Lowell Farms Archives - Green Market Report

StaffAugust 31, 2021
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6min7000

Lowell Farms

Lowell Farms Inc.  (CSE: LOWL)(OTCQX: LOWLF) reported that it has completed an $18 million non-brokered private placement of common equity. Proceeds will be used for working capital purposes, automation investments, and expansion into new markets. Company insiders bought an aggregate of 2,900,000 Units and the units were priced at $1. Shares were lately selling at $1.18.

“We are grateful for the support of our investors who share our conviction and excitement in our mission to capture an enormous market opportunity in front of us,” said George Allen, Chairman of Lowell Farms. “This financing allows the Lowell Smokes brand, one of the strongest cannabis brands in the country, to expand geographically and increase scale in its home state of California.”

BeLeaf Medical

AFC Gamma, Inc. (NASDAQ: AFCG) today announced it has provided a credit facility of $23 million to Missouri operator BeLeaf Medical, LLC. The credit facility is designed to provide BeLeaf with the capital necessary to expand its three Missouri cultivation facilities in Lakefront, Jonesburg and Cherokee, as well as purchase the Jonesburg cultivation facility. The Company has nearly completed construction on ~25,000 square feet of canopy between its locations and plans to add an additional ~16,000 square feet.

“As we continue our expansion in Missouri, we are excited to have the support and expert partnership of AFC Gamma,” said Kevin Riggs, President of BeLeaf Medical, adding, “At BeLeaf, we are steadfast in our production of high-quality flower and the development of innovative, best-in-class products resulting in remarkable growth and impressive customer loyalty. We look forward to bringing our exceptional products and brands to consumers in new markets, as this has been our highest priority every time we looked towards expansion.” Missouri legalized the use of medical marijuana in 2018, with sales beginning in October 2020. Since the program launched in October, according to the Missouri Medical Cannabis Trade Association, sales in Missouri have hit $91 million, with 130,000+ registered patients as of July 31, 2021.

Mainstem

Purchasing platform Mainstem completed its latest round of funding, securing $5 million in its recent Series C raise. Mainstem’s funding to date tops $11 million, much of it from the cannatech investors Merida Capital Holdings. Enjoying 213% in sales growth between 2017-2021, Mainstem was recently honored by INC. Magazine in its prestigious annual ‘5000 Fastest-Growing Private Companies in America‘ list. “This is an extremely meaningful milestone for us,” says Mainstem co-founder and CEO ALEN NGUYEN. “This recent capital raise is a reflection of where our industry is heading as well as a testament to the team we have worked so hard to build. Today’s cannabis companies need to utilize robust tracking solutions to maintain inventory levels and serve customers in real time. Our first-to-market SaaS technology provides that support and helps to bring our industry forward as it rapidly expands, offering merchandising convenience for our customers, wherever they are.”


Debra BorchardtAugust 17, 2021
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4min6020

After the market closed on Monday, Lowell Farms Inc.  (CSE: LOWL; OTCQX: LOWLF) announced revenue and operating results for the second quarter ending June 30, 2021. Lowell Farms generated revenue for the quarter of $15.2 million; an increase of 53% over last year and an increase of 37% over the first quarter. Lowell also reported a net income of $731,000 versus a net loss of $8.8 million and $6.7 million in Q2 2020 and Q1 2021, respectively. The company noted that the current quarter included proceeds from insurance claims of $2.6 million which was associated with plant stress that happened in 2020.

“We have a lot to be proud of, but I am particularly excited about the continued progress we are making at the cultivation level,” says Lowell Farms Inc. Chief Executive Officer Mark Ainsworth. “We have spent a good portion of Q2 dialing in our automated environmental systems to continue to reach increased yields and potencies and right now we are collecting important data to provide the optimal conditions for each particular genetics. This is an exciting phase and we look forward to reporting back to you on our learnings and improvements as well as the positive impacts on our annual harvest run rate.”

The company also trimmed its operating loss to $473,000 versus an operating loss of $4.8 million and $5.7 million in Q2 2020 and Q1 2021, respectively. The adjusted EBITDA for the quarter was $740,000 which excluded the insurance claim proceeds, compared to negative adjusted EBITDA of $7.2 million in Q2 2020.

“Our Flower production at the greenhouse ramped steadily during the quarter and we exceeded our guidance of 8,500 to 9,000 lbs during the quarter by a healthy margin at 9,553 lbs, a 102% increase over the preceding quarter. Additionally, our plan to restore the Lowell brand to health was met with success during the quarter.”

Looking Ahead

“We have a lot to look forward to, and despite the headwinds, we anticipate encountering from a decline in bulk sales and the compression in the market,” said George Allen, Chairman of the Board for Lowell Farms. “Our strategy is to offset revenues with our increased cultivation output and the launch of our new LFS business unit which is ramping quickly to incredibly high demand.

“We are also seeing extremely positive results from our expansion to Illinois and we are on track to launch Massachusetts later this quarter. We fully expect to add more markets in the near future. In California, we are positioning Lowell to be successful in an incredibly competitive operating environment and I am incredibly encouraged by the numbers coming out of our cultivation.”


StaffFebruary 25, 2021
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3min20190

California-based Indus Holdings, Inc. (OTCQX: INDXF) is buying Lowell Herb Co. and Lowell Smokes in a deal valued at $39 million. The acquisition includes trademark brands, product portfolio, and production assets of Lowell from The Hacienda Group effective immediately. The company will change its name to Lowell Farms Inc.

“The combination of Indus and Lowell will create a leading producer of California cannabis and the next step for the first great American cannabis brand,” said Gregory Heyman, founder of Beehouse, Lowell’s largest investor. “The Indus team’s commitment to growing excellent cannabis and the communities they serve also realizes Lowell’s mission to normalize cannabis in America.”

The deal consists of a cash payment of $4.1 million and the issuance of 22,643,678 Subordinate Voting Shares of the Company (of which 5,000,000 will be held in escrow to secure certain indemnification obligations undertaken by the sellers in the transaction). The share consideration was issued in a private placement transaction and the company has agreed to register such shares for resale in the United States. Hacienda said it has agreed to continue to produce Lowell products for an interim period pending the completion of the transfer of certain regulatory assets.

It is expected that Lowell Farms Subordinate Voting Shares and Warrants will begin trading on the Canadian Securities Exchange (CSE) on March 5, 2021, under the ticker symbols LOWL and LOWL.WT, and that the Subordinate Voting Shares will begin trading on the OTCQX effective on March 5, 2021, under the ticker symbol LOWLF.

“The cannabis industry is awash in brands competing for our attention, but Lowell has risen to the top of the fray as a brand that simultaneously empowers a movement, welcomes the curious, and greets the reacquainted all with a grace and elegance that other brands can only aspire to,” said George Allen, Chairman of the Board for Indus Holdings, Inc. “Every resource under our control will be employed in unlocking Lowell’s full potential.”


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