Marijuana Money Archives - Green Market Report

SNDL Inc. formerly known as Sundial (Nasdaq: SNDL) is buying The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) in a deal valued at C$138 million. The acquisition will make SNDL one of the largest adult-use cannabis manufacturers and retailers. The combined company will have 555,500 square feet of cultivation and manufacturing space and 185 cannabis stores under the Spiritleaf and Value Buds banners.

Since recreational cannabis launched in April, New Jersey reported approximately $200 million in legal sales.Monthly sales growth in the state outpaced other adult-use markets tracked by the firm despite having one of the lowest per capita retail counts in the pool. BDSA estimated a compounded monthly growth rate of roughly 10% through July versus Illinois’ rate of 3% in its first three full months of adult-use sales.

TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) completed its acquisition of Michigan dispensary chain Pinnacle Emporium from KISA Holdings, LLC, for $28.5 million. The acquisition includes six dispensary licenses, five of which are currently operational and located in the cities.

In a fairly depressing letter to shareholders, Oregon-based Chalice Brands (OTC: CHALF) dropped a truth bomb about the industry’s woes. The letter starts out nice enough.The letter hit on the macroeconomic trends of inflation, higher interest rates, the skyrocketing cost of housing, and the effect of consumers spending less. Digging further the letter says Oregon’s cannabis operators have been beset with repetitive theft, increased overhead, and excessive competition.

The Greenrose Holding Company Inc. (OTC: GNRS, GNRSW) posted increasing losses for the consecutive quarter as its cultivators navigate demand headwinds. Greenrose reported approximately $9.2 million in rising revenue during the period, the company’s second-quarter net losses totaled $10.3 million, down 132% sequentially;

The Pennsylvania Department of Health withdrew its appeal to the Supreme Court of Pennsylvania to recall various vaporized medical cannabis products after a half-year pushback from the advocacy network Medical Marijuana Access and Patient Safety.

The retraction on Aug. 17 came months after the department issued a recall and ban of hundreds of medical cannabis vape products.

We are reporting from the CWCB Expo in New York City today. 

It was a shorter trading week since markets were closed on Monday for the Memorial Day holiday and it’s been a fairly quiet start to summer for business news.

On Monday, Canadian cannabis company Entourage Health Corp. (TSX-V: ENTG) (OTCQX: ETRGF) reported total first quarter revenue of $15.8 million, up 17% sequentially over the fourth quarter of 2021. The reported loss was trimmed to $8.7 million.

Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF) announced  first quarter revenues increased 65% to $4.6 million and a 28% sequential increase from the fourth quarter. The company’s net loss was essentially flat at $4.5 million.

HYTN Innovations Inc.  (CSE: HYTN) reported revenues of $255,461 for the second quarter and  the company has a cash position of over $2.2 million and no debt as of March 31, 2022. However, it is also listed as a going concern at this time.

The Allman Brothers band became the latest music group to release a cannabis brand. Most of the members of the band are dead at this point, but that doesn’t seem to matter. 

And finally, we published our followup story to the NASDAQ traded concept cannabis company Bright Green. We were able to track down the lawsuit from the former CEO and the allegations are stunning to say the least. Make sure you read that one. 

Bright Green is a cannabis company with no revenue that just began trading on the NASDAQ, despite the exchange’s insistence that it won’t list U.S. cannabis companies due to the product being federally illegal. Bright Green plans to produce cannabis for research purposes with the Drug Enforcement Agency‘s (DEA) blessing, which seems to be the reason why the NASDAQ has allowed the company to trade. It would be considered federally legal cannabis. But the DEA wouldn’t confirm the agreement. The stock was trading at $26 and moved beyond $30 a share.

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) is buying Lemurian, Inc. better known as Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology, contingent upon federal permissibility of THC in the U.S. or earlier at Canopy Growth’s election, up to 100% of the outstanding capital stock of Jetty.

Cresco Labs Inc. ( (OTCQX: CRLBF)  reported revenue fell from the fourth quarter’s $217 million to the first quarter’s $214 million. Cresco Labs did note that the revenue increased 20% over last year’s $178 million for the same time period. This also beat the Yahoo Finance average analyst estimate for sales of $213 million.

After several lackluster quarters, cannabis software company Akerna (Nasdaq: KERN) announced that it is evaluating strategic alternatives as the company. Akerna also reported that CFO John Fowle is leaving to pursue other interests and the Board has appointed Dean Ditto as Akerna’s interim CFO. Fowle recently said on the company’s earnings call, “The ability of the company to continue as a going concern is dependent on our ability to secure other sources of financing, reduce debt, and attain profitable operation.

Planet 13 Holdings Inc. (CSE: PLTH)(OTCQX: PLNHF) announced its financial results for the three-month period ended March 31, 2022, with revenues rising 8% to $25.7 million from last year’s $23.8 million. However, Planet 13’s revenue fell sequentially from the fourth quarter’s $29 million.

Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF)  reported revenue fell sequentially by 11% to $123 million from $139 million in the fourth quarter. It was a 43% increase over last year’s revenue of $86 million for the same time period.

Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF) reported net revenues rose 147% to $22.6 million versus $9.2 million during the same period in 2021. Revenues fell sequentially from the fourth quarter’s revenue of $29 million. Auxly admitted it had lower winter yields at Auxly Leamington and hardware and packaging shortages due to supply chain disruptions.

Next week, we’ll be reporting from Davos covering the psychedelic space.

Earnings season is in full swing as companies begin to deliver the first quarter earnings. Across the board it was tough for hydroponic companies, while many of the cannabis producers seem to start the year strong. Some even teased that next quarter would begin the inclusion of New Jersey sales. 

One story we’ve been following for months got resolved. MedMen agreed to surrender its New York assets to Ascend Wellness. After a months-long nasty court battle, MedMen agreed to let go and while MedMen said it got $15 million more, Ascend’s purchase went from 86% of the property to 99% – so it didn’t really seem like they squeezed much more out of the deal. The interim MedMed CEO Michael Serruya is now the Chair and the company named Edward Record as the new CEO.

There were so many companies delivering numbers, that we’ll just high the high points here. 

Trulieve announced its first quarter revenue increased to $318.3 million from $193.8 million last year and 4% sequentially. The company also said it expects to report over a billion in cannabis sales in 2022. 
Both Curaleaf and Acreage Holdings reported that their sales declined sequentially from the fourth quarter. However both companies were able to begin adult-use sales in New Jersey in April and that is likely to turn things around quickly.

On the hydroponics side, Urban-gro, Hydrofarm and Agrify all reported earnings this week. Sales were either flat or just barely above last year for each company. However, they are all reiterating previous guidance and believe their market will recover by the end of the year.

On a positive note, Green Thumb Industries showed how it had navigated headwinds of falling prices and increasing costs. This company continues to deliver solid quarters and this was another. Revenue rose 25% year-over-year to $243 million.

Next week is the MJ Unpacked conference in New York. 

The big news this week was that the first licenses for adult use cannabis were awarded by the state of New Jersey. 13 licenses were handed out to existing medical marijuana operators. Some of the companies that got the green light included Curaleaf, GTI, Acreage Holdings and Terrascend. Sales could begin in just a few short weeks. More licenses are expected in the near future. 

Tilray Brands Inc. (NASDAQ: TLRY) is leaning into its Hexo Corp. debt buying with the announcement that it would buy Hexo’s remaining $193 million senior secured convertible note. Tilray had originally announced in March that it was buying $211 million of the troubled company’s debt.

Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) delivered its results for the second fiscal quarter ended February 28, 2022. Organigram reported that its net revenue increased 117% to $31.8 million, from $14.6 million for the same time period in 2021. The company attributed the increase to growth in adult-use recreational revenue and international revenue, partly offset by a lower average net selling price due to product mix and a decrease in medical revenue.

The Valens Company Inc. (TSX: VLNS) (Nasdaq: VLNS) reported that net revenue increased 26.1% sequentially to $23.2 million in the first quarter from $18.4 million in the fourth quarter. However, the company also reported a net loss of $25 million and is working to reduce its cash burn.

New York State Governor Kathy Hochul released the 2023 budget that predicts adult-use sales of legal cannabis will generate $40 million in license fees and $16 million in partial receipts from the state’s retail taxes. Mor eimportant is that the governor is willing to give the cannabis companies a tax break by casically allowing 280e deductions at the state level. 

Finally, markets are closed on Friday for the Good Friday holiday. Happy easter everyone.

In just a few weeks Green Market report is hosting its first event of 2022. The Women’s Summit is on April 28, but all genders are welcome. Go the website under the Summits tab to register.

New Mexico is now the 18th state to legalize the sale of adult-use cannabis and those sales began last Friday. The state reportedly sold $5 million worth of product by the end of the first weekend.

Tilray Brands, Inc. (Nasdaq: TLRY) reported third fiscal quarter revenue increased 23% to $152 million but this fell from the second quarter’s revenue of $155 million and slightly missed the revenue estimates. The company also reported a net income of $52 million.. However, this net income improvement was almost entirely from a $76M non-cash adjustment to the company’s warrant liability and the future value of convertible debentures(which occurs due to the share price falling). 

The disgruntled investor lawsuit against Parallel cannabis initially hit the public records as a heavily redacted document. The Judge in the case apparently denied the redaction request and Green Market Report got a look at the complaint in all its glory or gory detail. Essentially Former CEO Beau Wrigley increased the company debt to $300 million while Parallel reduced its revenue projections by 40% in a matter of months. Parallel was also in default on its debts but did not tell potential investors. This story has lots more detail so head to the site to read it.

Israeli-based cannabis company InterCure Ltd. (NASDAQ: INCR) (TSX: INCR.U) also known as Canndoc reported its fiscal year 2021 revenue of $89 million.

 The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (OTC: TGODF) reported that in 2021, TGOD’s revenue rose 146% to $39 million. The net loss for the year was $43.5 million. Most troubling was the company’s auditors saying that the accumulated deficit was $487 million and the company remained a going concern.