The company will cut an additional 21% from its staff.
The company will cut an additional 21% from its staff.
The Daily Hit is a recap of cannabis business news for Nov. 10, 2022.
Tyson 2.0 Creates Parent Company with Ric Flair
TYSON 2.0, legendary boxer, entrepreneur and cannabis advocate Mike Tyson’s premium cannabis brand, and Ric Flair Drip, world-renowned pro-wrestler Ric Flair’s cannabis line, announced that they are joining forces under a new parent company, Carma Holdings LLC. Additionally, TYSON 2.0’s board of directors will transition to Carma, with the announcement of the addition of attorney Alex Spiro. Read more here.
Aurora Cannabis Flexes Tightened Balance Sheet Even as Sales Fall
Canadian cannabis giant Aurora Cannabis Inc. (Nasdaq: ACB) (TSX: ACB) saw fiscal first-quarter net revenue for medical cannabis fall 23% year-over-year to C$36.6 million, and down 14% over the quarter, while adult-use cannabis revenue fell 28% year-over-year to C$13.7 million. Read more here.
Glass House Brands Delivers on Optimistic Q3 Forecast
Glass House Brands Inc. (NEO: GLAS.A.U, GLAS.WT.U) (OTCQX: GLASF, GHBWF) set big expectations for the third quarter – and then promptly delivered. The vertically integrated operator reported revenue of $28.3 million for the quarter, up 72% versus the second quarter and up 65% from the same period a year ago. Read more here.
Leafly Revenue Edges Up, Even After Steep Layoffs
Stock for Leafly Holdings Inc. (Nasdaq: LFLY) was up 6% on Thursday after the bell, when the company reported financial results for the third quarter showing revenue in line with expectations. Revenues totaled $11.8 million, up 8.1% over the third quarter last year, in line with Yahoo Finance’s average analysts’ estimate of $11.75 million. Read more here.
Colorado Green Lights Certain Psychedelics with a Slim Victory
Voters in Colorado passed a ballot initiative that would permit adults 21 and older to possess certain psychedelics and create a framework for state-licensed psilocybin “healing centers.” With 88% of the vote counted, Proposition 122 garnered 51.4% of the votes, a margin it maintained throughout Wednesday. Read more here.
Additional earnings announcements:
Silver Spike Investment Corp.
Silver Spike Investment Corp., a specialty finance company that was formed to invest across the cannabis ecosystem through investments in the form of direct loans to, and equity ownership of, privately held cannabis companies, today announced that for the three months ended Sept. 30, total investment income was $1.2 million. Read more here.
Charlotte’s Web Holdings
Charlotte’s Web Holdings Inc., the market leader in cannabidiol hemp extract wellness products, announced a new distribution agreement with Stark Foods International, a distributor of European specialty food and beauty products to grocery and retail. In total, Stark Foods reaches nearly 15,000 doors through its multi-broker network. Read more here.
Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) (FSE: 3LP), a cultivator, manufacturer, and provider of cannabis products in the U.S., opened Cannabist Carytown in Richmond, the company’s 85th active dispensary nationwide and fifth in Virginia. The company plans to open 12 dispensaries in the state. Read more here.
The platform continued to grow its user base.
The Daily Hit is a recap of cannabis business news for Oct. 19, 2022.
Circle K Owner Doubles Down on Cannabis Bet in Florida
Florida medical marijuana patients might soon have the option to buy their medicine from a gas station next year. Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) said on Wednesday that it struck a deal with Alimentation Couche-Tard Inc. to start selling cannabis via Circle K convenience stores. Read more here.
Tilray Bullish on Alcohol as Cannabis Profits Shrink
As the cannabis sector hangs by threads, one company is riding the ethanol tide in search of higher margins. Tilray Brands Inc. (Nasdaq: TLRY) said its Breckenridge Distillery will partner with Anheuser-Busch-owned Breckenridge Brewery on a barrel-aged beer and beer-aged whiskey under the banner Buddy Pass. Tilray executives said that they remained bullish on the alcohol sector, as the business segment generated $20.7 million, rising 34% versus the prior year quarter. Read more here.
Leafly Cuts 21% of Staff in Quest to Cut Costs
Leafly (Nasdaq: LFLY), an online cannabis information resource and marketplace, announced Tuesday that it would cut 21% of its workforce as part of new cost-saving measures. Overall, annual cash savings are expected to be $16 million beginning in 2023, primarily due to reduced headcount. Read more here.
Layoffs Mark Next Stage of Cannabis Industry Cutbacks
As of January 2022, cannabis supported 428,000 full-time jobs in America. That equates to more than 107,000 jobs added in 2021, according to the 2022 Jobs Report from Leafly. While that marks the fifth year of industry job growth above 27%, 2022 might break that trend, as cannabis companies have been shifting gears and tightening budgets to boost bottom lines – including cutting staff. Read more here.
Local Modiv Fights Back Against Jersey City Denial
A legal battle is heating up in Jersey City, New Jersey after the applicant Local Modiv was denied a cannabis license. Both Local Modiv and Jersey City filed briefs filed last week in Hudson County Superior Court according to Law 360. In its brief Local Modiv claimed that the CCB (Cannabis Control Board) abused its authority by reviewing Plaintiff’s application for “proof of local support” based on factors that it claimed were completely inapplicable. Read more here.
Green Organic Dutchman/BZAM
The Green Organic Dutchman (OTC: TGODF) shares popped on the news that it bought privately owned Canadian-based BZAM Holdings (BZAM) in an all-stock deal. BZAM shareholders will end up holding roughly 49.5% of the combined company. The deal is expected to close on Nov. 8, 2022. Read more here.
NewAge Inc. (formerly known as New Age Beverages Corp.)
The Securities and Exchange Commission filed charges against Brent David Willis, the former chief executive officer of NewAge Inc. (formerly known as New Age Beverages Corp.), alleging that Willis engaged in a multiyear fraud by disseminating numerous false and misleading press releases and making false public statements concerning NewAge’s business dealings. Read more here.
AmeriCann Inc., a cannabis company that develops state-of-the-art cultivation, product manufacturing, and distribution facilities, reported a significant increase in year-over-year revenue, climbing more than 44% for the fiscal year ending Sept. 30, 2022, compared with the prior year. Read more here.
Annual cash savings are expected to be $16 million beginning in 2023, primarily due to reduced headcount.
Amid several waves of layoffs, cannabis companies are shifting gears and tightening budgets to boost bottom lines.
The Daily Hit is a recap of cannabis business news for August 11, 2022.
Cannabis Consumption on Track to Beat Alcohol
As talks revolving around the federal legalization of cannabis splinter in Congress, the question of whether cannabis can eat beverage alcohol’s margins remains a growing one. In a report, titled, “Is Cannabis a Threat to Alcohol Sales?” BDSA Consumer Insights contends that while the crop is as popular as ever, any real breakthrough of consumer participation in adult-use and medical markets remains stymied in D.C. – casualties of political animosity and procedural acrobatics aimed at slowing progress. Read more here.
Akerna Misses on Revenue, Bookings Down
Akerna Corp. (Nasdaq: KERN) posted less than positive results as it missed expectations — showing that mixed demand and weaker sales are rippling through the sector. The cannabis tech firm released its second-quarter financial report card ending June 30, 2022. Read more here.
Aleafia Watches Revenues Rise in Canada, Looks Across the Pond
Aleafia Health Inc. (OTCQX: ALEAF) delivered positive results on Thursday as it continues to cut costs and find more profit in the Canadian legal market and overseas. The Canadian cannabis company reported its financial results for the three months ending June 30, 2021. Aleafia Health releases its financial report card on a 15-month fiscal year with five quarters versus a standard 12-month year with four quarters. Read more here.
Goodness Growth Beats on Revenue, Sees Sales in Emerging States
Goodness Growth Holdings, Inc. (CSE: GDNS) (OTCQX: GDNSF) posted positive results on Thursday — driven by new retail store sales and new regulatory changes in nascent state markets. The multi-state cannabis company reported financial results for its second quarter ended June 30, 2022. Read more here.
Why Psychedelic Cannabis is a Thing Now
The idea of a cannabis product creating a sort of psychedelic experience is not a new one. There was a prevailing, fictional description back in the early part of the last century—encouraged by the 1936 film “Reefer Madness”—where people feared that was what all cannabis did. It freaked you out. Caused you to do unspeakable things. Run amok. Destroy property. Read more here.
Leafly Holdings, Inc.
Leafly Holdings, Inc. (NASDAQ: LFLY), an online cannabis discovery marketplace and resource for cannabis consumers, today announced financial results for its second quarter ended June 30, 2022. “Revenue in the quarter was $12.1 million, up 13.8% over Q2 last year, and up 5.5% over Q1 as we continue to build on the investments we’ve made in the first half of this year.” Read more here.
Clever Leaves Holdings Inc.
Clever Leaves Holdings Inc. (Nasdaq: CLVR, CLVRW), a multinational operator and licensed producer of pharmaceutical-grade cannabinoids, is reporting financial and operating results for the second quarter ended June 30, 2022. All financial information is provided in US dollars unless otherwise indicated. Read more here.
Forian Inc. (Nasdaq: FORA), a provider of technology, analytics and data science driven solutions for the healthcare and cannabis industries, today announced results for the quarter ended June 30, 2022. Read more here.
Schwazze, (OTCQX: SHWZ) (NEO: SHWZ), today announced financial results for the second quarter ended June 30, 2022. Revenues of $44.3 million increased 44% compared to $30.7 million in second quarter ended June 30, 2021. Read more here.
CEA Industries Inc.
CEA Industries Inc. (NASDAQ: CEAD, CEADW) a company in controlled environment agriculture (CEA) systems engineering and technologies, is reporting results for the three months ended June 30, 2022. Read more here.
Agra Ventures Ltd.
Agra Ventures Ltd. (CSE: AGRA) (Frankfurt: PU31) (OTCPK: AGFAF), a growth-oriented and diversified company focused on the international cannabis industry, announced that its Board of Directors has approved the Company’s issuance of 240,420 common shares at a deemed price of approximately $0.12 per Share as payment of the portion of the quarterly amount of interest due in Shares on a loan entered into in December of 2020. Read more here.
Ayr Wellness Inc.
Ayr Wellness Inc. (CSE: AYR.A, OTCQX: AYRWF), a vertically integrated U.S. multi-state cannabis operator, announced that the Massachusetts Cannabis Control Commission (CCC) has granted a final license for adult-use cannabis at its Sira Naturals dispensary in Somerville. The company also received approval to open the first phase of its cultivation expansion in Milford, Massachusetts. The CCC voted to approve both measures during its meeting on August 11, 2022. Read more here.
Cookies today announced its in Florida’s medical cannabis market with the opening of Cookies Miami, the brand’s 52nd dispensary, in a location convenient to the airport and downtown. The new 3,100 square-foot location will host a unique menu featuring Cookies’ highly sought-after genetics and custom Cookies SF local reserve merchandise. Read more here.
Christina Lake Cannabis Corp.
Christina Lake Cannabis Corp. (CSE: CLC) recapped its second quarter financial results for the six-month period ended May 31, 2022. All amounts are expressed in Canadian dollars unless otherwise noted. Read more here.
Allied Corp. (OTCQB: ALID), as a part of the previously announced export approval of 7100kgs of Colombia-grown cannabis, Allied has today shipped 1728kgs to Switzerland. This will be followed by 1500kgs weekly until the 7100kg threshold is met. Read more here.
Pyxus International, Inc.
Pyxus International, Inc. (OTC Pink: PYYX), a global value-added agricultural company, today announced results for its fiscal quarter ended June 30, 2022. Read more here.
Reunion Neuroscience Inc.
Reunion Neuroscience Inc., (formerly, Field Trip Health Ltd.) (TSX: FTRP, Nasdaq: FTRP) and Field Trip Health & Wellness Ltd. announced the closing of the plan of arrangement spinout transaction, including the corporate reorganization effected thereby, effective August 11, 2022. Pursuant to the arrangement, holders of common shares of the company exchanged their company shares for one new common share of the company and received 0.85983356 of a Field Trip H&W common share. Read more here.
Leafly Holdings, Inc. (NASDAQ: LFLY) announced financial results for its second quarter ending June 30, 2022. with revenue rising 13.8% to $12.1 million over last year’s $10.5 million for the same time period. Leafly attributed the increase to growth in retailer and brand revenues. The company reported a net income of $14.8 million, which included $24.4 million of gains on derivative liabilities, compared to a net loss of $1.3 million for the same quarter last year.
“Revenue in the quarter was $12.1 million, up 13.8% over Q2 last year, and up 5.5% over Q1 as we continue to build on the investments we’ve made in the first half of this year. We released several new enhancements that drive consumer engagement and differentiation. In addition, we’re also bringing more tools, greater flexibility, and reduced friction to retailers and brands, creating a seamless experience between consumers and our supply partners,” said Yoko Miyashita, CEO of Leafly. “Our investments to date have positioned us for long-term growth as the industry continues to evolve at a rapid pace, leaving significant opportunity in our path. Despite the uncertainties of the current macro-economic environment, we remain committed to maximizing efficiencies and prioritizing projects that will result in the highest returns.”
During the quarter, all licensed dispensaries in New Jersey subscribed to the Leafly platform and published their menus, giving residents a single platform to shop the menus of every legal dispensary in the state. In many cases, residents can place an online order for in-store pickup. New Jersey began legal adult-use sales in April.
“We made progress in the quarter on our long-term objectives. Concurrently, we have encountered challenges in our less mature markets and seen signs that customers are more cautious with their ad budgets,” said Suresh Krishnaswamy, CFO of Leafly. “We remain focused on our execution and managing our expenses carefully.”
Year over year, ending retail accounts grew, and ARPA (average revenue per account) declined, as a result of Leafly’s strategy to lower entry point subscription fees in order to rapidly expand in lower penetrated markets. Monthly average users or MAUs increased quarter over quarter, highlighting the strength of news and learn content, technical improvements to SEO and the Company’s expertise in the cannabis category. In Q2 2021, MAUs reflected an increase in user traffic primarily as a result of the pandemic.
Leafly noted that during the second quarter, it began to see some macro-economic impacts on the business, with signals from retailers and multi-state operators that their advertising budgets are under scrutiny. The company said, “In light of the current macroeconomic environment, we are taking a more conservative view of the second half of the year and are taking steps to manage the business accordingly. We are implementing plans to reduce operating expenses and have implemented a hiring freeze.”
For the full year of 2022, Leafly said it expects revenue to be in the range of $48.0 million to $51.0 million, representing 15% growth over 2021 at the midpoint. “We expect Adjusted EBITDA loss to be in the range of $28.5 million – $26.0 million.”
The U.S. economy gained 467,000 jobs in January 2022 according to the US Bureau of Labor Statistics, which is down by 2.9 million since February 2020. In brighter news for cannabis, Leafly’s (NASDAQ: LFLY) sixth annual Cannabis Jobs Report (developed in partnership with Whitney Economics) reveals that the legal cannabis industry added 107,059 new jobs in 2021 and is poised to hold on to its distinction in 2022 as the most prolific job creator in America. According to the report, as of January 2022 there are now 428,059 full-time equivalent jobs supported by the legal cannabis industry in the United States. This figure does not include employment in hemp, unregulated products made with hemp cannabinoids like delta-8 THC or “induced jobs”, aka jobs created by the wages paid to cannabis workers.
The cannabis industry’s ranking as America’s number one job creator is not a new and surprising development. In fact, the industry has seen an annual job growth rate higher than 27% for five years running, with promising future gains as big adult-use markets in states like New Mexico and New York prepare to come online in the months to come. In comparison with the entire financial sector, which added 145,000 jobs last year, and construction, which has been seeing steady gains in states like Colorado and added 165,000 jobs coast-to-coast, the legal cannabis industry is indisputably the United States’ leading job-maker, particularly in California, where it provides 83,407 jobs, and Colorado, where it provides 38,337 to date.
Sales of cannabis products in adult-use and medically legal states are up more than $6 billion dollars from the previous year, necessitating more willing and skilled workers at every point on the development, production, and sales continuum. But the legal cannabis industry is not immune to the larger problem plaguing the economy right now, which is the difficulty of finding and attracting sufficient workers to fill those jobs. In 2021, the legal cannabis industry created more than 280 new jobs every day, but employers across sectors are struggling to staff their businesses, particularly in the hourly wage jobs. Job growth and employment rates are not syncing up in predictable ways, even for the bullish cannabis industry.
Cannabis job growth rates, while expected to remain robust, will falter somewhat in 2022 according to the Leafly and Whitney Economics’ forecast. Constricted medical schemes, state regulations, the growth of illicit markets and the slowing of more mature markets are all contributing factors to this likely deceleration. Still, studies have allowed researchers to identify and predict market trends and patterns, including the surge of growth that typically occurs two to five years after the opening of a state’s adult-use stores. This currently includes Massachusetts, Illinois, and Michigan, while Arizona’s recreational market, for example, is still in its infancy and can be expected to post higher numbers in a year or more.
Overall, the Leafly’s report paints a rosy picture for cannabis jobs in the U.S., if less evenly so in the coming year. Whether hiring rates are able to keep pace with the demand for workers, however, remains an open question across every sector of the U.S. economy.
Online cannabis company Leafly Holdings Inc. and Merida Merger Corp. I (NASDAQ: MCMJ), a SPAC (special purpose acquisition company) sponsored by Merida Capital Holdings, closed their previously announced business combination on Friday. In connection with the closing, Merida has adopted the Leafly name, and Leafly’s common stock will begin trading on the NASDAQ Stock Market on February 7, 2022, under the ticker symbol “LFLY.”
The deal looked like it might be facing trouble when in January when Merida’s special meeting to vote on the proposed business combination, was postponed to give Merida stockholders sufficient time to evaluate the terms of the note financing and certain additional information. Merida had announced in August that it had chosen Leafly as its qualifying transaction for the SPAC. The combined company’s transaction values at an implied, fully diluted enterprise value of approximately $385 million and equity value of approximately $532 million, subject to any redemptions by Merida stockholders. The company is projecting revenue of approximately $43 million in 2021 and $65 million in 2022, representing a roughly 52% annual growth with gross margins of roughly 88% as Leafly further penetrates current markets and capitalizes on its strong position in the newly legalized East Coast.
“Backed by substantial funding, tremendous advancements in cannabis legalization, and e-commerce tailwinds, we are relentlessly focused on investing in our technology, talent, and content to execute our growth strategy and create value for all stakeholders,” said Yoko Miyashita, Chief Executive Officer of Leafly. “Becoming a public company is an important milestone for the entire Leafly team and we thank Merida for their continued support and look forward to working with them and future shareholders to achieve new heights.”
Leafly reported a significant acceleration in year-over-year revenue growth and gross margin, as well as a 40% increase in total ending retail accounts, in the third quarter of 2021. Leafly has introduced new value-driving tools for brands subscribers and enhanced its iPhone and iPad app to enable users to place pickup orders for cannabis products in legal state markets. The Company has also announced a post-combination Board of Directors with wide-ranging expertise and bolstered its executive leadership team with highly experienced hires for Chief Financial Officer, General Counsel, SVP of Sales, and SVP of Engineering.
Peter Lee, former President of Merida Merger Corp. I who will continue to serve as a member of the board of directors of the combined company, said, “Leafly has long been a critical resource in the cannabis ecosystem. With its three-sided marketplace and unparalleled content library, Leafly makes cannabis understandable and accessible for consumers, retailers, and brands alike – driving an incredible flywheel effect and tremendous brand loyalty across the country. Now, with an experienced management team and substantial funding, Leafly is poised to take the next step in its journey, and we are excited to continue to play a role.”
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Psychedelic Therapy Industry Reels After Major Clinic Closures https://t.co/KOZjYixYWb
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