John SchroyerJanuary 23, 2023
Challenges are often a result of the financing structure itself.
Pelorus Equity Group Archives - Green Market Report
John SchroyerJanuary 23, 2023John SchroyerJanuary 11, 2023
StaffNovember 15, 2022
The Daily Hit is a recap of cannabis business news for Nov. 15, 2022.
ON THE SITE
California Cannabis Debt Bubble on Verge of Bursting
A slow but steady years-long trend of licensed marijuana companies in California not paying all of their bills might be nearing its climax, industry insiders warned, and a wave of business failures is on the way if (when) the debt bubble explodes. Read more here.
Kentucky Governor Provides Pathway for Medical Cannabis Use
The governor of one of last states holding out on medical cannabis signed an executive order today permitting possession and use of the product. Kentucky Gov. Andy Beshear signed the order Tuesday, pardoning “any and all persons” accused of marijuana possession after the order’s effective date of Jan. 1, 2023, provided certain conditions were met. Read more here.
Michigan’s Canapa Valley Farms Closes on $17 Million Deal With Pelorus
Pelorus Equity Group closed a $17.3 million debt financing agreement with Vassar Acquisitions Property Management and its cannabis operating entity, Canapa Valley Farms. The money will be used for building out Canapa’s state-of-the-art 90,000-square-foot greenhouse and 8,500-square-foot processing facilities. Read more here.
Cresco Labs Slashes Losses Despite Significant Headwinds
Sales for Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ), a vertically integrated, multistate operator, ticked down in the third quarter ended Sept. 30 to $210 million, in part due to the company’s exit from third-party distribution in California. Read more here.
Halo Stretches Margins Despite Lower Q3 Revenue
Halo Collective Inc. (NEO: HALO) (OTCQB: HCANF) posted results that showed rising margins despite lower revenue, driven by cost-cutting measures amid a congested supply side in California and Oregon. Revenue totaled $5.5 million, down 36% from $8.7 million in the same quarter last year. Read more here.
IN OTHER NEWS
Decibel Cannabis Company
Decibel Cannabis Company Inc. (TSXV: DB) (OTCQB: DBCCF), a premium cannabis producer, achieved 5.3% national market share in October 2022, which places Decibel as the sixth-largest LP in Canada by market share. The company reported $18.3 million of total net sales in Q3, with a sequential decline of 1% over Q2 2022 and an increase of 37% over Q3 2021. Read more here.
Trees Corp.
Trees Corp. (NEO: TREE) increased its revenues in the third quarter by 60% from the first quarter of 2022, while total gross profit has increased by 78% over the same period due to a strengthening retail gross profit margin percentage. Read more here.
Stone Road
Stone Road, a California-based line of premium, sustainably grown cannabis products, announced a partnership with Gamut Cannabis to bring Stone Road’s line of products to Michigan in early 2023. This marks the rapidly growing brand’s fourth market launch, as it continues to expand into legal states across the U.S. Read more here.
Adam JacksonOctober 12, 2022
Proceeds will support TerrAscend’s ongoing growth initiatives in New Jersey and Maryland.
StaffAugust 2, 2022
Pelorus Equity Group closed on a $15.8 million debt financing agreement with TransCanna Holdings Inc. The company said in a statement that the proceeds would be used to refinance and develop TransCanna’s California facility, as well as for construction costs, and the payment of interest on existing debt.
TransCanna was founded by industry pioneer and advocate Bob Blink – with one lamp and a couple of plants 25 years ago. Following medical cannabis legalization in 1996, he was one of the first Cultivator/Distributors on the legal market in California. He converted his operation to serve the recreational cannabis market in 2016, forming Lyfted Farms, Inc. TransCanna Holdings acquired Lyfted Farms in 2019, and now the parent and subsidiary companies are working in tandem to build the enterprise into the largest and most operationally diverse and agile business of its kind in California.
“Successfully sourcing exciting investment opportunities with the cannabis industry’s leading companies is what sets Pelorus apart,” said Dan Leimel, CEO of Pelorus Equity Group and manager of the Pelorus Fund. “I am thrilled to partner with TransCanna to scale their cultivation capabilities and improve the availability of their award-winning products for the California market. I look forward to continuing to work with some of the largest players in the industry and seeing our many partners continue to flourish in this growing market.”
Terms
The $15.8 million debt facility accrues interest at 14% per annum. If certain requirements are met after 18 months, the interest rate will be reduced to 12% per annum. In connection with the loan, Pelorus issued warrants to purchase up to 51,208,682 common shares of the company. No common shares may be issued on exercise of the Loan Warrants if the issue of such shares would cause the holder (and any person acting jointly and in concert with the holder) from holding beneficial ownership or having control or direction over greater than 9.9% of the outstanding common shares. The Loan Warrants are subject to the company’s standard Put/Call Structure.
“In a rapidly evolving industry with many strict regulations and requirements, Pelorus has been influential in providing the capital necessary for continued development,” said Bob Blink, CEO of TransCanna. “We are extremely excited to partner with the Pelorus team as well as to fuel our growth in California.”
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