SOL Global Archives - Green Market Report

Debra BorchardtOctober 29, 2021
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SOL Global Investments Corp.  (CSE: SOL) (OTCPK: SOLCF) reported an unaudited earnings result for the quarter ending August 31, 2021, with a loss of $62.4 million versus last year’s income of $43.7 million for the same time period. Sol Global noted that this was a negative change of $106.1 million. The company attributed it to the one-time expense related to the settlement agreement with its former lender of $68.5 million.

For the quarter the company only reported $12.5 million in total gains from investments versus last year’s $60.3 million for the same time period. This represents a negative change of $47.8 million between periods. Sol Global claims this is due to an overall weakness in the market.

“Managing small cap and cannabis investments from the long side during third quarter was like playing tag in a minefield,” said Andy DeFrancesco, SOL Global’s Chairman and CEO. “Even positive news saw stock prices continue to drop. Once again my team battled through and we outperformed in our sectors. We remain extremely confident in our underlying holdings and will not transact from the pressures of short-term price fluctuations. We will stick to our 2 to 5 year time horizons on core positions which allow for smaller companies to properly execute on the business models we are backing.”

Loan Settlement Woes

Sol Global settled its litigation with its previous lender 1235 Fund. The two companies engaged in a battle over whether the once private Verano shares could be claimed as collateral for a loan. Sol Global tried to get the case moved to New York but was rebuffed. 1235 Fund had actually suggested that the shares were worth $500 million but ultimately settled for less.

In August it was announced that a subsidiary of SOL Global would buy all of 1235’s rights under the Debenture for C$120 million (which was C$68.5 million above the Debenture’s principal and accrued interest) and that was paid on September 7, 2021. The subsidiary got an equity investment from SOL Global which has entered into a loan agreement with an arm’s length private lender for a secured loan in the principal amount of C$50 million. The Loan will have a term of 12 months and will bear interest at the rate of 9% per annum.

The conflict between the two parties arose after Sol Global began claiming that MMCap and 1235 Fund had no rights to the Verano shares as repayment for a loan. Sol Global was in a cash crunch back in July 2019. The one thing of potential value it owned was a large investment in the privately-held cannabis company Verano. MMCap bought the debenture through what was called the 1235 Fund giving Sol $50 million with the risk that Sol could possibly go under and not repay the $50 million or the Verano shares could end up being worth much less than the $50 million it had spent. At the time, it was a risky deal as it was difficult to determine the outcome. Cannabis stocks were suffering through a tremendous bear market and valuations had plunged across the board. Sol Global wanted to just pay back 1235 Fund in cash, while 1235 Fund wanted to take the now publicly-traded  Verano shares as repayment.


Debra BorchardtJune 7, 2021
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Cannabis Law Reports reported that Sol Global (OTC: SOLCF) lost the first round in its lawsuit with investor MMCap. Sol Global had filed a case in the state of New York regarding the repayment of a $50 million loan. At the heart of the lawsuit is a big chunk of Verano shares, which MMCap and the 1235 Fund say belong to them as an option for the repayment of the loan, while Sol Global claims the shares belong to them alone and that all the 1235 Fund gets is a cash repayment.

Judge Jennifer Schecter wrote that of all interested parties only one, Verano Blocker 2, specifically agreed to New York as a place of jurisdiction. She also described the group as “sophisticated parties” suggesting all the parties understood what had been agreed to for jurisdiction. MMCap and the 1235 Fund filed their case in Ontario, which Judge Schechter said was consistent in the other clauses in the agreements signed by the parties.

“In the end, defendants never consented to personal jurisdiction in New York or waived the objection; thus, this action is dismissed. Moreover, jurisdictional discovery is unwarranted because the complaint does not make a sufficient start at suggesting there could even possibly be a basis for New York jurisdiction,” wrote the Judge in her two-page decision.

Sol Global did not respond to a request for comment.

Sol Global & The 1235 Fund History

The conflict between the two parties arose after Sol Global began claiming that MMCap and 1235 Fund had no rights to the Verano shares as repayment for a loan. Sol Global was in a cash crunch back in July 2019. The one thing of potential value it owned was a large investment in the privately-held cannabis company Verano. MMCap bought the debenture through what was called the 1235 Fund giving Sol $50 million with the risk that Sol could possibly go under and not repay the $50 million or the Verano shares could end up being worth much less than the $50 million it had spent. At the time, it was a risky deal as it was difficult to determine the outcome. Cannabis stocks were suffering through a tremendous bear market and valuations had plunged across the board.

At one time, Harvest Health & Recreation (HRVSF) had said it was going to acquire Verano in a deal valued at $850 million, but then the deal unraveled. Both parties agreed to terminate it and walk away. This is where the disagreement begins between Sol and MMCap. Sol claims that once the Harvest deal was over, that MMCap had no options to receive the stock as payment, and that MMCap could only get a cash payment.

MMCap says that isn’t true and even includes in its lawsuit the language from the debenture document that seems to support its claim to having an equity option. The debenture language according to MMCap says that if the Harvest deal didn’t happen, MMCap would receive 1,730,794 shares of Verano. MMCap says that the termination of the Harvest deal actually had the opposite effect to what Sol claims. Instead of getting paid in cash, the debenture language says that the termination of the deal meant MMCap would have to accept the Verano shares as payment. At that time, Sol would have been able to walk away from the $50 million debenture by only having to turn over the shares which looked to be worth far less than they are today. MMCap also says in its lawsuit that Sol wasn’t paying its interest payments on time and could only pay what it owed in tranches.

According to a court document filed in Canada, MMCap wants its repayment in the form of those Verano shares. It is insisting that it has the option to request payment in shares, which could be worth as much as $500 million. MMCap was supposedly trying to resolve the matter between the parties, but during those discussions, Sol Global filed this lawsuit in New York saying that MMCap did not have the option to choose Verano shares as a form of repayment and that it would instead pay the debenture amount in cash. Now that Sol Global has lost this initial round, it looks like the case conflict will remain in Canada.


StaffApril 29, 2021
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SOL Global Investments Corp.  (OTCPK: SOLCF) provided its investors with unaudited financials for the first quarter ended February 28, 2021, and a general operational update concerning its assets and investments. Sol Global recorded a positive net income of $208 million versus quarter-end February 29, 2020, of $2.9 million. The increase was due to the company selling Bluma Wellness to Cresco Labs Inc. in an all-stock transaction valued at $213 million. As of February 28, 2021, the company had $18 million in cash.

“I’m pumped for our stockholders and beyond proud of my team and partners for today’s results,” said SOL Global’s Chairman and CEO, Andy DeFrancesco. “Our year end results were strong, but we shattered expectations with this most recent quarter. Going forward, our sectors and holdings may change but our strategy, risk management and dedication to our stockholders will not.”

Verano Update

Sol Global has been tied up in a legal dispute over its ownership of Verano shares. The dispute is regarding the repayment of the debenture Sol Global sold to MMCap in July 2019 through what’s called the 1235 Fund. According to the court documents filed in Canada, MMCap wants its repayment in the form of those Verano shares. It is insisting that it has the option to request payment in shares, which could be worth as much as $500 million. Sol Global preemptively filed a lawsuit in New York saying that MMCap did not have the option to choose Verano shares as a form of repayment and that it would instead accept payment of the debenture amount in cash.

Sol Global’s update was that the company would be asking to stay the Ontario claim on the basis that the issues are already before the New York courts. It should be noted that MMCap filed its lawsuit on February 25, 2021 and Sol Global has yet formally file the request to stay the Ontario claim.  The lender has asked that the proceedings in New York be stayed or dismissed, arguing that these matters should be decided by a court in Ontario.

Investors should be aware that if the court awards the shares to MMCap that would certainly negatively affect Sol Global. Sol Global continues to tout the accomplishments of Verano in the hopes the shares get awarded to Sol Global and thus increase its own valuation. Sol Global also said in its filings that no amounts have been reserved in the financial statements of the company with respect to the Ontario Claim.

Other Investments

Sol Global outlined the company’s other investments as follows:

  • Its intention to increase its ownership interest in Captor Capital (the parent company of One Plant California) to 15.7%.
  • The company co-led Fyllo’s $30 million dollar Series B Financing, with a USD$4 million investment.
  • Sol Global made its first investment in the psychedelic sector, investing $2.6 million into Wesana Health.
  • The company structured and led recent financing into Green Scientific Labs, investing approximately $2.84 million for a 14.5% interest. The Company intends to increase its ownership in GSL by investing further into its RTO financing round, which is imminent.
  • Sol Global made its first green tech investment in the electric motorcycle company Damon Motorcycles. Damon recently raised $30 million after completing a bridge financing round led by SOL Global, Benevolent Capital Partners, LLC, Zirmania Investments Limited, and other investors. SOL Global invested CAD$6.1 million into Damon.

Debra BorchardtFebruary 16, 2021
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Verano Holdings Corp. (CSE: VRNO) is set to begin trading on February 17 after closing the reverse takeover of Majesta Minerals Inc. and the merger with Alternative Medical Enterprises LLC, Plants of Ruskin GPS, LLC, RVC 360, LLC, and affiliated companies better known as AltMed and sometimes referred to as AME. The company noted that the Subordinate Voting Shares would begin trading on the CSE, but that the Proportionate Voting Shares will not be listed for trading. 

“Our public listing will provide us access to capital to execute our long-term strategy of expanding into limited-license, high-growth markets and scaling our wholesale and retail operations into new and existing markets,” said CEO George Archos. Archos holds 19.62% of the issued and outstanding SV Shares of Verano. While the subscription price is $10, it is expected that the stock will trade above that level. 

Verano is in 12 U.S. States, with active operations in nine, which includes 23 active retail locations and approximately 440,000 square feet across its six cultivation facilities. Verano produces a full suite of premium, artisanal cannabis products sold under its trusted portfolio of consumer brands: Encore, Avexia, and Verano. Verano designs, builds, and operates inimitable Zen Leaf branded dispensary environments that deliver a superior cannabis shopping experience in both medical and adult-use markets. 

The merger with Alt-Med brings the company the MÜV brand of medical cannabis-infused products which were launched in Arizona in 2016. Alt Med has  29 active retail locations, the AME Parties have 220,000 square feet of cultivation facilities in Florida, and 33,542 square feet in Arizona, which is expected to increase by an additional 110,000 square feet to meet increased demand. 

“The combination with AltMed joins two complementary companies focused on providing superior customer experiences. We have both been disciplined operators since inception, and together we anticipate continuing to generate strong profitability and an EBITDA margin that would rank us near the top of our peer group,” said Mr. Archos. “Our public listing will provide us with access to capital to execute our growth plan, including the organic growth of our retail presence and product portfolio in addition to the pursuit of strategic acquisitions, with the goal of being a top three operator in the states in which we operate.”

Earnings

For the nine months ending in September 2020, Verano reported revenue of $154 million and AME reported $87 million. The net income for the same period was $118 million for Verano and $88 million for AME. On a pro forma consolidated basis, the nine months of revenue would be $241 million and the net income would be $172 million. 

Winners & Losers

In 2019, Harvest Health & Recreation (OTC: HRVSF) intended to acquire Verano for roughly $850 million. The two companies agreed to terminate the deal without incurring any breakup fees. Part of the problem with the all-stock deal was that Harvest Health’s stock plunged from C$8.79 at the time of the announcement to roughly C$1.62. The stock was lately selling at C$4.61. “This decision was not taken lightly,” said George Archos, Verano Holdings CEO. “While both organizations worked very hard to consummate this transaction, significant delays in closing started with the Hart-Scott-Rodino antitrust review process. Those were followed by state and local regulatory complexities in multiple states.” Harvest has a current market cap of $1.8 billion while Verano’s market cap is expected to be $2.8 billion. 

SOL Global Investments Corp.  (OTCPK: SOLCF) stands to benefit greatly from its investment in Verano. Once the stock begins trading, SOL Global expects to hold 25.2 million subordinate voting shares and was pleased to note that Verano has “effectively scaled up its operations in several key cannabis markets in the U.S., including Illinois, New Jersey and Nevada (either directly or via affiliates/subsidiaries), and is well positioned to continue to generate impressive quarter over quarter growth.”

Sol Global said in a statement that the transaction will have a significant positive impact on its net asset value and the company will update the market in a timely manner as information is available. Sol Global also had to set the record straight with one of its lenders regarding the Verano stake. On February 7, 2021, the company initiated litigation in the State of New York against its lender, 1235 Fund LP, an affiliate of MMCAP who wants Verano stock instead of being paid in cash. 

Back in 2019, the company announced that it had completed a $50,000,000 private placement financing by way of the issue and sale of a senior secured non-convertible debenture. If the deal between Verano and Harvest Health had occurred, the lender would have been repaid in shares of either Verano or Harvest, which would have enabled the lender to cover its short position in Harvest and provided the lender with a reasonable premium of return beyond the stipulated 6%. 

“The Harvest Transaction did not close and thus the Debenture is repayable only in cash. Nevertheless, on February 5, 2021, the lender has wrongfully sent a formal notice purportedly electing to receive, instead of cash, Verano shares currently owned by the Company whose value is more than 200% of the principal value of the Debenture. The Company advised the lender that it will repay the Debenture in cash pursuant to its terms. To address any uncertainty resulting from the lender’s positions, the Company commenced litigation against the lender and another seeking declaratory relief that, among other things, the lender has no right to be repaid in Verano shares. As a result of the lender’s positions, SOL Global has decided that it will no longer do business with it nor participate in any transaction in which the lender is involved.”


Debra BorchardtFebruary 20, 2020
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SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) portfolio company CannCure Investments has entered into a definitive business combination agreement with Goldstream Minerals Inc.  The deal was previously announced in January and the companies are planning a reverse takeover of Goldstream by CannCure.

According to the company statement, the resulting company will initially operate in the State of Florida via One Plant Florida (formerly 3 Boys Farm LLC) and in the event that its proposed acquisition of ECD Holdings Inc. (d/b/a as “Northern Emeralds”) is completed, will begin operations in the State of California. As the company previously announced, Brady Cobb will step down as CEO and a director of SOL Global to lead the new MSO effective upon the closing of the Proposed Transaction. Closing of the Proposed Transaction is expected to occur in late April 2020 or such other date as may be mutually agreed to by the parties.

Goldstream will de-list from the NEX board of the TSX Venture Exchange and the resulting issuer will apply to list its common shares on the Canadian Securities Exchange (CSE). The proposed deal cannot be completed while Goldstream is listed on the NEX board of the TSXV. Sol Global said that an application will be made to voluntarily delist its common shares from the NEX board of the TSXV and to list the common shares of the resulting company on the CSE.

Terms Of The Deal

The company said in the statement that the following terms were part of the deal:

  • the consolidation of Goldstream’s common shares on a 23.3053:1 basis, the issuance of post-Consolidation Goldstream common shares to holders of CannCure common shares on a 1:1 basis;
  • the continuance of Goldstream into the province of British Columbia;
  • the entering into of lock-up agreements by certain CannCure shareholders, officers and directors;
  • CannCure obtaining a US$15,000,000 construction loan from an arm’s length third party lender or completing an alternative financing to ensure sufficient funding for the MSO operations following closing;
  • the approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction, including, without limitation, approval from the Florida Department of Health, Office of Medical Marijuana Use; and
  • other closing conditions customary to transactions of the nature of the Proposed Transaction.

StaffJanuary 9, 2020
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SOL Global Investments Corp.’s  (CSE: SOL) (OTCPK: SOLCF) CannCure Investments Inc. will be going public through a reverse merger with  Goldstream Minerals Inc. (NEX: GSX.H). The companies entered into a letter of intent dated January 8, 2020, outlining the proposed terms and conditions.  Goldstream will buy a 100% interest in CannCure and then do a reverse takeover by the shareholders of CannCure. The deal is expected to close on or near March 31, 2020.

CannCure will be called “Bluma Wellness Inc.” with operations in Florida via One Plant Florida which is also known as 3 Boys Farm and in California with premium flower cultivator Northern Emeralds. The company said that the LOI was negotiated at arm’s length.

“Bluma will continue to execute on its plan to cultivate and deliver to patients and consumers the highest quality cannabis flower and flower derived products in the coveted Florida marketplace via One Plant Florida, and in California with premium flower producer Northern Emeralds. Bluma will also remain laser-focused on the responsible scale-up of its operations in both Florida and California with a continued focus on its proprietary home delivery model paired with strategically located flagship stores (that will also serve as delivery hubs) and efficient and data-driven premium flower cultivation”, said SOL Global CEO Brady Cobb.

Cobb, who is currently the CEO of SOL Global, will move over to become the CEO and Chairman of Bluma Wellness. SOL Global also stated that it will be the largest shareholder of Bluma. Former CannCure shareholders will become Bluma Shareholders.

“It has been an honor to lead one of the most dynamic and forward-thinking cannabis investment companies, and it’s has been my distinct privilege to work alongside our dedicated team as we assembled an amazing portfolio of cannabis, CBD and Esports investments” continued Brady Cobb. “My strengths have always been on the operations side, and I’m thrilled at the prospect of being able to focus exclusively on scaling up our operations in Florida and California and delivering value to our shareholders.”

Goldstream is listed on the NEX board of the TSX Venture Exchange, the company plans to delist the Goldstream shares from the NEX and then move to the Canadian Stock Exchange. SOL Global will stay at the CSE and the company said that it will not change its business to “that of a life sciences issuer operating as a multi-state cannabis operator in the United States.”

Valuation

In addition to the reverse takeover announcement, SOL Global also reported that Canadian firm Duff & Phelps completed a valuation of its portfolio of private and public investments and concluded that the value of the Investment Portfolio, as at November 30, 2019, was in a range between $165.2 and $182.4 million with a midpoint of $173.8 million.

The company said that it has 54,459,256 common shares issued and outstanding and the valuation implied an NAV per share of approximately $1.70. The stock was lately trading at 40 cents per share with a market cap of $19 million as per Yahoo! Finance.


Debra BorchardtDecember 2, 2019
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SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) delivered its second-quarter results in Canadian dollars with a net loss of $51.3 million loss and no revenues only a loss of $57 million versus last year’s loss of $17 million for the same time period. The second quarter of 2018 also experienced a net income of $179 million due to the gain on the sale of a subsidiary.

In the last six months, SOL Global has recorded a net loss of $94 million or $1.75 per share. The company noted that 78% of this loss is due to SOL Global’s investment in Verano Holdings Inc. “Early in 2019, Verano announced a merger agreement with the public company Harvest Health & Recreation Inc. As a result of this merger agreement, the price of the company’s investment in Verano is linked to the value of the underlying Harvest shares that the company will receive should the publicly announced merger close. As the value of the Harvest shares decreased significantly from April 1, 2019 to September 30, 2019, the company recorded an unrealized loss of $74.2 million on its Verano investment. The remaining loss is primarily attributed to changes in the Company’s other cannabis-related investments.”

“We are disappointed in the volatility of certain core portfolio holdings which had a significant negative impact on our NAV, however, we continue to stand by those investments and their long-term value creation,” said CEO Brady Cobb. “Our stock has had a larger decline than others but traditionally an investment holding company trades at a discount to operating companies. That, coupled with 1 or 2 of our core holdings having larger price declines than expected due to HSR delays has had the majority of impact on our NAV decline.”

Confusing Acquisition Plans

In addition to the big losses, SOL Global has shifted gears with its acquisitions causing investors to lose track of what exactly the company is planning to do. SOL Global stated that it still intends to complete a transaction for the sale of 3 Boys Farms, LLC within 2 years of the closing date of its acquisition. “In the event that a sale of 3 Boys Farms, LLC does not occur within the two-year timeframe, only then would the Company be required to compensate the former CannCure shareholders US$80 million.” SOL was going to sell 3 Boys to Verano, but when Verano said it was buying Harvest Health, it didn’t need a Florida property and so that agreement was terminated.

The company also recently terminated the plan to acquire MCP Wellness, which would have given the company a large presence in Michigan, which just began recreational sales on Dec. 2.

Video Gaming?

Adding to the confusion is the company’s investment in a video game business. Two of SOL Global’s non-cannabis investments, Torque Esports Corp. (TSX-V: GAME) of which the company presently owns 9% of its shares, and Frankly Inc.  (TSX-V: TLK) of which the company presently owns 13.8% of its shares, have agreed to merge with a third company, WinView, Inc. in a triple-merger. The combined entity will be called Engine Media Holdings, Inc. with the plan to form integrated news, gaming, and esports platform. WinView Executive Chairman Tom Rogers, best known for founding CNBC and then CEO of TIVO, will serve as Executive Chairman of the new entity.

If shareholders were wondering whether this should be looked upon as a way to diversify risk, SOL Global shot that down by adding, “There are no assurances that the proposed transaction will be completed or at all.”

More confusing is that SOL Global also filed an early warning report in connection with a disposition of common shares of Frankly Inc. and also stated that it sold 103,500 common shares of Torque Esports resulting in SOL Global becoming a beneficial holder of less than 10% of the shares receiving approximately $ 130,864.

Cobb added, “This deal, which was brought together by our investment team, illustrates our strength in recognizing value in individual assets but also the foresight to cohesively align and bring investments together in order to maximize shareholder value by looking outside of the box. The esports industry marketing size is set to surpass the $1billion dollar revenue mark in 2019 according to NewZoo at a time when streaming is taking over cable providers. I’m personally excited to see this investment play out and am proud of our investment team for finding the opportunity in both Torque and Frankly and bringing them to another level. ”

Heavenly Rx To NASDAQ

SOL Global owns 40.7% of Heavenly Rx Ltd. which has signed a memorandum of understanding with the NASDAQ exchange. Heavenly is supposed to a reverse takeover of Therapix Biosciences Ltd (NASDAQ: TRPX), a specialty clinical-stage pharmaceutical company with a portfolio of technologies and assets based on cannabinoid pharmaceuticals. However, SOL also made sure to note that there also no assurances this deal would come to completion.

In October the company said it was changing its name to Bluma Wellness, but so far the board hasn’t voted to approve the name change.

Shareholders are apparently comfortable with the losses as the stock moved higher by 3% to trade at roughly 34 cents.


Debra BorchardtNovember 27, 2019
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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.

“We recognize that responsibly allocating our shareholders’ capital is fundamental to long-term success. While it sometimes means making tough decisions, we are committed to executing on a superior capital agenda, responsibly accelerating the top and bottom-line, executing thoughtful and accretive M&A transactions, and generating efficiencies as we scale,” said Cresco Labs CEO and Co-founder Charlie Bachtell. “With the flexibility to continue to leverage non-dilutive funding options like sale-lease-back agreements, we are well-positioned to continue executing on our strategy to build the most important, enduring company in U.S. cannabis.”

In March, VidaCann was said to have plans to have 20 operating dispensaries by the end of 2019 and licenses for up to 30 in the state. It was to be Cresco’s entry into the lucrative market and another state to plant the Cresco Flag.

Separately, the company also announced the signing of a binding agreement for the sale-and-leaseback of two properties in Ohio and Michigan, for total additional funding of approximately $38 million.

Mr. Bachtell continued, “With these two announcements, we have effectively strengthened our balance sheet to the tune of nearly $158 million between new non-dilutive funding and the elimination of a significant near-term cash outlay earmarked for the Transaction. The team and operations at VidaCann are phenomenal, but with a focus on managing our cost of capital, and ensuring the most efficient and highest return on invested capital, the ability to deploy resources to other, existing, Cresco markets that are widely considered some of the top markets in the US, like Illinois, Pennsylvania, California and Nevada, has to take priority.  We believe it’s in the best interest of our shareholders to re-allocate resources to these existing higher return opportunities with a view to looking for a more capital efficient way to enter the Florida market over the longer term.”

Cresco Labs stock was up slightly by four cents to lately trade at $5.79, down from its 52-week high of $40.63.

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.

According to the statement, both MCP and SOL Global said that “current market conditions do not support a transaction of this size, and both parties and their respective shareholders are better served focusing capital and resources on building out their respective businesses.” SOL Global said it will remain focused on the scale-up of its rapidly expanding Florida operations via One Plant Florida, and MCP said it will focus on opening additional dispensaries and launching a cultivation facility in Michigan.

While the acquisition is off, MCP Wellness may use Northern Emeralds (which SOL Global has proposed to buy)  to provide cultivation and processing standard operating procedures to MCP for a to be agreed upon royalty. The statement said that the $12.5 million advanced by SOL Global to MCP Wellness will be repaid in full over the next 12 months in monthly installments and 2 balloon payments at the 6 and 12 month time frames. In addition to that, CannCure, which is SOL Global’s portfolio company,  will have the option to acquire certain assets from MCP Wellness, convert any amounts due into stock in the Michigan operator, or complete the originally contemplated transaction on substantially similar terms.


Debra BorchardtAugust 30, 2019
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 SOL Global Investments Corp. (CSE: SOL) (OTCPK: SOLCF) reported a loss of $43.5 million for the first fiscal quarter versus a loss of $2.9 million for the same period in 2018.  The loss came to 81 cents per share for the quarter. The company attributed the loss to a devaluation of cannabis stocks totaling $33.5 million and expenses, with total expenses coming to $10.9 million for the quarter.

The main culprit was Sol Global’s investment in Verano Holdings, which is set to be acquired by Harvest Health & Recreation. As such, the Verano share price is linked to Harvest’s share price which has decreased significantly. In just that quarter the company experienced an unrealized loss of $55.9 million.

“It was a tough quarter for the Cannabis sector and that’s the primary reason for our unrealized loss.  The positive is that’s exactly what it was, unrealized. Brady continues to execute with tremendous success on CannCure and its transformation to Bluma Wellness while strategically building out his operational team and The Bluma Board. Paul Norman has built the foundation of an executive team and board that is simply unprecedented in this newly pioneered sector and their execution is what you would expect from a team of this caliber.” said SOL Global’s Chief Investment Officer Andrew DeFrancesco. “The investment team and I continue to provide the financing for growth while continuing to provide guidance toward strategy and execution for those core holdings. ”

The downturn hasn’t slowed the company. Last month, SOL Global bought 42% of Heavenly Rx Ltd. at a price of approximately $0.40 per share. The company also signed an agreement to acquire ECD, Inc., which operates as Humboldt County’s Northern Emeralds for $120 million payable in common shares. Northern Emeralds is expected to operate under Bluma Wellness.

SOL Global also plans to buy the Michigan-based MCP Wellness Inc. for a total of $35 million in cash and $115 million in common shock. MCP Wellness is presently operating three dispensaries in the Detroit area, is opening a fourth dispensary in Ann Arbor, and is finalizing plans to construct a cultivation facility.

In addition to that acquisition, SOL Global has signed a binding LOI to acquire six licensed cannabis dispensary companies and all One Plant intellectual property in California for $17 million, payable by $5 million in cash and $12 million in common shares, from Three Habitat Consulting Holdco Inc. that will subsequently operate under the nationally recognized “One Plant” brand. One Plant is expected to be the brand name of all of Bluma Wellnesses anticipated 49 retail stores spread throughout Florida, Michigan and California.


William SumnerAugust 8, 2019
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It’s time for your Daily Hit of cannabis financial news for August 7, 2019.

On the Site

Cronos Group

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) reported financial results in Canadian dollars for the second quarter and first-half ending June 30, 2019, with net revenue climbing 202% to $10.2 million over last year’s $3.4 million. The revenue increased 58% sequentially from $6.5 million in the first quarter of 2019. The company attributed the increase to sales in CBD oil, which carries no excise tax reduction and increased sales of dry flower.

GrowGeneration

Today, GrowGeneration Corp. (OTCQX: GRWG) announced the release of the financial results for the fiscal quarter ending on June 30, 2019. Net revenue for the quarter was $19.48 million, up from $7.15 million in the same period of the previous year. The company attributes the increase in revenue to the addition of 14 new retail stores

SOL Global

SOL Global Investments (CSE: SOL)(OTCPK: SOLCF) is changing from an international cannabis investment company to a U.S. multi-state cannabis operator (MSO) under the Life Sciences category of the Canadian Securities Exchange. In addition to the business designation change, the company is also changing its name to Bluma Wellness.

In Other News

Diego Pellicer

Diego Pellicer Worldwide, Inc. (OTCQB: DPWW) announced that its Denver licensee reported record sales for the month of July and that its sales average has risen by 8.56%. “Diego Pellicer – Colorado has clearly proven that premium products plus outstanding customer service and a world-class shopping experience is a winning formula for success,” said Diego Pellicer CEO Ron Throgmartin.

Planet 13

Planet 13 Holdings Inc. (CSE: PLTH) (OTCQX: PLNHF) announced that in July it served on average 1,937 customers per day with an average sale of $90.41 from the Planet 13 Las Vegas Cannabis Entertainment Complex. In May, the company accounted for roughly 10% of all cannabis sales in the state of Nevada, with a customer conversion rate of 60%. “We continue to drive impressive results from the SuperStore’s original 16,000 sq. ft. dispensary footprint in advance of the Phase II,” said Larry Scheffler, Co-CEO of Planet 13. “In May we reached an impressive milestone, the SuperStore accounted for 10% of all dispensary sales in Nevada. I’m optimistic we will see this trend continue once the department of taxation releases June and July numbers.”

C21 Investments

C21 Investments Inc. (CSE: CXXI) (OTC: CXXIF) released its unaudited financial results for the quarter ending on July 31, 2019. Unaudited revenue grew from $7.7 million to $9.8 million, representing a quarter-over-quarter increase of 27%. The unaudited gross margin rose from 43% to 49%. The company will release its certified financial results on or around September 12, 2019.

Cresco Labs

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) announced that it has received approval to acquire 100% 100% of the membership interests of Gloucester Street Capital, LLC, the parent company of Valley Agriceuticals (Valley AG). Valley AG is one of ten vertically integrated medical cannabis license holders in the state of New York. The license will give Cresco the right to operate one cultivation facility and four dispensaries in the state. The acquisition is expected to close by the end of the August.


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