Maricann Archives - Green Market Report

William SumnerJune 1, 2018

On May 30, 2018, Maricann Group Inc. announced the filing of its financial results for the quarter ending on March 31, 2018. It was a tough quarter for the company as profits took a precipitous tumble from $1,143,167 in Q1 of 2017 to $600,591 for Q1 of 2018.

The steep decline in revenue was due in large part to a bulk transaction in Germany that the company had planned to take place during the quarter. However, that transaction was pushed back to the second quarter because of the time it took the company to obtain a European Medicines Agency Good Manufacturing Practice certification. Current unaudited revenue for the second quarter so far is purportedly $905,000.

The company realized a net loss of $11.4 million for a loss per share of $0.11, which is drastically lower that its loss in the same period in the previous year; which was $66.8 million with a loss per share of $1.53.

A huge portion of the company’s losses stem from its general and administrative costs Over the last year, G&A expenses have grown tremendously, from $1.7 million to $6.6 million. Even if Maricann is able to sell all of its biological assets and inventory, which totals to approximately $1.7 million, G&A expenses would still outpace revenue, leaving some investors to worry about the company’s long term balance sheet.

With legal adult cannabis sales poised to launch in Canada in the next few months, and with Maricann set to begin exporting into Europe, the company should experience a boost in revenue; which means the next few quarters will be critical to the company’s long term success.

In a statement, Maricann CEO Ben Ward expressed support for the company’s current direction and reiterated the idea that creating better margins for the company’s products is more important than short term revenues.

“We maintain our position that establishing sustainable baskets of margin for our products that will be preserved over the long term is more important than immediate gross revenue. We base all our business decisions in the interest of long term value creation for our shareholders,” commented Ward.

Debra BorchardtApril 23, 2018

Aphria Inc. (APHQF) announced that its subsidiary, Broken Coast Cannabis received a license amendment from Health Canada that provides Broken Coast with an additional 18,000 square feet of production space as part of its Phase III expansion, bringing total production space to 44,000 square feet. As a result of the amendment, Broken Coast’s production capacity will nearly double to 4,500 kg annually.

“We’re pleased to receive Health Canada approval on our Phase III expansion, which will enable us to quickly ramp up production of our small-batch, premium, high-quality B.C. bud,” said John Moeller, Co-founder and President of Broken Coast. “We expect the first crop cultivated and produced at the expansion to be available for sale by the end of July.” Vic Neufeld, CEO of Aphria added, “This is an important milestone for Broken Coast and for Aphria as we continue to bring online more capacity to meet the anticipated demand in the Canadian market.”

In addition to Broken Coast, Maricann Group Inc. (MRRCF) announced that it received all of the necessary approvals from Health Canada to commence cultivation in Phase One of the company’s new facility in Langton, Ontario, Canada. This is Maricann’s third license issued by Health Canada. Maricann is currently undertaking an expansion of its cultivation and support facilities in Canada in a 942,000 sq. ft. build out, with a designed expected capacity of producing 95,000 kg (based on conservative estimates) of dry cannabis flower per year to support existing and future patient growth.

Kris Krane of 4Front Ventures worries that it is too much cannabis being grown for the market. “There’s a ton of capacity being built, but the Canadian market will only be so big and the international market they are banking on is an unknown,” Krane noted that Canada is a terrible place for large-scale cultivation. “There is not a lot of sun and labor costs are high,” he added.

The big argument for these massive expansions is that Canada will be legalizing adult-use marijuana and sales are expected to begin later in 2018. Krane points out that Canada’s entire population is roughly 36 million, which is smaller than the state of California. The California marijuana market is estimated to be $5 billion by 2019 according to BDS Analytics, but Canada is pricing these companies and their expansions as if the market will be larger.

This is why many of these companies crowing about enormous cultivation facilities are courting foreign countries for their product. Krane though believes that relationship won’t last. “The European markets will eventually buy their cannabis from countries like the Balkans, Turkey or even North Africa,” said Krane. He thinks these companies may make money in the short term, but in the long term, he doesn’t think its sustainable.

Krane even believes that ultimately cannabis will end up being grown in Latin American countries where other commodities are grown due to the abundance of sun and cheap labor. That’s assuming countries allow imported cannabis. “I still believe Columbia or Mexico will embrace growing cannabis and take market share,” Krane said.

This dynamic is already being played out in Oregon where the Willamette Weekly reported that the state grew more cannabis than there was demand causing prices to plunge. Marijuana farmers grew 3x more than the residents could consume. It is expected that the summer months will bring even more marijuana into the market regardless of the demand. There are rumors that some of the Oregon cannabis is making it way down to California dispensaries, even though that diversion is illegal.

Some small cultivators can’t make it with prices getting cut in half and are selling at low-ball offers to out-of-state players according to the story. The story also claims that many farmers are left with pounds of product that they can’t sell. Of course, every new market goes through a period of boom and bust. Krane believes he is seeing the boom of Canada’s cannabis expansion and expects the bust isn’t too far away.

StaffApril 16, 2018

This is your Daily Hit of cannabis news for April 16, 2018:

On The Site

Medicine Man Technologies

Medicine Man Technologies (MDCL) announced today the preliminary financial resultsfor the quarter ending on March 31, 2018, and provided an update to shareholders on recent client activity. The company reported approximately $1.2 million in revenue for the quarter, a 122% increase over the same quarter last year and representing the fifth consecutive quarter of revenue growth. Expecting to reach the profit/loss breakeven point this quarter, the company has repaid all of its outstanding debt.

Aphria Inc.

Ontario-based Aphria Inc. (APHQF) reported that its revenues for the third quarter ending February 28 were C$10.2 million versus last year’ C$5.1 million for the same time period, an increase of 100%. Revenue increased 20% sequentially from C$8.5 million. Gross profits for the quarter were C$8.5 million over last year’s C$3.5 million. The net income for the quarter was C$12.9 million, a nice increase over last year’s C$4.9 million. The increase in net income relates to the strength of Aphria’s investment portfolio, including its realized gain on sale of its non-escrowed shares in Liberty Health Sciences, Ltd. in the quarter.

MedReps

According to a March survey done by MedReps, 46% of pharmaceutical sales representatives reported that they expect medical marijuana legalization and stricter opioid laws to have a positive impact on their jobs.

MedReps, an online healthcare sales job site, conducted a survey of 500 sales professionals in medical and pharmaceutical sales, as well as non-medical and non-pharmaceutical sales.

In Other News

Veritas Pharma Inc.

Veritas Pharma Inc. (VRTHF) announced it entered into an agreement to acquire 50% of 3 Carbon Extractions Inc. The remaining 50% equity interest can be acquired by Veritas based upon a value to be decided by a qualified independent business valuator. The purchase price for which shall be paid in cash or in fully paid and non-assessable common shares of Veritas, or in a combination thereof, as may be determined by the Company in its discretion. The shareholders of 3 Carbon will receive aggregate consideration of $300,000 US and 1,500,000 common shares in the capital of the company.

Emblem Corp.

Emblem Corp. (EMMBF) appointed Maria Guest as Chief Marketing Officer to its executive team. The company also named Kim Horrill as Vice President of Medical Marketing and Tim Andrews as Vice President, Creative Director. The foregoing appointments remain subject to the approval of the TSX Venture Exchange. Prior to joining Emblem, Maria Guest spent 20 years building brands and developing new products and innovations within the highly regulated and competitive alcohol industry. Ms. Guest most recently led marketing efforts behind iconic brands like Corona, Stella Artois, Bud Light, Michelob Ultra, and Alexander Keith’s.

Aurora Cannabis Inc.

Aurora Cannabis (ACBFF), CanniMed Therapeutics Inc. and CTT Pharmaceutical Holdings, Inc., announced that the three companies have entered into an agreement that provides Aurora, through its ownership of CanniMed, with joint exclusivity on the distribution in Canada of CTT’s novel, patented drug delivery technologies. This collaboration includes the licensing by CTT to CanniMed and Aurora of six patents related to cannabinoid delivery for pain management that will enable CanniMed and Aurora to exclusively develop and commercialize this unique, sub-lingual (beneath the tongue) wafer, drug delivery system in Canada.

Maricann Group Inc.

Maricann Group Inc. (MRRCF) announced that it received an export permit from Health Canada for a shipment of dried cannabis flower to Germany. This is the first export permit that Maricann has received.

William SumnerApril 13, 2018

As Canada gears up for recreational cannabis sales, which is set to launch later this summer, cannabis firms in the country are already looking for new markets to expand into. One market that has garnered particular attention from Canadian cannabis companies in Europe. Although cannabis is not uniformly legal across Europe, many countries such as Italy and Switzerland allow the import and sale of cannabis for various purposes.

Today, Marican Group, Inc (MARI), a vertically integrated medical cannabis company, announced that it had entered into an agreement with Haxxon AG to acquire all of the company’s outstanding shares. This agreement will allow Maricann to use Haxxon’s production of feminized high CBD cannabis plants to expand into the Swiss market.

Located in a Zurich industrial suburb, Regensdorf, Haxxon’s facility is approximately 64,500 square feet and is only a short drive away from the Zurich Airport.

“Maricann will enhance Haxxon’s existing operations by investing 4,800,000 CHF to improve existing cultivation facilities, improving yield, then add extraction and post-processing capabilities to create finished products for inhalation as a tobacco substitute. These products will comply with both Swiss and European law with THC below 1% for the local market, and THC below 0.2% for the broader European market,” commented Maricann CEO Ben Ward.

The transaction between Maricann and Haxxon is expected to close on or about May 15, 2018, pending regulatory approval and the approval of the holders of the Company’s 9% secured convertible debentures.

Additionally, Aurora Cannabis Inc. (ACBFF) announced today that it has completed the successful delivery of its first medical cannabis export to the Italian government, which was made possible through the company’s wholly-owned German subsidiary Pedanios GmbH. The product is now being distributed to pharmacies throughout the country.

“The Italian government has entrusted Aurora as the only direct, foreign non-government supplier to the Department of Defense in response to its first ever public tender to help support the growing demand on its strictly-regulated medical cannabis program,” said Aurora CEO, Terry Booth. “We take this responsibility very seriously and will be supporting the growing number of patients in the Italian system with high-quality products, as well as educational support initiatives for both the general public and physicians.

StaffMarch 23, 2018

Here are the day’s cannabis news briefs for March 23, 2018.

A spending bill passed by Congress early Friday contains language that renews restrictions on the use of federal funds to interfere with state medical marijuana programs. While the president made it sound like he wouldn’t sign the bill, the latest news is that he does intend on signing the legislation. The rider called the Rohrabacher-Blumenauer amendment will continue to prevent the Department of Justice from spending any money to go after medical marijuana patients and providers who comply with laws in states where medical marijuana is legal. The budget is good until September 30 and the rider would need to be renewed in the FY2019 spending bill. This language was originally approved in 2014 and has been included in every subsequent budget agreement.

What didn’t happen was a separate piece of legislation that would have protected recreational marijuana businesses. That was not approved by House Republicans to go to the floor for a vote.

InMed Pharmaceuticals Inc.

Biopharmaceutical company InMed Pharmaceuticals (IMLFF) that specializes in the research and development of novel, cannabinoid-based drug therapies announced that is has received final approval for the listing on the Toronto Stock Exchange.

Maricann Group Inc.

Maricann Group (MRRCF) announced that on March 20, 2018, it received an occupancy permit from Norfolk County for Phase One of its new grow facility in Langton, Ontario. The company is now ready to begin cultivation in its Canadian expansion subject to receipt of Health Canada approval. Phase One is expected to increase the Company’s annual growing capacity to 25,000 kg of dry cannabis flower per year. Phase One is the first 217,000 square feet of a planned 942,000 square foot facility.

Debra BorchardtDecember 1, 2017

Maricann Group Inc. (OTCQB: MRRCF) reported its earnings and yet the company didn’t say anything in the press release about the revenues from the quarter and instead said that “results were consistent with expectations” and revenue was expected to increase in 2018. This is always a big red flag when investors have to hunt and search for the numbers.

Sure enough, revenue fell for the three months ending September 30 to C$721,035 from C$892,081. Gross profits also tumbled to C$225,207 from C$477,490. Net losses soared to C$5,379,931 from last year’s C$1,119,537. Net losses for the last nine months were C$57 million versus last year’s C$2.7 million.

The company’s statement read, “Revenue is expected to increase in the first quarter of 2018 when the Company’s joint pharmacy initiative is expected to launch. Product distribution for this initiative will occur through previously announced exclusive and primary supplier relationships with retail pharmacies.” Marican said it has reserved inventory to be ready for patients when the program begins.

More disturbing is that the company’s statement filed with Sedar said that as of September, it had accumulated a deficit of C$72 million and that the company will need to raise capital in order to fund its operations. So far Maricann has raised C$31 million in convertible debentures.

Maricann Pins Hopes On Germany

Maricann is also pinning its hopes on Germany, but that process has been slowed. In the company statement, Maricann said, “The tender process has been delayed multiple times due to ongoing legal proceedings related to unsuccessful submissions by other applicants in the initial qualifying round. A further delay in the tender process may occur due to ongoing legal proceedings, however, a final decision may be forthcoming as early as March of 2018.” The company said it had also set aside inventory for European markets.

MariPlant GmbH has been registered as a 95% owned subsidiary in Germany. The subsidiary will cultivate approved industrial hemp cultivars and extract CBD to be used in its “Mariplant” products. The company statement read, “It is expected that these CBD products will be distributed through MariPlant’s own online shop in Europe, starting in February of 2018 and it is further anticipated that MariPlant will distribute 25mg CBD metered dose soft gel capsules with VesiSorb delivery technology as its first product offering.”

More Shares

Outstanding shares ballooned as well to 68 million from last year’s 36 million. Maricann’s shares on the OTC Market were lately trading at $1.87, down from the 52-week high of $2.13.

StaffNovember 8, 2017

Maricann Group Inc. (MRRCF) announced that Health Canada has granted it a new license that will allow the company to increase capacity to 6,250,000 grams on site at any one time. The annual production limits were approved for medical cannabis products in Maricann’s current Langton, Ontario facility. This new license represents an increase of over 480% of production capacity and is valid until October 9, 2020.

In addition to that, Maricann’s new facility will house an additional two vaults with 30,000,000 grams of potential storage capacity. The new license is a huge jump from the previous limitations that were for a total of 1,282,000 grams (930kg of dried marihuana and 352 kg of cannabis oil) per year.

“This new license gives us more flexibility as we are able to increase production volume and provide more bulk storage for cannabis products, including processed resin to meet future demand,” said Ben Ward, CEO of Maricann. “With the Phase 1 expansion of our state of the art Langton cultivation and production facility nearing completion and with both new vaults now poured and in place, we expect to be able to take full advantage of the scale we are creating. We maintain a highly secure growing environment that meets or exceeds requirements of the Access to Cannabis for Medical Purposes Regulations (ACMPR).”

This re-issued license is one of two that Health Canada has issued to Maricann. On September 5, 2017, Maricann announced that it had secured a second-site sales license for its location in Burlington, Ontario through its wholly-owned subsidiary, Maricann Inc. According to the company statement, the Burlington, Ontario sales license is the second granted to Maricann Inc. by Health Canada, with the first applying to the Company’s cultivation and production facility in Langton, Ontario.

Earlier this week, Maricann announced that it had entered into a collaborative agreement with a national provider that the company didn’t name to create a pharmacy services program that will help pharmacists to counsel and educate patients with regards to medical marijuana.

According to the company statement, “The initiative will aim to position pharmacies to be a preferred access point for medicinal cannabis based on pharmacists’ critical role in working with physicians and patients in understanding the multi-synchronistic opportunities in multi-medication patients. Maricann will develop additional medical cannabis product accessibility initiatives with the objective of establishing procedures and protocols for medicinal cannabis medical documents, and facilitating the submission of patient prescriptions to Maricann for direct to patient fulfillment.”

Debra BorchardtOctober 6, 2017

It’s been a big couple of weeks for Julian Marley’s company JuJu Royal (CSE: JUJU). The company announced earlier this week that it was teaming up with G FarmaBrands for distribution. G Farma’s subsidiary Finka Distributors will have the chance to get the JuJu Royal cannabis products into the company’s 1,000 dispensary’s it works with.

Now the company is announcing that it has partnered with Maricann Group (OTC:MRRCF) to cultivate and formulate the premium line of products. Maricann will offer the premium JuJu Royal line to its existing medical patients starting on January 1. The patients will initially have access to four of Marley’s designer strains of dry flower.

“We’re committed to producing all natural cannabis, marrying our vision for ‘A World of Good’ with Julian Marley to deliver a curated and unique experience to our patients, and soon, the broader market,” Ben Ward, CEO of Maricann said. “JuJu Royal is an exclusive line of products that leads the market in California and Colorado with carefully selected genetics, combined with solvent-free extraction, delivering the best cannabis has to offer.”

Marley is the son of the great, late reggae icon Bob Marley. He is a musician himself and also a devoted Rastafarian. His company had tried to partner with DropLeaf in 2016, but the partnership ran into problems and more recently merged with GEA Technologies, which is being renamed International Cannabrands.

G FarmaBrands through Finka Distribution will have the exclusive right to distribute cannabis products form JuJu Royal throughout Southern California for an initial term of three years. “As the California market moves into recreational regulated retail, we are eager to expand and distribute the most in-demand brands and products the industry has to offer,” said Nicole Gonzalez, Founder of Finka Distribution. There are some JuJu products already available in California, Washington, Colorado and Puerto Rico and the company has set its sights on Nevada too.
No doubt JuJu Royal and International Cannabrands are poised to grow quickly with the G Farma deal and now the Maricann deal. “Maricann is exactly the type of strategic partner we are looking for,” stated Jeffrey Britz, Chairman, and CEO of International Cannabrands. “Their core value of quality and commitment to the wellness of their customers aligns exactly with ours. They currently serve thousands of patients in Canada and have a vision to develop cannabis markets worldwide. We believe Maricann is uniquely positioned to capitalize on the adult-use cannabis market in Canada and are excited they have chosen us.”

Under the terms of the agreement, Maricann will have the exclusive right to cultivate, extract and distribute in Canada the JuJu Royal line of products that are currently offered in the United States. The agreement is set for five years.

Julian Marley added “JuJu Royal is freedom. I welcome Maricann to JuJu Royal, our vision is to heal the world with organics’ as the herb is the healing of the nation. It’s a pleasure to spread this love and joy together all because of this amazing plant.”

Number of the Week: 52%

NY CAURD Applicant Wants Waiver for Location Near MedMen

In other news

LGBTQ+ Pride’s Crucial Role in the Modern Cannabis Industry

Daily Hit: June 5, 2023

Monthly Illinois Cannabis Sales Inch Upward in May, State Reports

Maricann Archives - Green Market Report

Maricann Group Posts Q1 Financial Results; Revenue Drops by Nearly Half

Broken Coast, Maricann Expand Cannabis Production, But Is It Too Much?