 million to $20 million of annual run-rate cost synergies within 24 months from the closing.

KushCo’s Co-Founder, current Chairman, and Chief Executive Officer, Nick Kovacevich, will lead the combined company as Chief Executive Officer, and an Independent Chairman of the Board will be appointed at a later date. Greenlane’s Bill Mote will serve as Chief Financial Officer, with Greenlane Co-founder Aaron LoCascio serving as President and Greenlane Co-founder Adam Schoenfeld serving as Chief Strategy Officer. The combined company will be headquartered in Boca Raton, Florida with a significant footprint in Southern California.

“This transformative transaction is expected to create a broad and complementary platform that we expect to deliver substantial synergies at an important inflection point in the cannabis industry,” said Aaron LoCascio, Chief Executive Officer and Co-Founder of Greenlane. “As an industry leader, the combined company will be well positioned to grow profitability and maximize value for all stockholders while also providing enhanced product offerings and expanded ancillary services to our valued customer bases. We are thrilled to be working with the talented and experienced KushCo team, and together we will continue to drive innovation and excellence in the space. Since Greenlane’s founding in 2005, we have been at the forefront of the cannabis industry, and today we take the next step in our continued evolution.”

“We’re excited to create a leading, innovative supplier of cannabis ancillary products serving the most valuable segments of the supply chain,” said Nick Kovacevich, KushCo’s Co-founder, Chairman, and Chief Executive Officer. “For more than 10 years, KushCo has proudly pioneered this industry, creating substantial value for our customers, employees, partners, and stockholders. Now, we have reached a critical time in our industry where the leading operators are increasingly looking to partner with companies in the ancillary space who can reliably support their rapid expansion for years to come. We greatly admire the product portfolio that the Greenlane team has built, and we are excited to work with them to cross-sell to our complementary customer bases and execute on the attractive growth opportunities ahead.”


Debra BorchardtJanuary 12, 2021
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5min5530

KushCo (OTC: KSHB) stock was falling over 6% to lately sell at $1.11 after the company reported the numerous challenges affecting the company. After the market closed on Monday, KushCo announced financial results for its fiscal first-quarter ending November 30, 2020, with net revenue decreasing 23% from the prior-year period to $26.8 million. On a positive note, the net loss was trimmed to $4.5 million from $12.5 million in the prior-year period. The basic loss per share was $0.03 compared to $0.12 in the prior-year period.

Many of the company’s challenges stem from the decision to right-size the business, which resulted in tighter credit terms being extended to smaller and less creditworthy customers. In addition to that, the company faced problems at the ports, where increased shipments to the U.S. combined with fewer port workers due to COVID issues causing delays.

Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer said on the company’s earnings call, “We were expecting more significant growth in Q1, but like many other importers of goods, we were hit with unexpected and uncontrollable shipping delays due to record-breaking shipments to U.S. ports around the holiday season, which were exacerbated by COVID-19 restrictions.”

He went on to add, “This is a problem that has affected many importers, but fortunately, we have been working diligently with our network of freight partners and suppliers to expedite shipments and provide solutions to reduce the impact to our customers, which we expect will persist for another couple of weeks or more as the ports start to clear through the backlog that has been building up.

The net result of all of this is that some of the revenue that we were expecting to realize in Q1 has now been pushed into Q2 because we could not get the products off of the boat and into our warehouses on time before the quarter ended. The good news is that the business was not lost and it actually contributed to our strongest December in company history, December being the first month of Q2 and we saw $14.7 million in revenue during that month. And we still have a nice pipeline of business that we plan to execute on throughout the remainder of this Q2.” KushCo generated 21% gross margins for the quarter, which was lower than the 26% generated in the fourth quarter and was blamed on the shipping delays.

Looking Ahead

KushCo increased its net revenue guidance for its fiscal 2021 to be between $130.0 million and $160.0 million (previously between $120.0 million and $150.0 million). In addition, the company reiterated its expectation for adjusted EBITDA for the fiscal year to be between $5.0 million and $7.0 million. The company gave three reasons for the increased estimate. Kovacevich said, “We are continuing to see outsized growth with our MSO and LP customers as evidenced by our strong December and how we see the rest of the year panning out with some of the large custom projects we have in the pipeline. Number two, we have invested significantly in our sales team, bringing on folks from traditional CPG and other relevant backgrounds to nurture deep relationships with our top customers and to further penetrate our newer prospects. And number three, we are starting to secure a more long-term supply contracts, giving us better visibility into future business and acting like a right of first refusal for all of our products and services.”

The company also noted that it currently has $19 million due at the end of April 2021. CFO Stephen Christoffersen said on the earnings call, “We’ve been evaluating some term sheets and believe we can execute on an appropriate solution before the note is due, especially given the fact that we are now a profitable business that is more aligned with MSOs and LPs than ever before.”

KushCo also noted that if New Jersey and Arizona roll out programs, then revenue could be even higher this year. The company also said that uplisting to the NASDAQ is a priority, but that the process is somewhat out of their control.

 


Debra BorchardtSeptember 24, 2020
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3min11080

KushCo Holdings, Inc. (OTCQX:KSHB) reported preliminary and unaudited financial results for its fiscal fourth quarter ended August 31, 2020 with revenue expected to be between approximately $25.5 million and $26.0 million, compared to approximately $22.3 million in its fiscal third-quarter 2020. The company noted that this would be an improvement from its previously disclosed guidance of between $24.0 million and $26.0 million.

KushCo said that the 14% to 17% expected sequential increase in revenue is being driven primarily by an increase in sales to its top 100 customers, which consists of leading multi-state operators (MSOs), licensed producers (LPs), and brands. The company had pivoted earlier this year to a focus on its larger more financially stable clients versus trying to service smaller clients who might not be in a position to pay their bills. In addition, the company also said it expects adjusted EBITDA for the fiscal fourth quarter 2020 to be between $0.25 million and $0.75 million, which represents an improvement from its previously disclosed guidance of between ($1.0) million and $1.0 million.

“Fiscal Q4 2020 was arguably the most pivotal quarter in KushCo’s entire 10-year history, as we returned to growth, executed on our strategic plan, and achieved our first quarter of positive adjusted EBITDA in more than three years,” said Nick Kovacevich, KushCo’s Co-founder, Chairman, and Chief Executive Officer. “We realize there is still a lot of work to be done, but we are encouraged with the substantial progress we have made, especially when considering the challenging, but constructive, journey we underwent in fiscal 2020, starting with the illicit market vape crisis and culminating with the ongoing COVID-19 pandemic. Looking ahead, we will continue to focus on aligning deeper with-and cross-selling more to-the large and creditworthy MSOs, LPs, and leading brands, who appear more poised than ever to reap the lion’s share of the benefits from the industry’s next stage of expansion.”

Another bit of positive news was that KushCo ended the fiscal quarter and year with approximately $10.5 million in cash, and did not draw on its revolving credit facility during the fiscal quarter. The company said its expenses will probably remain in the same range (between $6.5 million and $7.5 million) as previously forecast.

KushCo said it expects to report its complete fiscal fourth quarter and full-year 2020 financial results in late October or early November 2020.

 


StaffJuly 8, 2020
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6min6600

It’s time for your Daily Hit of cannabis financial news for July 8, 2020. 

On the Site 

KushCo 

KushCo Holdings, Inc. (OTCQX:KSHB) reported that its net revenue dropped 46% in its fiscal third-quarter ending May 31, 2020. The net revenue of $22 million was also lower than what the company has forecast in March when it told investors that it would be roughly $30 million. Analysts according to Yahoo Finance had estimated that revenue on the low end would be $29 million. 

The company attributed the drop to the adoption of the 2020 Plan, which meant tighter credit terms being extended to smaller customers. the company is focused on larger, more financially healthier customers. 

In addition to that, the drop in revenue was also driven by lower sales from vape and natural products, as well as order lumpiness from KushCo’s larger customers. Compounding the quarter’s decision to tighten credit, COVID-19 caused travel and regulatory restrictions in the markets that the company operates. 

Conception Nurseries 

Tissue culture technology company, Conception Nurseries has raised more than $15 million with the addition of approximately $12 million in its Series A round. The company said that the proceeds would be used to operationalize its facility in Sacramento, CA. 

The raise was announced by Viridian Capital Advisors, who through broker-dealer, Pickwick Capital Partners, led the financing round. 

Massachusetts 

Adult-use stores in Massachusetts closed for business on March 24th and reopened on the 25th of May. Sales were significantly higher than usual in the two weeks leading up to the closing of the adult-use market’s retail stores in Massachusetts. The day before closing, March 23rd, sales spiked 60% because of customers trying to stock up before the lockdown.  

A new report issued by Nucleus One, a Massachusetts-based B2B cannabis company offering a variety of services, has reviewed the COVID-19’s impact on the state’s cannabis industry. 

In Other News 

Scythian Real Estate, a full-service real estate company that specializes in working with sophisticated, well-capitalized cannabis operators, today announced the acquisition of a 3,048-square-foot facility operated by Grassroots Cannabis in Bradford, Pennsylvania. Scythian purchased the recently renovated property at 109 Main Street from Grassroots Cannabis in a sale-leaseback transaction. 

“This is our third transaction with Grassroots, and we’re thrilled to continue building a strong relationship with such a well-respected leader in the cannabis market,” said Randy Roberts, partner at Scythian. “We look forward to identifying new opportunities to further position Scythian for long-term growth in limited-license states and other strategic markets in the U.S.” 

 

 

 


Debra BorchardtJuly 8, 2020
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5min11570

KushCo Holdings, Inc. (OTCQX:KSHB) reported that its net revenue dropped 46% in its fiscal third-quarter ending May 31, 2020. The net revenue of $22 million was also lower than what the company has forecast in March when it told investors that it would be roughly $30 million. Analysts according to Yahoo Finance had estimated that revenue on the low end would be $29 million.

The company attributed the drop to the adoption of the 2020 Plan, which meant tighter credit terms being extended to smaller customers. the company is focused on larger, more financially healthier customers.

In addition to that, the drop in revenue was also driven by lower sales from vape and natural products, as well as order lumpiness from KushCo’s larger customers. Compounding the quarter’s decision to tighten credit, COVID-19 caused travel and regulatory restrictions in the markets that the company operates.

Net losses increased to $13.5 million versus last year’s $10.6 million in the same time period for last year. The basic loss per share was $0.11 compared to $0.12 in the prior-year period. This also missed analysts’ estimates, which averaged at a loss of -$0.10.

Nick Kovacevich, KushCo’s CEO said, “We substantially reduced our cost structure, consolidated our vendors and warehouses, vastly improved our inventory to align with our actual sales, ramped up our collections activity, stemmed the cash burn, and drove meaningful operating leverage. Revenue for the quarter came in lower than we anticipated due to regulatory and travel restrictions in various markets in which we operate due to the COVID-19 pandemic, as well as order lumpiness from some of our larger customers who pushed out their orders due to a general lack of visibility in their businesses.”

The company said it finished the cost-cutting initiatives as part of the 2020 plan and as such the SG&A dropped more than 50% sequentially from $27.2 million in the second quarter to $12.7 million in the fiscal third quarter. The decrease was driven by reductions in headcount, executive salaries, consulting spend, and travel and entertainment expenses, as a result of the COVID-19 pandemic.

“Despite the sequential decline in revenue, however, we have started Q4 on the front foot with a healthy level of purchase orders secured thus far, leading us to believe that Q3 will be the bottom in terms of revenue for fiscal 2020,” said Kovacevich. “More importantly, we continue to focus on the things we can better control, such as gaining more efficiencies in our business, significantly right-sizing the organization, and reducing our overall cash burn.”

Balance Sheet Moves

The company strengthened its balance sheet and liquidity by proactively converting 18.5%, or $5 million, of the total principal amount of the Company’s senior note due April 2021 into equity with limited dilution and zero warrants. Cash was approximately $11.1 million as of May 31, 2020, compared to approximately $11.4 million as of February 29, 2020, and $3.9 million as of August 31, 2019.

Looking Ahead

KushCo said it expects net revenue for the fourth quarter of its fiscal 2020 to be between $24.0 million and $26.0 million. In addition, the company said it expects cash SG&A to be between $6.5 million and $7.5 million, and adjusted EBITDA to be between ($1.0) million and $1.0 million.

“Looking ahead, we expect to realize revenue growth in Q4 not just by recognizing the customer orders that were pushed out, but also by signing additional supply agreements with our customers and focusing more on the areas that we believe we are good at, such as our core businesses of vape, packaging, and energy,” said Kovacevich. “We are also going to be focusing even more on controlling our costs and deploying a prudent capital allocation policy, so that we can continue to support the business with the cash and liquidity resources currently at our disposal. The end result of these efforts should lead to what could be a pivotal Q4 for KushCo, and one in which we can achieve our goal of positive adjusted EBITDA.”

KushCo stock moved higher by 10% on the day’s trading ahead of the earnings announcement and was lately selling at $0.82 . The average analyst price target is $2.50.

 


Debra BorchardtMarch 13, 2020
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5min9740

KushCo Holdings, Inc. (OTCQX:KSHB) rolled back its original revenue estimates due to supply chain interruptions from China and continued weakness in the California market. The cannabis package maker said that it now expects its second-quarter revenue to be closer to $30 million versus the original forecast of $35 million.

The company is taking back its net revenue guidance for fiscal 2020 of $230 million to $250 million, which was originally issued on November 7, 2019. KushCo did not give a new number. Results are expected to be formally announced in April, but a specific date was not given. KushCo also said it was taking back its forecast that net revenue from its hemp trading business would exceed $25 million for fiscal 2020.

KushCo said it has approximately $11 million in cash and a revolving line of credit with Monroe Capital that allows for borrowings up to $35 million. As of the fiscal second quarter ended, the company said it did not have any outstanding borrowings under the revolver.

Fiscal Second Quarter 2020 Preliminary Revenue Results

The company said that the 14% sequential decrease in revenue was “driven primarily by a slower-than-expected rebound in demand for the Company’s vape hardware products, continued weakness in the California market, a slower-than-anticipated rollout of its hemp trading business, the extension of the Chinese New Year holiday, and a delay in the rollout of cannabis 2.0 products in Canada, especially due to some provincial bans and taxes on vape products.”

“Our revenue for fiscal Q2 was negatively impacted by several short-term factors, but we are fortunately seeing strong fundamental trends across the business that give us confidence for a stronger second half of the fiscal year and beyond,” said Nick Kovacevich, KushCo’s Co-founder, Chairman and Chief Executive Officer. “For one, despite a challenging near-term market backdrop in California, we have been actively tightening our customer credit terms, ramping up our collection efforts, and continuing to move away from the smaller and less financially stable customers that historically comprised a core part of our business.”

He continued saying, “In fact, over the past few years, this regional customer base, especially in recent months due to their heightened liquidity challenges, is gradually comprising a smaller part of our business, whereas our business with our larger MSOs and LPs, which each spend more than $500,000 on a trailing twelve months basis, has ballooned from less than 20% of sales in fiscal 2017 to more than 60% in fiscal 2019. While it will take some time for this transition to fully scale, we are encouraged with the progress thus far in securing and entrenching ourselves even further with these larger and more financially stable customers.”

In February 2020, KushCo completed another round of layoffs, letting go, 26 employees, which the Company expects will result in approximately $3.7 million in annual savings. In total, KushCo has reduced its headcount by approximately 30% since September 2019, which it expects will result in an aggregate annual savings of approximately $8 million

Vape Stays Flat

“With respect to the broader demand for our vape products, we were disappointed to see a roughly flat quarter-over-quarter contribution from this category, but are encouraged with the underlying trends in our business that show continued robust growth in many of our key markets, such as Illinois, Michigan, Massachusetts, and Canada,” said Kovacevich. “As consumer sentiment and the regulatory environment around vape continues to improve, we expect this category to rebound and drive our revenue growth as well.” The company did say, however, that it has seen an uptick in orders for vape products from Canada.

Supply Chain Disruptions

“With the recent coronavirus outbreak, our business was briefly and minimally affected by temporary factory shutdowns, production delays and product shortages,” said Rodrigo de Oliveira, KushCo’s Chief Operating Officer. “Fortunately, we entered Chinese New Year with healthy inventory levels, whereas some of our peers who don’t have the same scale, resources, supplier relationships, or inventory quickly ran out of product. Overall, we’re pleased to see the situation slowly improving and for new shipments to make their way into our warehouses again, from which we can accelerate our sales again.”

 

 

 

 


Debra BorchardtNovember 8, 2019
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4min10360

KushCo Holdings, Inc. (OTCQX:KSHB)  reported that its net revenue increased 135% year-over-year to $47.0 million for its fiscal fourth-quarter ending August 31, 2019. On a GAAP basis, the net loss was approximately $11.5 million versus last year’s $3.2 million for the same time period. Basic and diluted loss per share was $0.13 compared to $0.04 in the prior-year period. On a Non-GAAP basis, the net loss for the quarter was $7.2 million and basic and diluted net loss per share was $0.08.

“Over the past couple of months, KushCo and the entire regulated cannabis industry has been dealing with a vaping crisis that increasingly appears to be connected to counterfeited, adulterated, and untested vape products being sold in the black market, which we do not service,” said Nick Kovacevich, Co-founder, Chairman and Chief Executive Officer. “While we have been seeing a slight pullback in sales for the overall vape market, it’s important to note that we service the entire regulated cannabis and CBD sector, and as a result, benefit from some consumers potentially shifting to other form factors, such as flower, edibles, and pre-rolls. That being said, we believe there will be some topline softness in the first half of fiscal 2020 related to vape, as our customers have been more cautious with their spending and have been slowing down their vape purchasing activity to limit any potential inventory or regulatory risk should there be additional temporary state bans affecting vape product sales. Looking out to the second half of fiscal 2020, we expect orders for vape products to pick up again.”

For the full year, the company said its net revenue increased 186% to $149.0 million, which met the company’s previously issued guidance of between $145.0 million and $150.0 million. net loss was approximately $39.6 million, compared to a net loss of approximately $24.3 million in the prior year. The basic and diluted loss per share were $0.47 and $0.57, respectively, compared to $0.37 in the prior year.

KushCo said its cash was at roughly $3.9 million as of August 31, 2019, compared to approximately $13.5 million as of August 31, 2018. The Company secured a revolving credit facility with Monroe Capital for up to $50.0 million on August 21, 2019, and completed a $30.1 million equity offering on September 26, 2019, with total net proceeds of $27.6 million.

Looking Ahead

Kovacevich added, “We are currently targeting between $230 million and $250 million in revenue for fiscal 2020. That includes growth from our core business and added $25 million-plus from our new hemp and CBD initiatives. This guidance incorporates a softer first half as it relates to vape sales, but these sales do ramp up significantly in the second half of the fiscal year. And with these top-line factors in mind, along with the efforts to tighten the belt with operational expenses, we believe we can achieve adjusted EBITDA profitability in the back half of fiscal 2020.”


Video StaffOctober 2, 2019

1min10000

With over 400 publicly traded cannabis companies and billions of dollars at stake, brands can’t afford to make mistakes when it comes to how the public perceives them. Anne Donohoe of NY-based public relations firm KCSA leads a panel taped at the Green Market Summit on September 11, 2019 in Los Angeles reviewing the differences of working with publicly traded companies including managing good and bad news. Panelists included Jason Vegotsky, CRO KushCo Holdings, Brandy Gray, CEO Urth Capital Advisors, BJ Caretta, Caretta Consulting.


William SumnerJuly 10, 2019
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4min9980

It’s time for your Daily Hit of cannabis financial news for July 10, 2019.

On the Site

Canaccord Genuity Increases Its Long-Term Growth Outlook for U.S. Cannabis

Analysts with Canaccord Genuity (CG) have increased their 2019 to 2022 long-term growth outlook for the U.S. cannabis industry from 19% CAGR to 20%. According to the report, the modest increase was attributed primarily to increased expectations for Illinois’ adult-use market, as well as recent positive trends in the Nevada and Massachusetts market.

Gotham Green

Gotham Green Partners, with participation from Wicklow Capital, has agreed to an additional $30 million in an equity commitment to MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF), bringing the total financing commitment to $280 million. To date, Gotham Green Partners has funded $100 million of the total commitment.

KushCo

KushCo Holdings, Inc. (OTCQX: KSHB) announced its financial results for the third quarter ending on May 31, 2019, after the market closed on Tuesday. Net revenue was $41.5 million, representing a quarter-over-quarter increase of 17.9%.On a GAAP basis, gross profit was 17.8%. On a GAAP basis, the net loss was $10.6 million, up from $9.2 million in the same period of the previous year.

Extractors Celebrate Their 710 Holiday – Dab Day

Extractors get their own holiday every year. July 10, also known as 7/10 has been fondly named “Dab Day” within the cannabis community. Spelling “OIL” when flipped upside-down, 7/10 is the day when cannabis concentrates and extracts are celebrated, and sales data is showing that cannabis consumers are eagerly participating in the celebration.

In Other News

GrowGeneration Corp.

GrowGeneration Corp. (OTCQX: GRWG) announced today that former Home Depot CEO, Bob Nardelli, will join the company as a strategic advisor, providing advice to the company’s CEO and Board of Directors on matters related to supply chain, merchandise, branding, distribution, new product introductions, pricing and channel selection. “Bob is a globally recognized business visionary.  He comes with a strong track record of executive operations to generate accelerated, profitable growth and shareholder value across many industry verticals that are of great interest to us,” said GrowGeneration CEO Darren Lampert.

Veritas Pharma

Veritas Pharma Inc. (CSE: VRT) (OTC: VRTHF) (Frankfurt: 2VP) announced that it has sold its 50% interest in 3 Carbon Extractions to Yari Nieken for $375,000. According to interim CEO Peter McFadden, the sale of its interest is part of the company’s wider restructuring efforts. “The sale of our interest in 3 Carbon was taken as part of the restructuring of the Company with aims to consolidate and focus the Company through assets that directly contribute to the advancement of our mission. Currently neither our research nor our operations aligned with our interest in 3 Carbon,” McFadden said.


StaffJanuary 22, 2019
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8min10900

It’s time for your Daily Hit of cannabis financial news for January 22, 2019.

On The Site

Tilray, Inc. (TLRY) has entered into an agreement to acquire all of the issued and outstanding securities of cannabis cultivator Natura Naturals Holdings Inc. in a deal valued at $35 million, but could ultimately grow to $70 million.

Under the terms of the agreement, Tilray will deliver C$35 million at closing. This will be made up of C$15 million in cash and C$20 million in Tilray Class 2 common stock. The statement said that if  Natura reaches certain quarterly production milestones over the following twelve-month period, up to C$35 million of Tilray common stock may become payable resulting in a total purchase price of C$70 million if fully achieved.

In Other News

KushCo Holdings, Inc. (OTCQB: KSHB) closed a registered direct offering of 6,476,190 shares of common stock and warrants to purchase 3,238,095 shares of common stock with a combined purchase price of $5.25 per share on January 18, 2019.  The warrants have an exercise price of $5.75 per share, are immediately exercisable and will expire five years from the date of issuance. The gross proceeds of the offering are approximately $34,000,000 before deducting placement agent fees and other estimated offering expenses. The Company intends to use the net proceeds for general corporate purposes, including, among other things, working capital, product development, acquisitions, capital expenditures, and other business opportunities.

Harvest Health & Recreation Inc. (CSE: HARV, OTCQX: HTHHF) is trading on, the OTCQX Best Market. Harvest Health & Recreation (Harvest) upgraded to the higher visibility OTCQX Best Market and is trading under the symbol “HTHHF.”

Village Farms International, Inc. (TSX: VFF) (OTCQX: VFFIF) announced that it has filed an application to list its common shares on NASDAQ Capital Market under the symbol “VFF”. Village Farms’ common shares will continue to be listed on the Toronto Stock Exchange (TSX), also under the symbol “VFF”.

Flower One Holdings Inc. (“Flower One” or the “Company”) (CSE: FONE) (OTCQB: FLOOF) announced a new licensing agreement and Brand Partnership for cannabis-product fulfillment in Nevada with California-based, Old Pal, the popular lifestyle cannabis brand that offers the most affordable legal cannabis in the state of California. Flower One is now licensed to produce, manufacture and distribute the entire Old Pal product line to Nevada’s 130 cannabis retailers, marking Old Pal’s first out-of-state expansion and entry into the Nevada market.

Canopy Rivers Inc. (TSXV: RIV) completed an equity investment in 10663522 Canada Inc., or “Herbert”, a unique brand platform that focuses on the adult-use cannabis beverage and edibles market. Canopy Rivers subscribed for C$1,500,000 of preferred shares in Herbert, and received incremental warrants entitling the Company to increase its economic interest in Herbert under certain circumstances, as well as other governance-related rights.

CannaRoyalty Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF) announced that its wholly-owned subsidiary, CRHC Holdings Corp., has completed the sale of 51% of its 10% equity stake in Bodhi Research & Development Inc. to Green Relief Inc. Pursuant to the previously disclosed agreement, Green Relief has purchased from CRHC and other vendors, 51% of all outstanding common stock of Bodhi Research. As consideration for the Share Purchase, Green Relief has paid CRHC $1.74 million in Green Relief common shares.

 


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