
Management iterated a goal of reaching EBITDA breakeven this year.
Management iterated a goal of reaching EBITDA breakeven this year.
The Daily Hit is a recap of cannabis business news for Nov. 30, 2022.
International Cannabis Reform Ramps Up in Europe, South America
Global cannabis reform is gaining momentum. What started as a ripple in three countries has become a global policy movement. While many countries, primarily in Africa and Asia, continue to ban cannabis, a hotbed of reform activity is transpiring everywhere else. Read more here.
Cannabis Company Finds Novel Solution to Real Estate Woes
After struggling to find a downtown office landlord willing or able to house its headquarters, one of Chicago’s publicly traded marijuana companies has found a different solution: moving to a massive apartment complex. Verano Holdings (OTC: VRNOF) (CSE: VRNO) signed a 12-year lease for roughly 25,000 square feet in the office portion of Three Old Town Park. Read more here.
Eleventh-Hour Lobbying Push for SAFE Banking Under Way
The clock is ticking on the current Congressional session, with the 535-member body set to adjourn for the two-year cycle on Jan. 3. With that, the fate of the SAFE Banking Act is still very much up in the air, with no solid intel about exactly what will happen to the measure. Read more here.
SpringBig to Cut Nearly One-Quarter of Staff
SpringBig Holdings Inc. (Nasdaq: SBIG) will cut 23% of its staff in an effort to “right-size its expense structure,” the company announced Wednesday. The staff cuts, which total 37 positions, will be undertaken through layoffs and attrition. Read more here.
Latest cannabis earnings:
Icanic Brands Co.
Icanic Brands Co. (CSE: ICAN) (OTCQB: ICNAF), a multistate operator of premium cannabis brands in California, reported sales of $7 million for the quarter ended Sept. 30, a year-over-year increase of 180%. The company reported a net income for the period of $10.6 million. Read more here.
TerrAscend Corp.
TerrAscend Corp. (CSE: TER) (OTCQX: TRSSF), a North American cannabis operator, announced that its subsidiary, WDB Holding MI Inc. (DE), and all subsidiaries of TerrAscend refinanced an existing senior secured term loan of $55 million. The amendment provides for a senior secured term loan with a principal amount of $25 million, plus incremental term loans of $30 million at the option of TerrAscend. Read more here.
Franchise Global Health
Franchise Global Health Inc. (TSXV: FGH) (FRA: WV4A) reported revenue of $11.9 million for the third quarter of 2022, a year-over-year increase of $11.7 million. The company noted that during the quarter, it entered into an agreement to acquire Flora Growth Corp. (Nasdaq: FLGC).
The cuts will come through layoffs and attrition.
Since 2017, springbig has transformed from a simple CRM into a comprehensive marketing platform for cannabis retailers.
The Green Market Report honors the most innovative technology providers in the cannabis industry at its inaugural Tech Awards ceremony.
Historically, Labor Day weekend has seen some of the highest cannabis sales of the year.
Canna-tech companies were busy over the long 4th of July weekend, analyzing sales data from their various platforms for what was expected to be one of the biggest weeks of the year for cannabis retailers. In Canada, the national holiday Canada Day is celebrated on July 1, with vendors hoping for a holiday spike in sales.
Last week canna-tech company Surfside predicted that the Thursday before the 4th of July, 2022, might be the busiest day of the summer in the U.S. Their analysis also indicated that Fridays in the summer have a magic of their own and consistently saw increased sales compared to other days of the week and Fridays during other times of the year.
According to data analyzed by canna-tech companies Akerna Corp. and Flowhub, the Friday before the 4th of July turned out to be the big day for retail sales in the U.S.
Akerna (NASDAQ: KERN) said that according to their data, Friday, July 1, became the second highest-grossing sales day for 2022, with USD $106.7 million in sales. Data from Akerna’s MJ Analytics platform indicated that compared to $89.6 million in sales on the same day in 2021, this year showed a 19.1 percent sales increase. Monday, July 4th, had lower sales, which was attributed to stores being closed for the holiday.
Data from Flowhub’s platforms said sales on Friday, July 1, were up 15 percent compared to a regular Friday. The Saturday and Sunday before 4th of July saw a five percent increase each day, while the 4th of July saw a scant two percent increase. Flowhub added that 33 percent of sales on their platforms for the holiday weekend included a discount.
Delivery and distribution company Lantern said sales were strong before and throughout the weekend, with customers purchasing “flower, then edibles, and then vapes, (with) more customers than usual who bought drinks and pre-rolls.”
SpringBig, a company that develops customer loyalty program technology for cannabis vendors, said their platform saw a slight increase in overall sales, with $16.9 million this year, compared to $16.8 million for the same weekend last year. “The sales and loyalty redemptions numbers are almost identical between last year and this year,” they said.
Data company Headset saw declines in sales this year, specifically on Canada Day and July 4th.
In Canada, on July 1, Headset noted an average decline in sales of 23 percent across all provinces, with Ontario experiencing the biggest drop at 29 percent. Across product categories on Canada Day, there was a decline in sales for typically popular items including “vapor pens (-27%), flower (-25%), oil (-22%), and concentrates (-19%).” The company did not have comment on what may have triggered sales to trend lower or if sales prior to Canada Day were elevated.
In the U.S., July 4th saw a 6.6 percent drop in sales, compared to the four previous Mondays. Across product categories, Headset data indicated, “Not all products fared the same with Pre-Rolls actually seeing an increase in sales of +6% on July 4th while Topicals and Capsules (traditionally consumed in a more health and wellness setting) saw declines of -17% and -28% respectively.”
With medical and adult-use cannabis vendors now looking forward to July 10 – aka 7/10 or cannabis concentrate event Dab Day – it remains to be seen if the little-known cannabis holiday will grow in popularity. With looming global recession, worsening inflation and market mayhem in effect, consumers may be looking for bargains or more conservative with spending, though July typically sees higher overall sales than other months of the year.
In comparison, Headset shared insights for Dab Day 2021 with Green Market Report after last year’s holiday. Their data indicated that U.S. sales increased slightly, while 7/10 sales in Canada remained flat:
Natalie Shaul
Co-Founder & VP of Marketing, Springbig
In 2013 Natalie moved to South Florida and started working at springbig. At the time springbig was offering loyalty and text message marketing to small businesses. In the Fall of 2016, Nat made the push for springbig to pivot to cannabis. She identified the potential for the company to enter the cannabis space and took on the initiative to get them in the space in 2017.
Since then, Nat has been the co-founder/head of Marketing for springbig. As springbig’s co-founder, Natalie Shaul has influenced the cannabis sector by being a trendsetter, job creator and changemaker. Under her leadership, springbig has become the leading provider in customer loyalty and text message communications –transforming how thousands of cannabis brands and retailers do business. To date, Shaul has brought the platform to 50 million consumers and over 2,300 retailers. She also played a crucial role in raising nearly $20M total.
In addition to helping thousands of cannabis retailers, Shaul’s company has created more than 80 jobs across South Florida and provided discounted services to support veteran and minority-owned cannabis businesses. She has been able to achieve all of this while occupying a unique position within the cannabis sector. As reported by MarketWatch, the percentage of women in senior positions at cannabis-focused companies has dropped by nearly 15% over the last two years. Shaul strives to challenge this industry trend by creating opportunities and mentoring young women across springbig.
Cannabis marketing firm Springbig is dramatically reducing its valuation in its IPO deal with SPAC company Tuatara Capital Acquisition Corp. (NASDAQ: TCAC)to $275 million from the previously announced valuation of $500 million. In November, Tuatara Capital Acquisition Corp. said it reached a deal with Springbig to merge with an estimated equity value of $500 million of the combined company with a $300 million springbig enterprise valuation plus $200 million cash on the balance sheet from the SPAC. On Tuesday, the sides agreed “that market conditions have changed since the proposed merger agreement was initially announced,” according to a statement. Although it is worth noting that Springbig’s annual revenue is just $24 million, making even the lowered valuation pretty frothy.
Paul Sykes, Chief Financial Officer of Springbig, said: “These latest developments represent further significant steps towards completing our business combination with TCAC. The amendments to the terms of the merger have enhanced the value of this transaction to our public shareholders. By reducing valuation and combining this with the innovative structure of offering up to one million bonus shares to be issued pro-rata to non-redeeming public shareholders, we believe we have created an attractive proposition that adequately reflects current market dynamics. Additionally, the commitments we have received from the global institutional investor with respect to the senior secured convertible note, the CEF Facility with Cantor, and the previously announced $13 million common equity PIPE will ensure that springbig starts life as a public company with access to adequate capital to continue to scale our existing business and pursue our expansion strategies as opportunities emerge.”
The companies released a statement outlining additional financing changes. Springbig and TCAC said they have an agreement for the issuance of senior secured convertible notes with a 24-month maturity, up to $16 million principal amount that has been subscribed to by a global institutional investor. “An initial tranche of $11 million will close in connection with the closing of the merger agreement. The second tranche of $5 million, subject to certain conditions in the agreement, will close 60 days after the resale registration statement is declared effective by the SEC.”
Additionally, TCAC has also agreed to a $50 million equity financing facility with Cantor Fitzgerald LP. Jeffrey Harris, CEO of springbig, added: “We are delighted to have the support of Cantor and an institutional investor. The growth opportunity ahead of springbig is significant as we look to strengthen our core loyalty and marketing communication capabilities, execute our expansion strategies, and deploy the additional capital we receive from our transition into a public company.”
In March, Springbig reported that it had strong year-over-year revenue growth of 58% to $24 million in 2021 from $15 million in 2020. Gross margin improved by 4% YoY to 71% in 2021 from 67% in 2020 and the retail client base increased by 63% from 759 in 2020 to 1,240 in 2021.
Nat Shaul, VP of Marketing and Co-Founder of springbig, a leading provider in cannabis loyalty marketing and communications technology. Nat has been an integral part of the springbig team since its founding over 8 years ago.
Her wealth of knowledge and insight into the tech space, cannabis industry, and effective marketing, has played a crucial role in turning springbig into the leading provider of cannabis CRM and marketing technology. The company currently has over 1,000 clients across 2,300 locations throughout North America, reaching over 65% of the estimated 38.4M cannabis users in the U.S. through its AI-powered SaaS platform.
What is your proudest accomplishment in the cannabis industry?
My proudest accomplishment is having over 15% of the US population using springbig.
Do you feel that the cannabis industry has more opportunities for female-identifying people than other industries?
I think so. I think the cannabis industry as a whole is more open-minded and are proponents for equality than other industries.
Do you feel you have to work twice as hard as male colleagues or do you think the industry has moved past that?
I think that generally, the cannabis industry is more progressive than most. With that being said, to get to the point where I am today I often had to hide the fact that I was a female so that my cold emails/calls would be answered quicker or taken more seriously.
What was your biggest challenge in business and how did you overcome it?
When springbig started out, we were the small guys. We had less money, less tech, and less staff than industry competitors. However, we had the most passion, drive, and determination for what we were doing. I think as we spoke to more people and showed them who springbig was at heart, they could really see that.
Getting in front of the right people was the biggest challenge. Going to conferences and meeting people face to face helped, but the biggest factor was actually changing my email name from ‘Natalie’ to ‘Nat’, a name that was unisex – which increased my open rates dramatically.
What have you or your company done to help give more opportunities for women?
I am proud to say that nearly 50% of our company is female, which is higher than the average of 30% for most tech/software companies.
What are your personal goals for 2022?
My goals for 2022 are to spend more time with family and friends. I’d also love to try to travel more.
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