Origin House Archives - Green Market Report

Debra BorchardtDebra BorchardtJanuary 8, 2020
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3min15010

As the cannabis industry faces pressure, the valuation retractions have caused several proposed deals to unravel. The lastest is between Bhang Inc. (CSE: BHNG) (OTCQX: BHNGF) and CannaRoyalty Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF). Bhang and its wholly-owned operating subsidiary, Bhang Corporation has terminated its agreement with Origin House and its wholly-owned subsidiary, Kaya Management, Inc.

With regards to the termination agreement, Bhang will get royalty payments, input materials, manufacturing equipment, Bhang-branded finished goods, and Origin House shares, collectively valued at approximately $1.1 million.

Bhang has said that it will use Trava, Inc. and Herban, Inc. to make Bhang-branded products in California. In addition, Bhang said that it has also contracted Shelf-Life Distributing to distribute these Bhang-branded products across California. The company stated that moving from a licensing model to a direct-to-retail model will allow it to control the use of its brand while substantially increasing its footprint throughout California and realizing operations-derived revenue rather than royalties.

Last month,  the company said that Jamie L. Pearson, Bhang’s Interim President, would assume the role of President & CEO, overseeing day-to-day management and strategic initiatives

Origin House

Earlier this week, Origin House said that it had received a final order from the Ontario Superior Court of Justice approving the plan for Cresco Labs Inc. to buy all of the shares of Origin House. The company said it expected to close the deal soon. Originally announced in April, this deal was valued at C$1.1 billion or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looked to be the largest public company acquisition in the history of the U.S. cannabis industry.

The combined company will be one of the largest vertically-integrated multi-state cannabis operators in the U. S.; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

Origin House has not made a comment regarding the termination of the deal with Bhang.


William SumnerWilliam SumnerDecember 12, 2019
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3min20010

The Illinois-based Cresco Labs (CSE:CL) (OTCQX:CRLBF) is looking to shore up its balance sheet by selling off one of its properties. Today the company announced that it would sell its Lincoln, Illinois cultivation facility to GreenAcreage Real Estate Corp. (GreenAcreage), for $50 million.

“This Agreement is representative of the comprehensive approach to capital planning that we anticipate will ensure our future success, while enabling us to grow our footprint both rapidly and responsibly,” says Charlie Bachtell, Cresco Labs CEO and Co-founder. “We have several opportunities right in front of us, including in our home market of Illinois, which will be moving forward with adult-use legalization on January 1st and is projected to reach $2 billion to $4 billion in annual sales at maturity.”

Though Cresco is technically selling the property, which is still under construction, the company has entered into a triple-net lease agreement with GreenAcreage and will continue operating on the property as a licensed medical & recreational cannabis cultivation and processing facility. Once completed, the facility will be around 220,000 feet and help the company maintain its considerable share of the Illinois medical cannabis market.

“We are confident that today’s announcement, together with the measured steps we continue to take to strengthen our capital position and continue investing in strategic U.S. cannabis markets, will generate significant returns for our shareholders, our employees and the communities in which we operate,” added Bachtell.

Over the last quarter, the company has been making moves to strengthen its finances through a number of similar deals. Last month Cresco announced a sale-and-leaseback agreement for its Marshall, Michigan and Yellow Springs, Ohio facilities, which totals $38 million. Cresco was also forced to amend its $800 million merger with Origin House, due to a combination of market forces and falling stock prices. After making some changes to the merger, which included an Origin House equity financing worth around $30 million, the value of the deal fell to roughly $416 million.


William SumnerWilliam SumnerAugust 28, 2019
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7min6710

It’s time for your Daily Hit of cannabis financial news for August 28, 2019.

On the Site

SLANG Worldwide

SLANG Worldwide Inc. (CNSX: SLNG) delivered its financial results in Canadian dollars for the second quarter ending June 30, 2019, with revenue increased sequentially by 44% to $7.2 million and a big jump over last year’s $440,000 for the same time period. More importantly, Slang reported a net income of $17.5 million in the quarter versus a net loss of $13 million for the same time period in 2018. An even bigger accomplishment sequentially with a net loss of $16.1 million in the first quarter.

Environmental Issues Decided For San Diego Cannabis Dispensaries

On August 19, 2019, the Supreme Court of California issued a unanimous opinion in Union of Medical Marijuana Patients, Inc. (“UMMP”) v. City of San Diego. Except for the parties and the limited number of individuals who follow litigation involving environmental law, this case has moved through the California court system with little notice.

Texas Cannabis Report Ceases Publishing

In June 2013 Texas Cannabis Report launched as a premier news agency dedicated to covering the issue of cannabis activism and policy. Texans did not have a reliable source of news in this area, prompting our formation. Six years later there has been much progress made in ensuring this under-served community has access to quality and reliable information.

Green Thumb Industries

Green Thumb Industries Inc.  (CSE: GTII) (OTCQX: GTBIF) reported that its second-quarter revenue increased 228% to $44.7 million for the period ending June 30, 2019, over last year’s $13.6 million.  Revenue grew 60% over the first quarter of 2019. The company said that the revenue growth was driven by organic growth across GTI’s consumer products and retail businesses, strategic acquisitions and increased store traffic.

In Other News

TILT Holdings

TILT Holdings Inc. (CSE: TILT) (OTCQB: SVVTF) has released its financial results for the quarter ending on June 30, 2019. Revenue was $39 million, up 13% from the previous quarter. EBITDA was a loss of $4 million, up from a loss of $7.9 million. The net loss was $48.9 million. “The second quarter was a highly productive period for TILT. We continue to optimize our organization, including the dismissal and re-alignment of senior leadership, accelerate integration efforts, dramatically reduce overhead and instill an enhanced focus on profitable growth. TILT is making progress on our key initiatives to drive operational stability and progress toward profitability…” commented TILT Holdings interim CEO Mark Scatterday.

Origin House

Origin House (CSE: OH) (OTCQX: ORHOF) released its financial results for the three and six month period ending on June 30, 2019. Revenue for the quarter was $21.4 million. The gross margin was $4.4 million and adjusted EBITDA was a loss of $21 million. The net loss was $34.9 million. “”I am very proud of the entire Origin House team for generating another quarter of record revenue growth, leveraging the California brand support and distribution platform we built over the past several years, to deliver results for shareholders,” said Origin House CEO Marc Lustic.

Curaleaf Holdings

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) announced the release of its financial results for the second quarter. Total revenue for the quarter rose from $35.25 million in the previous quarter to $48.48 million. Adjusted EBITDA was $3.35 million, up from a loss of $3.6 million. The net loss was $24.54 million. “With the industry’s largest operational footprint, we have the scale to rapidly accelerate growth across the country. I continue to believe Curaleaf is the best positioned operator in the cannabis space with the potential to create substantial shareholder value,” said Curaleaf CEO Joseph Lusardi.

TerrAscend

TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF) announced that it has signed a definitive agreement to purchase ABI SF, LLC, which operates a Bay Area cannabis cultivation facility and owns the premium cannabis brand State Flower. Initially, TerrAscend agreed to purchase 49.9% of State Flower for $2.85 million, along with extending a line of credit up to $3.75 million for cultivation facility improvements. The company has since upped its stake to 50.1%.

Vibe Bioscience

Vibe Bioscience Ltd. (CSE: VIBE) released its financial results for the three and six months ending on June 30, 2019. Quarterly revenue rose from $1.31 million in the first quarter to $3.09 million. The gross margin was $1.2 million and adjusted EBITDA was $113,322.


William SumnerWilliam SumnerJuly 18, 2019
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5min7040

It’s time for your Daily Hit of cannabis financial news for July 18, 2019.

On the Site

Aurora Cannabis

Italy has chosen Canadian-based Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB) as the sole winner of the Italian government’s public tender to supply medical cannabis in Italy. The contract is expected to be signed in September 2019… It will be a two-year contract in which Aurora will provide 400 kg of medical marijuana from its Canadian facilities.

5 Ways To Fix The California Cannabis Market

While it would be wonderful to have the luxury of starting over again, rebooting is not an option for California. The past cannot be changed. Those who are interested in addressing the chaos in the regulation of California’s cannabis industry must go forward from where we are today.

 In Other News

Neptune Wellness Solutions

Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) announced that it has closed a private placement offering of 9,415,910 common shares of the company, at a price of $4.40 per share, for $41.4 million. The offering was led by Perceptive Advisors. The proceeds of the offering will go towards working capital, general corporate purposes, and the acquisition of the assets of SugarLeaf Labs LLC and Forest Remedies LLC. The SugarLeaf acquisition is expected to close on or around July 31, 2019.

MediPharm Labs

MediPharm Labs Corp. (TSXV: LABS) (OTCQX: MEDIF) announced that it has received conditional approval to trade it shares on the Toronto Venture Exchange and list its common shares on the TSX under the symbol “LABS”. “We are thrilled to have qualified to uplist to the TSX. This is an important step for the MediPharm Labs team and our shareholders,” said MediPharm Labs CEO, Patrick McCutcheon.

Origin House

Origin House (CSE: OH) (OTCQX: ORHOF) announced that its preliminary unaudited revenue for the second quarter, ending on June 30, 2019, was $21 million, representing an approximate gross margin, excluding fair value items, of 17%. The company plans on releasing its full financial results for the quarter during the second half of August. “Origin House has continued to gain momentum as our team leveraged the California-focused platform we have built over the past two years to drive another quarter of record revenue along with steady progress on gross margin. As expressed previously, we strongly believe that 2019 will mark an inflection point both for the California market and Origin House as a whole and the numbers are proving this out,” said Marc Lustig, Chairman and CEO of Origin House.

Akerna Corp.

Akerna Corp. (Nasdaq: KERN) announced today that it has partnered with Leafly to integrate its seed-to-sale compliance software, MJ Platform, with Leafly.com. With the integration, MJ Platform users will be able to view their inventory and menus automatically update on Leafly. “MJ Platform is the cannabis industry’s first ERP software and through partnerships, such as the one with Leafly, we provide a leading compliance, technology platform across the entire supply chain that connects almost every data point,” said Akerna CEO, Jessica Billingsley. “The partnership with Leafly provides a seamless integration for MJ Platform users, which is good business practice as it eliminates manual updates and delayed information.”


William SumnerWilliam SumnerMay 29, 2019
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6min6960

It’s time for your Daily Hit of cannabis financial news for May 29, 2019.

On the Site

Acreage Holdings

Acreage Holdings, Inc.  (ACRG-U.CN) (ACRGF) reported financial results for the quarter ending March 31st, 2019 with revenue rising 487% to $12.9 million, but the company also delivered a whopping net loss of $31.2 million.  Looking at pro forma results, the revenue would have been $33.1 million and the adjusted net loss would have been $15.5 million.

Special Report: Current Issues in Marijuana Regulation – Veterans Struggle to Gain Access to Medical Marijuana

Thirty-three states and the District of Columbia have enacted medical marijuana programs. Despite this expansion military veterans often face greater obstacles to gaining access to medical marijuana than other groups.

Another Delay for New Jersey Cannabis Legalization

An ongoing political saga took another unpredicted turn this month. After over a year of building momentum, hopes for a legislative vote on legalizing the adult-use of recreational cannabis have once again faded.

In Other News

Charlotte’s Web Holdings

Charlotte’s Web Holdings, Inc. (CSE: CWEB) (OTCQX: CWBHF) announced that it has received conditional approval to list its common shares on the Toronto Stock Exchange (TSX). The company anticipates that it will begin trading as of market open on May 31, 2019. As part of its listing on the TSX, the company will delist its stock on the Canadian Securities Exchange at the close of the market on May 30, 2019. “As the market leader in hemp CBD extract products, we are very proud to be the first US-based hemp company to receive a senior listing on a major exchange such as the TSX,” said Joel Stanley, Chairman and Co-Founder of Charlotte’s Web. “The TSX is Canada’s most senior exchange and a tremendous validator of our company’s corporate governance and evolution.”

Origin House

Origin House (CSE: OH) (OTCQX: ORHOF) released today their financial results for the first quarter of 2019. Revenue for the quarter was $11.2 million, the gross margin was $1.7 million, and adjusted EBITDA was $12.7 million. As of March 31, 2019, the company had $39.3 million in cash and approximately $269.4 million in assets. On Jun 11, 2019, Origin House will hold a special shareholders meeting regarding Cresco Labs Inc.’s previously announced acquisition of all of the company’s issued and outstanding shares.

TREC Brands

TREC Brands Inc. announced the launch of two brands, WINK and Blissed, and a $10 million private placement. Blissed is a female-focused cannabis oil brand and WINK is TREC’s second luxury cannabis brand. “We are proud of the premium nature of our organization and our actions to create an industry-wide movement around community support,” says Trang Trinh, CEO, TREC Brands. “With Blissed, the goal is to uplift the modern woman through education and content that complements her lifestyle, while giving back to causes in her neighborhood that matter.”

MedMen Enterprises

MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) today released their financial results for the third quarter for the 2019 fiscal year. Revenue rose by 22% to $36.6 million. The gross profit margin  after biological asset adjustment was 53.7%. For the quarter, the company reported an adjusted EBITDA loss of $42.6 million and a net loss of $63.1 million. “Over the past nine years, MedMen has built the most valuable retail brand in the cannabis industry by taking advantage of the land grab opportunity and scaling with speed to secure as many flagship assets as possible,” said Adam Bierman, MedMen co-founder and chief executive officer. “We continue to march onward towards profitability.”


Debra BorchardtDebra BorchardtMay 17, 2019
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3min8320

Origin House, formerly known as CannaRoyalty (CSE: OH) (OTCQX: ORHOF)  announced preliminary unaudited revenue of approximately C$11 million for the first quarter ending March 31, 2019. No profit or loss numbers were revealed.

The company also noted that April was off to a good start with approximately C$6.5 million in unaudited revenue. The wholly-owned distribution division, Continuum contributed approximately $4.8 million of that amount in April.

“As we outlined on our Q4 call less than a month ago, momentum is building in the California market for all legal players and for Origin House specifically. Q1 and the month of April were record revenue periods for the Company, and also record periods for the number of top California cannabis brands that our team successfully onboarded,” said Marc Lustig, Chairman and CEO of Origin House. “If 2018 was a year of building for Origin House, 2019 is rapidly progressing toward an inflection point where the platform we have built begins to demonstrate its true financial power, with brands signed early in the year, rolling-out through our network and a robust pipeline of brand opportunities ahead of us.”

The approximate gross margin for the first quarter was 15% and the company said it expects gross margin to continue to trend upwards from the first quarter to the second.

The company announced on May 3, that it had obtained an interim order from the Ontario Superior Court of Justice in which Cresco Labs Inc. will acquire all of the issued and outstanding shares of Origin House. Receipt of the interim order authorizes Origin House to hold its special meeting of shareholders on June 11, 2019.

Lustig added, “I very much look forward to working alongside the team at Cresco Labs Inc. to leverage our complementary footprints and management skillsets to build a dominant North American cannabis consumer brands company.”

Both Cresco Labs and Origin House will release their earnings on May 29.


William SumnerWilliam SumnerApril 29, 2019
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6min6560

It’s time for your Daily Hit of cannabis financial news for April 29, 2019

On The Site

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) reported that its 2018 total revenue was $3.3 million versus zero in 2017. The pro-forma combined Aleafia Health and Emblem revenues in 2018 were $11.3 million an increase of 327% over a combined Aleafia Health and Emblem 2017 revenues of $2.7 million. Still, the company delivered a net loss from operations in 2018 of $9.7 million.

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. The company said that design development would begin immediately with construction expected to start this summer.

Origin House

Canada-based Origin House (once known as CannaRoyalty Corp.) (CSE: OH) (OTCQX: ORHOF) reported its fourth quarter and year-end results ending in December 2018 in Canadian dollars. The fourth quarter saw revenues of $7.9 million an increase of 638% over last year’s $1.1 million for the same time period. The net loss for the quarter was $6.1 million.

In Other News

Charlotte’s Web Holdings

Charlotte’s Web Holdings Inc. (CSE: CWEB) (OTCQX: CWBHF) has a new CEO. The company announced today that Adrienne “Deanie” Elsner would sign on as its Chief Executive Officer effective May 15, 2019.  Elsner previously served as President of Kellogg’s $3 billion Snack Business Unit. Before joining Kellogg, Elsner worked at the Kraft Foods Company and held various leadership positions, including Executive Vice President and Chief Marketing Officer. Elsner was also named by Forbes as one of the 50 Most Influential Global CMOs. “Deanie’s appointment is timely and aligns perfectly with our corporate evolution from the early stage organization we were just two years ago into a professionally managed public company with top-tier executive talent,” said Hess Moallem, current President and CEO of Charlotte’s Web. Moallem will stay on with the company in an advisory position.

New Leaf Data Services

New Leaf Data Services (NLDS), and the Cannabis Mercantile Exchange (Cannamerx) have signed a data-sharing agreement, upon which Cannamerx will provide NLDS with real-time data generated by its international cannabis and hemp trading platform. NLDS will incorporate the platform into its Cannabis Benchmarks® and Hemp Benchmarks® wholesale price assessments. NLDS will help Cannamerx market its international wholesale cannabis & hemp products auction platform, which includes informing its business partners and subscribers about the benefits of using Cannamerx platform. “We are pleased to have entered into this agreement with Cannamerx, which will expand and deepen the wholesale pricing data that is the foundation for our institutional grade Cannabis Benchmarks and Hemp Benchmarks,” commented NLDS CEO Jonathan Rubin.

Cannara Biotech

Cannara Biotech (CSE: LOVE) (FRA: 8CB) has announced its financial results for the three month and six-month periods ended February 28, 2019. Cannara ‘s revenue for the three-month period was $518,438 and for the six-month period was $1,036,881. The net loss for the three month period was $4,011,926 or $0.01 loss per share. The net loss for the six-month period was $6,317,152 or $0.01 loss per share. The company also raised $37,375,268 via private placement in exchange for 207,640,375 common shares. “Financially, Cannara is very solid, with all costs associated with Phase one construction fully funded and most stabilized operating costs offset by lease revenue,” said Lennie Ryer, CFO of Cannara. “Built for the long run, the next few quarters will be eventful as we complete construction and advance towards the goal of ongoing revenues from our state-of-the-art production and processing facility.


Debra BorchardtDebra BorchardtApril 29, 2019

4min7750

Canada-based Origin House (once known as CannaRoyalty Corp.) (CSE: OH) (OTCQX: ORHOF) reported its fourth quarter and year-end results ending in December 2018 in Canadian dollars. The fourth quarter saw revenues of $7.9 million an increase of 638% over last year’s $1.1 million for the same time period. The net loss for the quarter was $6.1 million.

The adjusted EBITDA loss was $1.9 million versus the adjusted EBIDTA profit of $7.9 million for last year’s fourth quarter. Gross margin, excluding fair value items, was $0.2 million as compared $0.1 million, an increase of 87%; Operating expenses were $15.4 million as compared to $4.6 million, an increase of 233%.

Full Year Results

For 2018, the company delivered revenues of $18.7 million an increase of 507% over 2017’s $3.1 million. The net loss for the year was $9 million. The pro-forma revenues were $37.4 million and were $48.7 million with the acquisition of 180 Smoke on February 19, 2019.  The adjusted EBITDA profit of $3.4 million versus the 2017 adjusted EBIDTA profit of $4.1 million. Gross margin, excluding fair value items, was $1.5 million as compared $0.9 million, an increase of 67%.

Cresco Labs Acquisition

On April 1, 2019, Origin House agreed to be acquired by Cresco Labs for $1.1 billion, creating a North American cannabis powerhouse. Last year, Origin House acquired Kaya Manufacturing, Alta Supply, RVR Distribution, FloraCal Farms, and 180 Smoke in 2018 to create a footprint today comprised of 6 licenses, 8 facilities, and over 350 employees in California and Canada, with pro-forma revenue of $37.4 million. Pro-forma revenue reached $48.7 million with the acquisition of 180 Smoke in Q1 2019.

“During 2018, Origin House delivered demonstrable value creation for shareholders through organic execution, judicious acquisitions and the crystallization of value embedded in non-core assets,” said Marc Lustig, CEO of Origin House. “Throughout the year, we continued to aggressively build our platform of brands and distribution capability focused in California, and this culminated in reaching a definitive agreement to be acquired by Cresco Labs for $1.1 billion on April 1, 2019. This partnership is just the beginning of our journey together. The combined entity will be a U.S. distribution powerhouse, with a growing portfolio of over 50 brands on the shelves of over 725 dispensaries across 11 states.”

The company listed the following summary of key balance sheet totals as of December 31, 2018:

  • Cash was $69.2 million as compared to $4.5 million an increase of 1430%;
  • Total assets of $230.7 million as compared to $46.1 million, an increase of 400%;
  • Current assets of $86.0 million as compared to $7.9 million, an increase of 982%;
  • Current liabilities of $26.2 million as compared to $2.1 million, an increase of 1126%; and
  • Long-term debt financing of $16.0 million as compared to $2.3 million, an increase of 610%.

“We spent the past 12 months successfully implementing our strategy to build a platform of premium brands by creating the top distribution and brand support platform in California,” said Afzal Hasan, President and General Counsel of Origin House. “Our team executed and successfully integrated five acquisitions during the year while adding several key experiential brands to our Brand Accelerator and distribution platform. In March 2019, with the integration of our two distribution companies under the Continuum banner, Origin House now controls one of the top state-wide distribution networks in California. With 2018’s regulatory growing pains behind us and a recent commitment on the part of the government to redouble its efforts to quash the still-thriving illegal cannabis market in the state, Origin House is off to a running start in early 2019.”

 

 


Debra BorchardtDebra BorchardtApril 1, 2019
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7min20150

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  is acquiring CannaRoyalty Corp. also known as Origin House (CSE: OH) (OTCQX: ORHOF) in a deal valued at C$1.1 billion or C$12.68 per Origin House Share (based on the Exchange Ratio and the closing price of Cresco Labs Shares on March 29). The deal looks to be the largest public company acquisition in the history of the U.S. cannabis industry.

The combined company will be one of the largest vertically-integrated multi-state cannabis operators in the U. S.; a leading North American cannabis company, by footprint; and one of the largest cannabis brand distributors.

“The acquisition of Origin House is another example of our focused and disciplined approach to creating a meaningful presence in key cannabis markets through excellence in brand development and distribution,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “It establishes Cresco Labs as the leading multi-state operator with one of the largest distribution platforms in California. Having a similar priority on consumers and consumer brands with the expertise of executives from the largest wine and liquor distribution company in the United States, the team at Origin House has established the premier cannabis distribution company in the largest cannabis market in the world. It’s an incredible platform for Cresco in California and the distribution infrastructure will provide a valuable framework to leverage as we scale our platforms in other states.”

Origin House

Origin House is a growing cannabis brands and distribution company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The company’s foundation is in California where it delivers over 130 branded cannabis products from 50+ brands to the majority of licensed dispensaries. Origin House’s brand development platform is operated out of five licensed facilities located across California and provides distribution, manufacturing, cultivation and marketing services for its brand partners. Origin House is actively developing infrastructure to support the proliferation of its brands internationally, initially through its acquisition of Canadian retailer 180 Smoke.

“From an Origin House perspective, this transaction is directly aligned with our strategy to build a leading portfolio of cannabis brands in California and to rapidly and accretively take those brands to the rest of the U.S. market, as well as the Canadian market,” said Marc Lustig, Chairman, and CEO of Origin House. “By partnering with one of the largest and most innovative U.S. multi-state operators in existence today, Origin House will supercharge its growth and be in a position to offer its brand partners access to 10 additional states, with licenses and supporting infrastructure already in place.  This Transaction is not the first opportunity we have reviewed, but it has received the unanimous support of our board and large shareholders because we are confident that together we will be in a position to truly change the face of the global cannabis industry while continuing to create significant value for the shareholders of both companies.”

Terms Of The Deal

Cresco Labs will acquire all of the issued and outstanding Origin House Shares, with each holder of Origin House common shares receiving 0.8428 Cresco Labs Shares for each Origin House Share (and each holder of an Origin House proportionate voting share receiving 84.28 Cresco Labs Shares for each proportionate voting share held), which implies a price per Origin House Share of C$12.68 (on an as-converted basis), representing a total consideration of approximately C$1.1 billion (on a fully-diluted).

Origin House shareholders will hold approximately 20% of the issued and outstanding Cresco Labs shares on a pro forma, fully-diluted and as converted basis, enabling Origin House shareholders the opportunity to participate in the expected value created through the deal. The company said there would be an immediate premium to Origin House shareholders of approximately 26% over the 30-day volume weighted average price.

Upon completion of the acquisition, as well as the receipt of licensure in Michigan and the closing of the company’s pending acquisition in Florida, Cresco Labs will have operations in 11 states, 23 facilities, more than 1.5 million square feet of cultivation, and licenses to operate up to 51 retail dispensaries. Cresco Labs brands will be sold in over 725 dispensaries across the United States.

“We are excited to welcome the Origin House team to the Cresco family,” said Cresco Labs President and Co-founder Joe Caltabiano. “With the addition of Origin House and its vast distribution network in California, we will have access to incredibly valuable real-time market data and insight into consumer buying patterns that will inform our product development strategies and reinforce our brand strength. In addition to their brand building and distribution expertise, Origin House has a very experienced M&A, corporate development and capital markets team that will be extremely valuable as we continue to expand and add scale through additional transactions. With respect to the capital markets impact, with the equity issued through this transaction, we expect to have substantially more shares in our float, which we believe will provide ample liquidity for larger institutional investors looking to deploy capital into the cannabis space. We expect that our larger scale and improved liquidity following this acquisition will positively impact our ability to attract a larger universe of potential investors and reduce our cost of capital in the future.”

 

 


StaffStaffFebruary 5, 2019
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6min7930

It’s time for your Daily Hit of cannabis financial news for February 5, 2019.

On The Site

Verano

Illinois-based Verano Holdings, LLC has acquired Four Daughters Compassionate Care Inc. of Sharon, Massachusetts and its provisional medical cannabis licenses for an undisclosed amount. The first cultivation and dispensary facilities in Sharon are expected to open in six to nine months. The company said it would hire 50-75 employees locally and train them for these sites in 2019.

As a result of the acquisition, Verano has begun building a cultivation and production facility in Sharon Massachusetts. The company is also renovating an adjacent building for the dispensary. The acquisition marks Verano’s expansion into an additional adult-use market and its expanding geographic footprint into the Northeast from its current 10 operating facilities in Illinois, Maryland, Nevada and Florida, with 45+ licenses under active development in Florida, Michigan, Ohio, Puerto Rico, and Maryland.

GTI

Green Thumb Industries Inc. (OTCQX: GTBIF) is acquiring For Success Holding Company, the owner of Los Angeles-based Beboe branded cannabis products for an undisclosed amount that will be paid in GTI stock.

Beboe is known as a premium brand for its high-end packaging including its iconic rose gold vaporizer pens. The products are available in more than 125 California and Colorado retail locations and via home delivery across California.

In Other News

Jushi

Sound Wellness LLC, a subsidiary of Jushi Inc. has received approval of its industrial hemp-CBD processor license application as part of the New York State Industrial Hemp Agricultural Research program, administered by the New York State Department of Agriculture and Markets. With this announcement, Jushi is proud to support the Western New York community, New York farmers, and the nation’s premier industrial hemp program. Sound Wellness’ hemp-CBD processor license supports the company’s initiative to create product innovations centered around the untapped potentials of hemp.

By investing over $5 million in a high-tech hemp processing operation on the east side of Buffalo, NY, Jushi expects to create approximately 30-65 jobs in the area. The facility will house a state-of-the-art lab, allowing Sound Wellness to create advanced product formulations using CBD distillate, CBD isolate, and water-soluble CBD.

The Flowr Corp.

The Flowr Corporation (OTC: FLWPF)  has submitted an application to list its common shares on The NASDAQ Capital Market and has filed a Form 40-F Registration Statement with the U.S. Securities and Exchange Commission.

Target Group Inc.

Target Group Inc. (OTCQB: CBDY) entered into an agreement to acquire Massachusetts-based CannaKorp Inc. CannaKorp is the holder of the patent-pending WISP vaporizing system.

The WISP™ is a pod-based, herbal vaporizing system that uses precisely measured, sealed and tested WISP™ Pods containing dried, ground botanicals. The WISP™  vaporizer, used together with WISP™  Pods, gives cannabis users the predictability and assurance to know what they’re inhaling with every use, without the hassle of grinding, measuring, or packing. For the rapidly evolving market of cannabis consumers who prefer vaporization, Wisp™ presents a proven method of delivery with unique bioavailability benefits and avoids the health concerns associated with the combustion of cannabis and other herbs.

Origin House

CannaRoyalty Corp. d/b/a Origin House  (OTCQX: ORHOF) entered into an agreement to provide strategic financing of US$704,000 to Humboldt’s Finest, an alliance of heritage cannabis farms representing Humboldt County. Humboldt’s Finest produces sun-grown cannabis flower on their farms in Humboldt County, California, which is processed into products including jarred flower, pre-roll flower joints, live resin dabs/jars and/or live resin cartr



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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