MariMed Archives - Green Market Report

Debra BorchardtDebra BorchardtAugust 11, 2020
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4min3950

MariMed Inc. (MRMD:OTCQX) reported that its revenues rose 163% to $9.6 million for the second quarter versus $3.7 million for the same time period in 2019. Still, the company delivered a net loss of $1.2 million versus last year’s income of $4.6 million. The net income per share was flat at zero versus last year’s earnings per share of $0.02 for the same time period.

Operating expenses for the second quarter of 2020 rose to $4.1 million versus $3.6 million in 2019. The company blamed the increased expenses on increased personnel costs as MariMed transitions to a direct owner and operator of seed-to-sale cannabis operations.

Bob Fireman, CEO of MariMed said, “Our renewed focus on our core cannabis business and the consolidation of our managed assets are the key drivers of MariMed’s positive Q2 results. In Massachusetts, we have now ramped up our New Bedford manufacturing facility to produce over 1,000 pounds of cannabis flower per month. Our Nature’s Heritage Flower brand and our Betty’s Eddie’s natural chews infused brands are leading sellers in their respective categories in both Massachusetts and Maryland. Our two dispensaries in Illinois are thriving in the new adult-use program. We intend to open our third dispensary in Illinois in September and a projected fourth by the new year.”

The company is slowly improving its financial status. On June 30, 2020, the company’s negative working capital improved to approximately $21.5 million from approximately $29.3 million at December 31, 2019. In addition, during the six months ended June 30, 2020, MariMed’s operating activities provided positive cash flow of approximately $540,000, compared to approximately $22.1 million of negative cash flow used by such activities during the same period of 2019. The company said in its filing that it is looking to raise more capital but can’t be assured that it will be successful.

Year-to-date revenues totaled $17.1 million, a 138% increase compared to $7.2 million for the first six months of 2019. The company reported that its gross profit from the core cannabis business was $6.2 million for the quarter, a 133% increase from the $2.6 million for the comparative period in 2019. The adjusted EBITDA of $3.3 million for the second quarter of 2020 compared to a loss of $250,000 for the same period in 2019.

Jon Levine, CFO, added “I am pleased with the revenue growth from both our consolidated and managed licensed cannabis businesses. We are confident that the marketplace will recognize the positive track that our revenue and earnings are on. At the same time, we also took decisive actions in the second quarter by restructuring our short-term debt which significantly strengthens the Company’s financial position.”


Debra BorchardtDebra BorchardtJuly 20, 2020
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5min13620

GenCanna, one of Kentucky’s largest hemp companies, filed for voluntary Chapter 11 reorganization with the U.S. Bankruptcy Court in the Eastern District of Kentucky earlier this year in February. One problem with GenCanna’s bankruptcy filing though was that MariMed (OTC:MRMD) was one of the largest shareholders in the company. It had a $34 million claim against the company sparking a battle over control of the company.

Last week, Law360 reported that MariMed lost a round over the efforts to gain control over the company. The website said that U.S. Bankruptcy Judge Gregory Schaaf of Kentucky found MariMed had acted improperly when it attempted to replace members of GenCanna’s board of directors and force out GenCanna’s president and chief executive officer.

The Fight Begins

In any bankruptcy cases, debtors are first in line over equity holders. In the process of working through its bankruptcy, GenCanna made a deal to sell the bulk of its assets for $75 million. MariMed was against the deal and had its own plan to reorganize the company, but apparently couldn’t come up with the money needed for the plan. According to the Law360 reporting, the court records demonstrated that GenCanna went with the offer it had.

The court records said that MariMed’s president and chief executive officer Robert Fireman, who also sits on GenCanna’s board of directors, teamed up with another board member, Michael Falcone, to form a voting bloc controlling 52% of GenCanna’s parent company’s shares. The two apparently pulled GenCanna Chief Executive Officer Matty Mangone-Miranda, GenCanna President Steve Bevan, and one other member of the board of the parent company, and installed Fireman as chairman, according to court records.

The court filings stated that Fireman and Falcone appointed a new CEO of the parent company, and directed him to get the bankruptcy case dismissed. The new director of GenCanna USA’s board was told to develop a plan to liquidate the company within 30 days.

The ousted executives, Mangone-Miranda and Bevan asked Judge Schaaf to step in claiming MariMed’s actions violated board rules. The Judge agreed saying, “Using an equity position that has no chance of recovery to object to a settlement that is not even filed is an obvious attempt to exercise control over the case and enhance the creditor interests,” Judge Schaaf wrote. “Further, this also suggests clear abuse of the governance process that would warrant action in this court if an injunction was requested. For now, that analysis is not required.”

Basically, since the assets were sold, there is nothing left for the equity owners like MariMed. Since there’s nothing left for MariMed, they have no power to make these types of decisions at the company. GenCanna said it is in settlement negotiations with its senior secured lender and buyer to resolve claims from the committee of unsecured creditors. The settlement is expected to generate roughly $1 million, but the claims are much higher than that.

The assets were sold to New York-based MGG Investment Group, a private lender, and one of the company’s creditors.

GenCanna’s Pain Inflicted On MariMed

GenCanna’s bankruptcy filing also weighed on the shares of MariMed. In April, MariMed’s fourth-quarter 2019 financial results included a one-time charge of $30.2 million as a result of a write-off of its investment in GenCanna. CEO Jon Levine said, “Despite GenCanna’s Chapter 11 filing, we believe that it will emerge with a restructured capital and operational structure that will allow GenCanna to restore its position as a leader in the hemp industry. If this occurs, we believe there will be an opportunity for the value of the assets to be recaptured at a later date.  We expect to continue our strong relationship with GenCanna and jointly pursue opportunities in the evolving hemp industry.”

MariMed’s shares have dropped from 40 cents in February before the GenCanna bankruptcy and were lately selling at 13 cents.


Debra BorchardtDebra BorchardtMay 12, 2020
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4min5430

MariMed Inc. (MRMD:OTCQX) announced preliminary, unaudited, select financial results for the quarter ending March 31, 2020. Revenue increased 112% to $7.5 million versus $3.5 million in the first quarter of 2019. The company did not release a net profit or loss number, but it did say that it had EBITDA of $1.5 million, compared with an EBITDA loss of $4,000 in Q1 2019. MariMed also delivered a gross profit of $4.6 million compared with $2.3 million in Q1 2019.

“The success of our consolidation strategy contributed to our sales momentum in the first quarter of 2020, enabling us to grow quarterly revenues by 112% compared to the prior-year period,” said Bob Fireman, CEO of MariMed. “We are pleased with the consistently strong performances reported by our consolidated cannabis businesses in Illinois and Massachusetts as well as an increase in licensing revenues, in line with our strategic growth plan.”

First Quarter Revenues

The company attributed its year-over-year increase of approximately $4.0 million to the consolidation of the company’s cannabis client businesses in Illinois and Massachusetts. In a statement, the company said that revenue from these now wholly-owned subsidiaries, KPGs in Illinois and ARL Healthcare in Massachusetts, are expected to increase significantly over the balance of 2020. “Revenue from licensing fees from the sale and distribution of MariMed branded products Betty’s Eddies and Kalm Fusion brands, increased 34% over the same period in the prior year and are expected to experience significant growth over the balance of 2020.”

COVID-19

MariMed also gave an update with regard to the pandemic’s effect on the company. MariMed was allowed to provide its Massachusetts medical cannabis patients with uninterrupted access to the products they needed during the pendency of the pandemic.  In addition, the company said it was recently granted three provisional adult-use licenses by the Massachusetts Cannabis Control Commission (CCC) for cultivation, production, and a dispensary. “The cultivation and production licenses will be utilized at its New Bedford manufacturing facility and the dispensary license at its Panacea Wellness in Middleborough. MariMed said it expects to begin selling cannabis products for adult-use in the coming months, pending final inspections by the Massachusetts authorities.

MariMed also said it filed for a 45-day extension with the SEC to delay reporting its earnings due to COVID-19.

Illinois

MariMed said that when adult-use cannabis sales became legal in Illinois, it had an immediate sales ramp-up in the first quarter of 2020 at two of its medical cannabis dispensaries. MariMed also announced it has a third dispensary under development in Illinois which will benefit significantly from Illinois’ new adult-use program.

Fireman added, “As we move through 2020, we expect to continue strong revenue growth from further consolidation of our client businesses as well as the expansion of our product portfolio into additional states.”


Debra BorchardtDebra BorchardtApril 1, 2020
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7min15970

MariMed Inc. (MRMD:OTCQX) quarterly revenues for the quarter ending December 31, 2019, increased 50.9% to  $5.19 million versus $3.44 million for the same period of 2018. The company attributed the increase to the roll-up up of MariMed’s licensed client businesses in Illinois in the fourth quarter of 2019.  Fourth-quarter 2019 revenues were also bolstered from new distribution channels secured for MariMed’s Betty’s Eddies and Kalm Fusion brands. The company did not disclose the net loss for the quarter.

Full Year 2019

For the full year ending in December, total revenues grew to approximately $45.6 million. Core cannabis sales for the fiscal year 2019 were $16.6 million, a 40.0% increase compared with $11.9 million for the fiscal year 2018. The operating loss for 2019, including the GenCanna receivable reserve, was $41.6 million, compared with an operating loss of $5.4 million for the full year 2018.  Net loss for the full year 2019 was $81.2 million or $0.39 per share, compared with a net loss of $13.6 million or $0.07 per share for the full year 2018.

Jon Levine, MariMed’s CFO said in a statement, “Due to GenCanna’s recent challenges, we believed it prudent to make these accounting adjustments now to resolve any uncertainty for our stockholders as no further accounting adjustments are expected as a result of GenCanna’s Chapter 11 proceeding. These financial adjustments did not impact our core cannabis business, which continued to grow revenues substantially during the fourth quarter. “

Running On Fumes

At the end of 2019, MariMed had negative working capital of approximately $31.0 million and has incurred negative cash flow from operations of approximately $24.8 million. In early 2020, the company raised approximately $4.4 million as part of an exchange agreement with two institutional stockholders and $935,000 from the issuance of convertible debentures.

In addition to those measures, the company has extended the maturity dates of approximately $19.4 million of promissory notes and is in the process of finalizing the documentation to extend another $3.0 million of promissory notes. MariMed said that it has obtained a commitment from an accredited investor for a $12.0 million loan, secured by the company’s real estate, at a rate of 10% per annum with a one-year term.

Illinois, Massachusetts To The Rescue

Despite the struggles at MariMed, two states could end up saving the day for the company. MariMed said that the Massachusetts operations are expected to contribute to significant revenue growth in 2020 reflecting the shortage of products across the state and the growing demand by consumers. Plus, the company expects to receive approval from the CCC over the next few months to commence adult-use sales at its Middleborough dispensary, pending a final inspection by the agency. The company was able to introduce branded flower company Nature Heritage and infused products called Betty’s Eddies and Kalm Fusion into the Massachusetts market. The company is planning to roll out other exclusive brands such as Tropizen Hot Sauces, Binske and Tikun Olam in 2020.

In the fourth quarter of 2019, MariMed received Illinois state approval and rolled up the ownership of its two previously managed client licensed medical companies, KPG Anna and KPG Harrisburg. On January 1, 2020, adult-use cannabis sales were legalized in Illinois, which has generated an immediate ramp-up in sales to MariMed in the first quarter of 2020. The company began developing a third dispensary in Mount Vernon, Illinois in March 2020 and has subsequently applied for a medical and adult-use cannabis license for this location. The company also intends to open an additional fourth dispensary in the state later in 2020.

Gen Canna Bankruptcy

Even though it had the largest recorded hemp harvest in Kentucky in excess of 6,000 acres, GenCanna filed for voluntary protection under Chapter 11 in order to reorganize and restructure its debt and business operations. As a result, MariMed’s fourth-quarter 2019 financial results included a one-time charge of $30.2 million as a result of a write-off of its investment in GenCanna. GenCanna management expects that its Chapter 11 restructuring will facilitate it emerging as a stronger company with the ability to complete the processing of in excess of 15 million pounds of biomass on hand.  This will permit GenCanna to commence marketing of one of the largest inventories of CBD oils and isolates in the industry in the foreseeable future.

Levine added, “Despite GenCanna’s Chapter 11 filing, we believe that it will emerge with a restructured capital and operational structure that will allow GenCanna to restore its position as a leader in the hemp industry. If this occurs, we believe there will be an opportunity for the value of the assets to be recaptured at a later date.  We expect to continue our strong relationship with GenCanna and jointly pursue opportunities in the evolving hemp industry.”

Looking Ahead

GenCanna certainly didn’t help MariMed’s earnings, but the company has shored up its finances and is crossing its fingers that Illinois and Massachusetts sales help staunch the bleeding.

Mr. Tim Shaw, MariMed’s COO commented, “Brand recognition of our flower and cannabis-infused products continues to grow as we reach new patients and customers, with Betty’s Eddies being named among the top-selling sublingual and edible products in a national survey conducted by LeafLink, the leading wholesale platform for cannabis products in the United States.  Bringing these products to new patients and customers, as well as launching new SKUs under our best-selling brands, will remain one of our key objectives throughout 2020.”


StaffStaffNovember 27, 2019
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6min16410

It’s time for your Daily Hit of cannabis financial news for November 27, 2019.

On The Site

Green Wednesday

While most people are starting to do Thanksgiving cooking on the Wednesday before, cannabis industry professionals prepare for one of the biggest sales days of the year. It’s known as Green Wednesday. Consumers stock up on cannabis for the holiday weekend that might be fraught with family tension.

According to new data by BDS Analytics, “In 2018, November 23rd had the highest cannabis sales of any other day during the entire month of November with over $6.2 million in sales on that day alone, which is 60% higher than the average daily sale day in November 2018 and accounted for over 5% of that month’s revenue.”

Busted Deals

The bear market for the cannabis industry is leading to the unwinding of deals that had great promise. Cannabis companies are no longer willing to write big checks with fingers crossed that the market will just continue to boom. Two of these deals were terminated after great fanfare.

Cresco Labs

Cresco Labs (CSE:CL) (OTCQX:CRLBF)  said it was ending its plan to acquire Florida-based VidaCann Ltd. which was originally announced on March 18, 2019. It was valued at $120 million when it was first announced.

SOL Global

SOL Global Investments Corp.’s (CSE: SOL) (OTCPK: SOLCF) said it decided against its deal with MCP Wellness to that was agreed to on April 23, 2019. SOL was to buy MCP Wellness for $35 million in cash and S$115 million in equity consideration in CannCure.

MCP is the Merida Capital Partners affiliate that owns the rights to own three Michigan cultivation licenses, a processing license, 9 licensed and operating dispensaries and 6 additional dispensary licenses, giving it the largest retail footprint in the state of Michigan.

Massachusetts

A year has passed since Massachusetts began sales its sale of legal adult-use cannabis and while the state showed no interest in rushing the matter, customers showed their interest as they rushed to the stores.

One year later, the state reported that licensees generated $393.7 million in gross sales and that 33 dispensaries had been licensed. The customer demand is high, but the inventory is low. There aren’t many licensed cultivators in the state of Massachusetts, leaving little room for excess.

In Other News

Dixie Brands

Dixie Brands Inc. (CSE: DIXI.U), (OTCQX: DXBRF) announced its third quarter 2019 financial results with revenue increasing 28% to $3,121,211 in Q3 2019, compared to $2,435,398 in Q3 2018. Sequential quarterly revenue increased, up from $2,995,310 in Q2 2019. Revenue growth was driven by sustained presence and increased dispensary penetration in established markets, increasing traction in the key California market, continued growth in Michigan, and the introduction of new products.

Net loss attributed to the Company in Q3 2019 of $4,915,807 was lower by $1,853,750 compared to the Q2 2019 loss of $6,769,557.  The lower net loss was due to more efficient general and administrative spending. The Q3 2019 net loss includes $2,245,413 of non-cash expenses resulting primarily from stock options issued as compensation for key management and external service providers. Dixie had $892,312 of cash at September 30, 2019.

MariMed

MariMed Inc. (MRMD:OTCQX) reported results for the quarter ending September 30, 2019. Filing of the Company’s 10-Q for the quarter was delayed awaiting receipt from GenCanna Global, in which MariMed, Inc. holds a 33.5% interest, of its operating results for the quarter., As previously reported, GenCanna experienced a major fire at its Kentucky facility in early November. Financial comparisons are to the same year-ago periods unless otherwise noted.

Total revenues increased 230.9% to $11.22 million compared to the same period of 2018. Of that total, cannabis revenues grew 24.1% to $4.21 million, while MariMed’s hemp division reported revenue primarily from seed sales, of $7.01 million in the quarter. Total operating income for the period increased to $973,000, up from an operating loss of $549,000. Overall, the Company reflected a loss for the quarter of $7.30 million primarily due to interest expense on short-term borrowings to fund hemp seed purchases, as well as the Company’s equity in the net loss reported by GenCanna. The GenCanna loss stems primarily from a one-time adjustment totaling $6.10 million relating to market value adjustments for product.


Debra BorchardtDebra BorchardtAugust 12, 2019
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8min9250

It’s time for your Daily Hit of cannabis financial news for August 12, 2019.

On The Site

CannTrust

After the market closed on Friday, CannTrust Holdings Inc. (NYSE: CTST)said it received a report from Health Canada telling the company that “Its manufacturing facility in Vaughan, Ontario has been rated non-compliant with certain regulations.”CannTrust stock is dropping over 25% to lately trade at roughly $2.26 in pre-market trading as shareholders learn about the continuing problems with the facilities causing more uncertainty.

The news that the company’s facility has failed a recent inspection is troubling because it was supposed to have addressed problems from previous inspections in which the company was found to be growing cannabis in rooms that hadn’t received licenses.  Health Canada has said that it is currently unable to provide any guidance about the timing or content of its decisions regarding CannTrust.

Saving Money

On August 6th we published an article that illustrated the savings for consumers and additional profits for cultivators that could be produced through the use of a properly organized Cannabis Cooperative Association (“CCA”). This article describes the savings for consumers and the additional profits for cultivators in the movement of cannabis in the form of extracted oil.

As we have said on multiple occasions, a CCA is the most financially efficient structure for engaging in business in California’s cannabis industry. The utilization of a CCA for the movement of cannabis as extracted oil produces even greater price reductions for consumers and increased profits for cultivators than with flower. This occurs because more costs are incurred between the cultivator and the consumer in the movement of extracted oil than in the movement of flower.

Novel?

It was announced on January 2019 that the European Food Safety Association, EFSA is about to make a decision in order to classify CBD oil and other CBD products as a novel food. This decision was announced at the Novel Food Commission meeting which was held in Brussels in 2016. This led to a final imminent decision very soon and EFSA considered CBD products as Novel Food.

In recent times, there has been tremendous growth in food products available in the market which eventually included Cannabidiol. And, according to reports, it is clear that the European CBD Market is going to encounter a boom in the near future. Eventually, the regulators started taking a closer look at the CBD products and oil available in the European market.

In Other News

MediPharm Labs

MediPharm Labs (MEDIF) reported that its second-quarter revenue was $31.5 million, a 43% increase over Q1 2019, reflecting Canadian cannabis extraction-only industry and the ramp-up of new committed contracts. Gross Profit was $11.3 million, a 65% increase over Q1 2019, while Gross Margin was 36% compared to 31% in Q1 2019, reflecting increased production and production efficiency that continues to improve as the Company realizes economies of scale. Adjusted EBITDA was $7.7 million, 79% higher than Q1 2019, while Adjusted EBITDA margin was 24% compared to 20% in Q1 2019. Net income before tax was $4.1 million compared to a net loss of $0.3 million in Q1 2019

MariMed

MariMed (MRMD) report that its revenues for the second quarter of 2019 were $25.7 million, up 774% compared to $2.9 million in the same year-ago quarter. The increase in revenue was primarily the result of hemp seeds sales totaling $25.2 million dollars, of which $22.0 million was recognized in the quarter. The remaining revenue is expected to be recognized in the third and fourth quarters of 2019 upon payment from the buyer. Revenues excluding the hemp seed sales increased 24% to $3.7 million versus the year-ago quarter.

Gross profit for the second quarter of 2019 was $8.9 million or 34.8% of revenues, up 341.1% from $2.0 million or 68.9% of revenues in the same quarter from a year ago. Gross profit in MariMed’s core businesses as a percentage of revenues increased to 72.4% in the second quarter of 2019 from 68.9% in the year-ago quarter. Net income for the second quarter of 2019 was $4.7 million or $0.02 per fully diluted share, improving from a net loss of $393,000 or $(0.00) per basic share in the year-ago quarter.

Medicine Man Tech

Medicine Man Technologies, Inc. (OTCQX: MDCL) announced that it has entered into a binding term sheet to acquire Colorado-based Dabble Extracts, an award-winning cannabis concentrate company that specializes in processing medical and recreational marijuana into premium-grade extracts.

Under the terms of the term sheet, the company will pay $3,750,000 for Dabble Extracts. The purchase price will consist of $750,000 in cash and 996,678 shares of common stock priced at $3.01/share, which is the average closing price of the Company’s stock for the five trading days prior to August 6, 2019. The terms can also be referenced in the 8-K, which outlines the closing conditions. The obligations of the Company and Dabble Extracts under the term sheet are conditioned upon the satisfaction of mutual waiver of certain conditions, including regulatory approval.

Nabis

Nabis Holdings Inc. (CSE: NAB) (OTC: NABIF has entered into a Definitive Agreement for the acquisition of 100% of the membership units of a licensed medical marijuana business in the state of Arizona.

The Asset, licensed under the provisions of the Arizona Medical Marijuana Act, operates a dispensary in Phoenix, Arizona. The dispensary in Phoenix has been operating since 2015 with proprietary branded products and wholesale operations, including an established distribution network serving more than 50% of the dispensaries in Arizona.

The audited sales for 2017 and 2018 were USD $7.4 million and $8.7 million respectively.  2019 unaudited revenue is on pace for sales of USD $9 million. The dispensary specializes in top-tier flower, vape pens, concentrates, edibles, tinctures, and CBD products.

 


StaffStaffMay 13, 2019
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3min10720

MariMed Inc. (OTCQB: MRMD) reported that in the first quarter ending March 31, 2019, revenues grew 69% to $3.5 million versus last year’s $2.1 million for the same time period. The company trimmed its net losses for the quarter to $23,211, a 99% improvement over the $1.9 million loss for the first quarter of 2018.

MariMed delivered a breakeven quarter on a per share basis versus the $.01 per share loss for the same period in 2018. Gross profits grew 90% to $2.2 million vs. $1.2 million for the first quarter of 2018 compared to the same period in 2018.

“We continue to see dynamic growth in our cannabis operations, even as we have become a significant early mover in the burgeoning CBD health and wellness market,” said MariMed CEO Bob Fireman. “We are encouraged by our continued strong operating performance, and look forward to realizing the benefits of investments and initiatives undertaken over the last two quarters, which include the ongoing consolidation of cannabis operations, the opening of additional cannabis facilities in several states, expanding the licensing of our brands and products into additional licensed states, and our multi-pronged entry into the CBD market.”

MariMed Inc. outlined the strategic steps it took in the hemp-based CBD market to complement its existing seed-to-sale cannabis operations. As per the company statement, MariMed said it established MariMed Hemp Inc., a wholly owned subsidiary of MariMed, Inc. to leverage significant opportunities in the hemp-based CBD market for health and wellness products. The company said it is developing new and innovative CBD brands and products that will be distributed to retailers and through representatives to health and medical businesses. It converted debentures in GenCanna Global Inc. into a significant equity position in GenCanna, an industry leader in vertically integrated hemp cultivation and one of the nation’s largest producers of GMP compliant CBD products.

Contributing to the improvement in the first quarter of 2019 compared to the first quarter of 2018, was the company’s share of net earnings in GenCanna of $2.0 million, as that organization benefits from the growing demand for CBD products globally.


William SumnerWilliam SumnerApril 25, 2019
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4min9520

It’s time for your Daily Hit of cannabis financial news for April 25, 2019.

On The Site

Bank of America Merrill Lynch Initiates Coverage On Cannabis Industry

It was a significant move for the financial industry and the cannabis industry when Bank of America Merrill Lynch (BAML) released a 62-page report entitled “A cannabis world… and more people are living in it.” Green Market Report combed through this detailed report to find some poignant highlights brought forth by Bank of America Merrill Lynch in their analysis of the growing global cannabis market.

SOL Global

SOL Global Investments Corp. (CSE: SOL) (OTCQB: SOLCF), the owner of 3 Boys Farms, which holds one of Florida’s original 14 operating and vertically integrated medical marijuana treatment center licenses, has entered into a binding letter of intent with cannabis-focused private equity firm Merida Capital Partners  to acquire Merida’s Michigan subsidiary, MCP Wellness, Inc. in a deal valued at $150 million.

In Other News

Vireo Health

Vireo Health International, Inc. (CSE: VREO) announced that its patent application titled, “Tobacco Products with Cannabinoid Additives and Methods for Reducing the Harm Associated with Tobacco Use” has been approved by the United States Patent and Trademark Office (USPTO). The patent application covers the use of cannabinoids as a “harm reduction agent” in certain tobacco products such as cigarettes, pipe tobacco, or smokeless tobacco products.

MariMed

MariMed Inc. (OTCQB: MRMD) announced that its subsidiary MariMed Hemp will acquire a 70% of MediTaurus, which owns the CBD health and wellness brand Florance, which has an established retail presence in both the United States and the European Union. The acquisition is part of MariMed’s strategy to optimize its investment in the Kentucky-based CBD producer GenCanna Global Inc. Terms of the transaction were not disclosed. “We at MediTaurus are extremely pleased to be joining the MariMed family and combining our expertise to further develop innovative products and processes and creating world-class brands with fully compliant and transparent supply and production,” said MediTaurus CEO and co-Founder Dr. Jokūbas Žiburkus. “The current dynamic growth of hemp and medical cannabis presents unprecedented opportunities for synergies among scientists, medical practitioners, consumers, and the financial marketplace.”


Debra BorchardtDebra BorchardtApril 17, 2019
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8min14550

MariMed Inc. (OTCQB: MRMD) reported its fourth-quarter and 2018 results. For the quarter ending December 31, 2018, revenues grew 118% to $3.44 million versus $1.58 million for the same time period in 2017. The company did not break out additional details for the quarter, opting instead to just release the details for the full year.

Full Year 2018

For the full year 2018, revenues grew to $11.85 million, up 95% over $6.07 million reported for 2017; Adjusted EBITDA grew 53% to $2.4M. The company delivered a net loss for the year of $13.6 million which they attributed to the result of non-cash amortization relating to equity compensation granted during the year ($13.97 million). Loss per share was $0.71 for the full year.

MariMed CEO Bob Fireman said in a statement, “We are encouraged that the company maintained its strong operating performance and dynamic growth. We made a series of key investments to leverage opportunities we see for the years ahead, from branding and marketing to a major investment in GenCanna Global, perhaps the world’s leader in industrial hemp genetics and production.”

Hemp

The company said in its statement, that in November 2018, MariMed made a $30 million investment in GenCanna Global USA Inc. Based in Kentucky, GenCanna is a global innovator in hemp genetics, and with MariMed support will be one of the largest US producers of CBD derived from hemp. MariMed has established a new division, MariMed Hemp which will develop CBD brands and products, as well as pursue other high-margin business opportunities, as the hemp CBD industry separates from the cannabis industry.

Consolidation Plans

The company said in its filing that it has started the consolidation process “is at various stages of completion due to the respective state laws governing cannabis license ownership. Once the consolidation is completed, the company will own, manage, and operate cultivation, manufacturing and retail dispensary operations in these states.” The following was taken from the company’s filing:

Massachusetts

The company successfully converted ARL Healthcare Inc., its cannabis-licensed client, from a non-profit entity to a for-profit corporation with the Company as the sole shareholder. The Company now owns ARL and its cannabis licenses for cannabis cultivation, production and dispensing, with rights for up to nine statewide locations in both the medical and adult-use programs. The Company is constructing a 70,000 square foot state-of-the-art cultivation and production facility for ARL in New Bedford within the Company’s 138,000 square foot facility purchased in 2017. ARL’s manufactured cannabis products will be sold to licensed dispensaries throughout the state serving both the medical and adult-use markets.

The Company also owns a 22,700 square foot building in Middleborough in which a 10,000 square foot dispensary is planned to be open for business in May 2019. Furthermore, the Company intends to open two more dispensaries in the Boston area in 2019.

Maryland

The Company has entered into a memorandum of understanding to acquire Kind Therapeutics USA Inc. , its cannabis-licensed client that holds licenses for the cultivation, production, and dispensing of medical cannabis. The parties are finalizing a merger document to effectuate the transaction which is conditioned on the approval by the Maryland Medical Cannabis Commission, which is expected to occur in October 2019. Until then, the Company will continue to provide management and operational advisory services to Kind, whose operations are conducted within a 100,000 square foot cultivation and manufacturing facility within a Company-owned 180,000 square foot industrial building in Hagerstown. Additionally, the Company has contracted to purchase a 9,000 square foot building in Anne Arundel County for the development of a dispensary, currently scheduled to open in late 2019.

Illinois

In October 2018, the Company entered into a purchase agreement to acquire the ownership interests of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate Company-built and owned medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”), from the current ownership group of the KPGs. As part of this transaction, the Company will also acquire this ownership group’s interests in Mari Holdings IL LLC, the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries are located. The Company is currently awaiting approval for this transaction from the state, which is expected to be received in the near future.

Nevada

In November 2018, the Company contracted to acquire 100% of the ownership interests of The Harvest Foundation LLC, the Company’s cannabis-licensed client in the state of Nevada. The acquisition is conditioned upon the approval of the state cannabis commission which is in process. Harvest holds both medical and adult-use cannabis licenses, and operates in approximately 10,000 square feet of an industrial building that the Company leases and has built out into a cannabis cultivation facility.

Delaware

Delaware currently is a not-for-profit state with regard to the ownership of cannabis licenses. The Company provides comprehensive management and real estate services to First State Compassion Center (“FSCC”), the Company’s cannabis-licensed client which was awarded Delaware’s first ever seed-to-sale medical cannabis license, and owns two out of the four statewide licenses.

The state is expected to allow “for-profit” ownership of cannabis licenses in the near future, at which time the Company will look to acquire FSCC and obtain ownership of the licenses and operations

Rhode Island

Rhode Island currently is a not-for-profit state with regard to the ownership of cannabis licenses. The Company is in negotiations to purchase the real estate which is leased to its cannabis-licensed client, the Thomas C. Slater Compassion Center. Subject to state approval, the Company intends to acquire the management company that oversees Slater’s operations. After these transactions are completed, the Company will generate real estate and management fees until the state allows “for-profit” ownership, which is expected to occur in 2020. At that time, the Company will seek to acquire Slater’s cannabis licenses and operations.

 


Debra BorchardtDebra BorchardtNovember 12, 2018
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5min8450

It’s time for your Daily Hit of cannabis financial news for November 12, 2018.

On The Site

Aurora Cannabis (ACB) posted a 55% sequential gain in revenue for the fiscal first quarter of 2019 with $29.6 million over the fourth quarter’s $19.1 million. It was a 260% jump over the same time period for last year, which was $8.2 million. The quarter ended on September 30, so these numbers do not include sales from adult use cannabis that became legal on October 17.

However, the company did note for the first two weeks to October 31, 2018, it was ranking at the top or among top-selling products and brands in many of the provinces that it was committed to supplying.

Unfortunately, the Q1 2019 gross profit was $8.1 million, compared to a $20.6 million in Q4 2018. Aurora said that the change in gross profit during the period was partially attributable to higher sales of inventory and lower fair value gains on changes in biological assets. Having said that the first quarter net income jumped to $104.2 million versus last year’s $3.6 million in Q1 2018. The company attributed the increase to the unrealized non-cash gain on derivatives and marketable securities.

In Other News

Auxly Earnings

Auxly Cannabis Group Inc.  (OTCQX: CBWTF) reported its financial and operational results for the three and nine months ended September 30, 2018. The revenue for the quarter was $512,000 versus zero in the previous year for the same time period. The total loss was $28.3 million for the quarter. The company has  $236 million in cash and cash equivalents earmarked for funding Auxly’s streaming partners, wholly-owned subsidiaries, downstream distribution efforts and general and administration costs. The increase in the cash and working capital balances came from the company raising $215 million in debt and equity financings year to date in addition to raising $95,017,000 in warrant and broker warrant unit exercises.

MariMed

MariMed Inc. (OTCQB: MRMD) has invested $30 million into GenCanna Global Inc. and the companies have created a strategic partnership, including a long-term supply agreement. GenCanna will use the money to expand its production capacity, and extend its position in high-quality hemp CBD production, with fully legal sales throughout the U.S. and internationally. MariMed said it intends to create a product and branding business unit focused on the development and distribution of Hemp CBD-derived products.

“MariMed’s renowned product development expertise, combined with GenCanna’s leadership position in premium Hemp CBD, will enable us to expand the Hemp CBD product category by creating compelling new consumer brands, and by developing powerful distribution channels,” said Robert Fireman, President, and CEO of MariMed. Mr. Fireman continued, “GenCanna shares our values – including our ‘best practices values in producing premium-quality, consistent, and compliant Hemp CBD oils and extracts. We believe many of the nation’s leading retailers will soon provide Hemp CBD products to their customers, in response to popular demand.”



About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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