MJIC Archives - Green Market Report

Debra BorchardtMarch 19, 2019

California-based MJIC, Inc. successfully closed a private round of financing resulting in gross proceeds of U.S. $15 million. The company said it is planning on becoming a publicly traded company in 2019 and recently entered into a financial advisory agreement with Haywood Securities.

“This financing will significantly accelerate our growth strategy as we continue to build MJIC’s integrated distribution and retail platform across the entirety of the cannabis ecosystem,” said Sturges Karban, Chief Executive Officer and Board Member of MJIC.

The money will be used to hire key executives and expand MJIC’s licensed distribution infrastructure, enhance its manufacturing capabilities, and increase the depth of its reach across multiple retail channels throughout the State of California and the rest of North America.

“We could not be more pleased with the overall outcome of the transaction; in the aggregate, and through this single offering, we have raised more than three times the total amount we had initially targeted, only further validating MJIC’s value proposition and underscoring the unique opportunity from a truly vertically integrated platform.”

Last month, MJIC announced the acquisition of MyJane , a California-based wellness technology platform designed to curate personalized cannabis experiences for women, delivered privately to their homes. MyJane developed the service for women after conducting a first-of-its-kind study among 42,000 women in Orange County, California. Although 79 percent of survey respondents agreed that cannabis products can address their most common health and wellness issues, 30 percent of recreational or medicinal cannabis users felt uncomfortable purchasing through a dispensary. However, almost 80 percent of respondents expressed interest in trying a curated cannabis service just for women.

“MJIC’s strategic acquisition of MyJane goes well beyond our rapid expansion across California and planned public listing,” said Karban. “Women are the new targets of the adult-use cannabis wellness sector, yet their needs are not being addressed by the cannabis industry. Our strategic acquisition of MyJane will enable MJIC to close this gap with women.”

“MyJane exists to broker trust between women and the cannabis industry and normalizes cannabis usage,” said Kimberly Kovacs, Founder, and CEO of MyJane. “We’re achieving this by taking the guesswork and stigma out of researching and buying cannabis. Our vision is to create a community of one million women united by the benefits of cannabis, and we believe we can achieve this momentum through our merger with MJIC.”

StaffJuly 19, 2018

Part 2 of 8 of the Cannabis Trends for 2018: U.S. companies run north of the border and IPOs are on the rise.

Over the next year expect an increase of cannabis companies to start going public in Canada instead of the United States. Although the U.S. market has great potential in the long run, there are a lot of short term advantages to going public in Canada.

The first, and most obvious reason, is that Canada has legalized recreational cannabis sales.

Sure, nine states have legalized recreational cannabis, but it’s still federally illegal. US cannabis companies continuously have to look over their shoulders, hoping that the federal government isn’t about to kick down their door and make their business close its doors for good. Not to mention the fact that the entire U.S. market still operates as cash-only, with extremely limited access to banking services.

Put yourself in the position of a cannabis business owner: Would you rather operate in a market that has the *potential* of being more profitable but has no access to banking services and puts you at risk of being arrested? Or would you want to operate in a market that carries little legal risk and you can actually open a bank account? For many entrepreneurs, it’s a pretty simply choice.

One company that is not afraid to do business in both the United States and Canada is Sunniva. Headquartered in Calgary, Canada, Sunniva is on the fast track to becoming one of the first cannabis companies to be licensed in both Canada and California, which is one of the world’s largest cannabis markets.

Legality aside, there’s also the issue listing requirements in the U.S. Companies have to be meet very strict requirements in order to become listed on the New York Stock Exchange (NYSE) or NASDAQ. For example, in order to become listed on the NYSE you need to have publicly held securities that are valued at a minimum of $100 million. Likewise, companies hoping to go on NASDAQ need a pre-tax income of $11 million for an aggregate of three years.

Contrast that with the Canadian exchanges, where companies on the TSX only need a pre-tax income from the previous year totaling $300,000. Those are not the only requirements, of course, but from there you can get a pretty clear idea of how difficult it is to make it on the NYSE or NASDAQ compared to the CSE or TSX.

The vast majority of “cannabis companies” listed on the NYSE and NASDAQ are biopharmaceutical companies, like GW Pharmaceuticals, that aren’t primarily cannabis companies. The only two companies that are purely cannabis companies that are publicly listed in the United States is Cronos Group and Canopy Growth.

With fewer barriers and fewer risks, numerous companies that previously started as U.S. based companies have begun moving operations north of the border and are making preparations to go public. Some of those companies include Acreage Holdings, Dixie Brands Inc., and MJIC Inc.

In the short term, expect an exodus of cannabis companies either going public or completely moving their operations to Canada and expect them to stay there until the United States finally decides to tackle federal cannabis reform.

William SumnerMay 15, 2018

Without a doubt, The Green Organic Dutchman Holdings (TGOD) has one of the hottest IPOs in the cannabis industry right now. Initially slated to raise around $102 million, TGOD has amended their IPO twice due to investor demand and have grown an already impressive offering to $132,263,225.

For all the Johnny Come Latelys kicking themselves for not getting in on this red-hot IPO sooner, have no fear. There is already a handful of new investment IPOs waiting just around the corner, and they all look just as promising as TGOD. Here are four upcoming IPOs that you need to keep an eye on:

Acreage Holdings

Founded by a team of Wall Street veterans and financial gurus, Acreage Holdings is a well-financed company with a diverse portfolio. With licenses in cannabis cultivation, processing, and retail dispensaries; the company is currently operating in 11 U.S. states and has plans for further expansion. Most notably, the company rocked the world of cannabis and politics when it announced the addition of former U.S. Speaker of the House John Boehner and former Massachusetts Gov. Bill Weld to its board of advisers. So far the company has already raised $50 million and plans to go public in Canada sometime this year. With two heavy hitters like Boehner and Weld on their board and one of the largest cannabis cultivation footprints in the industry, Acreage is bound to give the top dogs like Canopy a run for their money.

Acreage is focused on medical marijuana and with a portfolio that spans 11 states, it has the largest footprint of any U.S. cannabis company. Initially, the company began life as High Street Capital and had intended on just making investments in cannabis companies, but it has since pivoted to become an operator. The IPO is expected to occur later this year in the Canadian market.

MedMen

This next IPO is not really an IPO, but nevertheless, it’s something that you should take note of. MedMen is a California-based cannabis retailer with operations in multiple states. As one of ten licensed medical cannabis operators in the state of New York, the company holds a lease on Fifth Avenue in Manhattan and will soon open a retail dispensary directly on the Las Vegas strip. Instead of doing a simple IPO, the company has decided to go public through something called a Reverse Takeover (RTO) and had entered into a letter of intent to merge with the publicly traded company OutdoorPartner Media Corporation. Instead, MedMen is doing its RTO with Ladera Ventures Corp. (TSXV:LV.H). Once the RTO is complete which is expected in the second quarter of this year, MedMen will essentially become a publicly traded company itself.

MedMen is also beginning life as a public company in Canada. Adam Bierman, the Chief Executive Officer, and Co-Founder says he believes the company can raise more money in Canada versus the U.S. stock market.

MJIC Inc.

Compared to the other IPOs discussed so far, this one has been flying under the radar a bit, which is why you definitely want to keep a close watch on MJIC Inc. MJIC is a self-described “omnichannel” for the cannabis industry attempting to connect the multiple segments of the industry through a variety of services that it offers; such as accounting, compliance, e-commerce, etc… The company hopes to launch its IPO sometime in the third quarter of this year and plans to use the funds for its expansion in California as well as future mergers and acquisitions down the road.

CEO Sturges Karban said the company plans on raising at least $20 million in the offering, which has been discussed for some time, but the planning began in earnest over the last couple of months. In addition to creating a distribution channel, MJIC also owns MJIC News and the Rolling Paper Depot.

Dixie Brands

The maker of the famous edibles brand, Dixie Elixirs, the Colorado-based cannabis company is currently considering its IPO options. This year the company expects to generate approximately $20 million in revenue and expects to more than double that figure ($50 million) by next year. Last month the company closed a $4 million funding round and hopes to use those funds to expand its operations from four states to 10. Details about its upcoming IPO are scarce, but what is known is that it would be offered either at the end of this year or sometime in early 2019. Speaking with Bloomberg, Dixie CEO and majority shareholder, Chuck Smith, said that the IPO would go towards funding future brand acquisitions. “We need access to capital, we need liquidity because this growth is very expensive,” said Smith. “We’re going to continue to acquire brands or innovate them.”

Jack SmithJanuary 24, 2018

As part of its quarterly rebalancing, MJIC Inc. has shifted around the companies that comprise the Canadian Marijuana Index. It’s added seven new companies from a wide range of areas in the cannabis sector, including those developing tools for law enforcement and licensed producers around the country.

New to the Canadian Index are Cannabix Technologies (BLOZF), which builds tools for law enforcement to detect THC in the breath; Harvest One Cannabis (HRVOF), a Vancouver-based licensed producer; InMed Pharmaceuticals (IMLFF), a drug discovery company focused on using cannabinoids and Invictus MD Strategies (IVITF), which manages and operates several Licensed Producers across Canada.

MJIC also added MYM Nutraceuticals (MYMMF), which is looking to launch cannabis production facilities in both Canada and Australia; THC Biomed (THCBF), a Kelowna, British Columbia-based producer and WeedMD (WDDMF), a licensed producer based in Aylmer, Ontario.

“The fourth quarter of 2017 saw significant gains in both the U.S. and Canadian cannabis public markets, as the North American Index increased 4% in October, 41% in November, and 61% in December,” MJIC Vice President Dan Nicholls said.

He added that the quarter saw highlights such as Constellation Brands’ $245 million CAD investment in Canopy Growth Corporation and that 2018 is off to a good start, with recreational cannabis coming online in California. Nicholls also said the Canadian Marijuana Index rose 188% in the fourth quarter, while the U.S. Marijuana Index jumped 85%.

The rebalancing comes at a time when the regulatory field is at a crossroads, especially in the U.S. In recent weeks, U.S. Attorney General Jeff Sessions rescinded memos from the Obama administration, specifically the Cole memo that allows for the medical or recreational use of marijuana.

There are minimum requirements to be added to the index, including market capitalization and trading volume restrictions. Companies can only be added if they have a weighted average minimum market capitalization of $40 million USD, the daily trading volume of $400,000 USD and a minimum share price of $0.10 USD.

If a company generated more than $5 million USD in revenue over the previous year, it’s exempt from the aforementioned requirements.

The U.S. Marijuana Index has 15 constituents, whereas the Canadian Index has 24 companies, giving the North American Marijuana Index a total of 39 constituents.

MJIC is a holding company that focuses “on providing distribution, media and events, and business services within the cannabis industry.”

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MJIC Archives - Green Market Report

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