The Parent Company Archives - Green Market Report

StaffMay 15, 2023
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6min00

The Daily Hit is a recap of the top financial news stories for May 15, 2023.

On the Site

Green Thumb Industries Facing 10 Federal Complaints from Teamsters

Although the nearly two-week strike at several Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) facilities by unionized workers has concluded, the Illinois-based multistate operator is still negotiating with the International Brotherhood of Teamsters over employment terms for many of its workers. Read more here.

Cannabis Companies Skymint, 3Fifteen Battle in Receivership

Lawyers entangled in the court-ordered receivership of Lansing marijuana giant Skymint continue to battle over the company’s finances. The alleged trouble stems from Skymint‘s $78 million acquisition of Birmingham-based competitor 3Fifteen Cannabis in April 2022. Read more here.

Related: SNDL Sales Dip in First Quarter

Columbia Care Sees Revenue Uptick Despite Retail Closures

Columbia Care Inc. (CSE: CCHW) (OTCQX: CCHWF) reported its top-line revenue for the first quarter grew 1% from the same quarter in 2022 to $124.5 million. The growth beat expectations by $1.3 million and was largely driven by strong performance in the East Coast markets, particularly New Jersey, Virginia, and West Virginia. Read more here.

Tilt Pledges ‘Frugality as a Core Value’ After $5M Loss

Tilt Holdings (NEO: TILT) (OTCQX: TLLTF) lost $4.9 million for its first quarter in 2023, a vast improvement from the final three months of 2022, when it lost a whopping $73 million. But that’s only one step in the right direction, intimated the newly minted interim CEO Tim Conder. Read more here.

TPCO Sales Down But So Are Losses

TPCO Holding Corp. (NEO: GRAM) (OTCQX: GRAMF), which does business as The Parent Company, posted a $16.5 million loss for the first quarter of 2023, a solid improvement from the $735 million it managed to burn through in the 24 months before that. Read more here.

More Earnings:

Auxly Cut Expenses, Achieves Positive Adjusted EBITDA in Q1
Enveric to Cut Costs, Cannabis Operations
Fire & Flower Revenues Rise Slightly in First Quarter
4Front Ventures Provides Rosy Outlook as it Expands Illinois Operations
Goodness Growth Ekes Past Expectations
Restructuring, Strategy Rework Fuel IM Cannabis’ Q1 Profit Boost
Safe Harbor Offsets $1.4M Loss with $1B Deposit Capacity Increase

In Other News

Pelorus Capital Group

Pelorus Capital Group, a provider of commercial real estate loans for the regulated cannabis sector, announced that $50 million in aggregate principal amount of 7% senior secured notes due Sept. 26, 2026, issued by its private mortgage real estate investment trust subsidiary, the Pelorus Fund REIT LLC, have been assigned an A rating by Egan-Jones Rating Company – the highest rating issued to date in the cannabis industry. Read more here.

CEA Industries

CEA Industries Inc. (Nasdaq: CEAD, CEADW) more than doubled its revenue in the first quarter of 2023 to $4.7 million compared to $1.7 million for the same period in 2022. The increase was primarily attributed to improvements in the company’s supply chain and deployment of project work as it worked through delayed projects from prior periods. Read more here.


StaffFebruary 22, 2023
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4min00

The Daily Hit is a recap of the top financial news stories for February 22, 2023.

On the Site

TPCO Merges with Gold Flora in All-Stock Deal

TPCO Holding Corp. (OTCQX: GRAMF), also known as The Parent Company, is merging with California-based cannabis company Gold Flora Corp. Gold Flora will be the majority holder of the company with 51% of the shares, while The Parent Company shareholders will own approximately 49%. The combined company will be called the New Parent, but it will operate as Gold Flora Corp. Read more here.

Two Weeks Until Oklahoma Recreational Cannabis Vote

In just under two weeks, Oklahoma voters will get to decide if they want an even more accessible, consumer-friendly cannabis industry when they weigh in on State Question 820, which would legalize recreational marijuana, in addition to the state’s immense medical marijuana trade. Read more here.

Delivra Health Turns a Profit in Latest Quarter

Canada-based Delivra Health Brands (TSXV: DHB) (OTCQB: DHBUF) managed to turn a small profit in the first two fiscal quarters of 2023, including making C$890,000 in the second quarter, which ended on Dec. 31. Read more here.

New Hampshire House Approves Recreational Cannabis Legalization

The lower chamber of the New Hampshire Legislature moved to join the rest of New England by passing a bill to legalize adult-use cannabis, but the state Senate still looms as an obstacle. The measure, House Bill 639, was given the thumbs-up by the full House on a 234-127 vote. Read more here.

Cannabis Attorney Says New York’s Legal Market Isn’t Actually Off to a Slow Start

From her first cases as a cannabis attorney, Scheril Murray Powell knew she wanted to focus on equity and representation in the budding legal marijuana industry. As one of the attorneys helping Black farmers enter the medical marijuana sector, she sought to raise their standing in cultivating the plant. Since then, she’s helped seven states legalize cannabis. Read more here.

In Other News

BioHarvest Sciences

BioHarvest Sciences Inc. (CSE: BHSC) (OTCQB: CNVCF) announced a private placement of up to C$8 million of two-year convertible notes. The funds raised will predominantly support the company’s growth in its polyphenols/antioxidants vertical. The funds will also support the R&D program for potentially providing API’s to the pharmaceutical industry on the basis of its botanical compositions. Read more here.

Tilray Brands

Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) entered into an agreement for the issuance of 120,000 shares of Series A Preferred Stock. The goal of the issuance, according to CEO Irwin Simon, is to facilitate “accretive acquisitions” going forward. Read more here.


StaffNovember 2, 2022
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6min00

The Daily Hit is a recap of cannabis business news for Nov. 2, 2022.

ON THE SITE

Green Thumb Beats on Record Revenue, Circle K Stores Remain in Question

Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) posted positive results that beat analysts’ expectations, with record revenue showing the demand for cannabis even as profits shrink industrywide. Green Thumb reported third-quarter revenue of $261.2 million, up 2.7% sequentially and up 11.8% from the prior-year period. This beat the Yahoo Finance average analyst estimate of $257.3 million. Read more here.

The Parent Company Sells Off Extraction Division

In yet another sign that the licensed California cannabis market is struggling, San Jose-based TPCO Holding Corp. (NEO: GRAM) (OTCQX: GRAMF) announced Wednesday that it had sold off its entire extraction division, a subsidiary called SISU Extraction LLC, for an undisclosed sum. Read more here.

Tilray Inks Distribution Deal with Charlotte’s Web Ahead of Health Canada Review

Tilray Brands Inc. (Nasdaq: TLRY) (TSX: TLRY) has inked a partnership with U.S.-based CBD giant Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) to sell hemp extract products in Canada. Under the agreement, Charlotte’s Web’s full-spectrum CBD products will be reach dispensary shelves through Tilray’s distribution network. Previously Charlotte’s Web products were only available in Canada to those that qualified for a special access medical exemption through Health Canada for specific need-states. Read more here.

Scotts Sales Drop 33% in Fourth Quarter, More Than Forecast

The Scotts Miracle-Gro Company (NYSE: SMG) announced in its financial results for the fourth quarter that ended Sept. 30, 2022, that sales fell by 33% to $493.6 million reflecting decreases in both major business segments. This missed the Yahoo Finance analyst estimates for sales of $519 million. Read more here.

Treez Acquires Payment Company Swifter

Cannabis cloud commerce platform company Treez is buying the payment solutions company Swifter. The value of the transaction was not disclosed. However, it does follow Treez Series C funding round of $51 million in April 2022. At the time the company said it would use the new funds to expand its footprint, pursue market expansion opportunities, and invest in partnerships that would connect each link in the supply chain. Read more here.

India Globalization Revenue Rises as it Shaves Losses

India Globalization Capital Inc. (NYSE American: IGC) posted rising revenues and cut losses as it reported its second fiscal quarter 2023 financial results. Revenue was roughly $202,000 for the second quarter, versus $56,000 during the same time last year. The company said that the rise in revenue is due mostly to growing sales of its CBD-based products and services, which increased 345% over last year. Read more here.

IN OTHER NEWS

Heritage Cannabis

Heritage Cannabis Holdings Corp. (CSE: CANN) (OTCQX: HERTF) has entered into an equity line of credit agreement with Obsidian Global Partners LLC whereby Obsidian proposes to purchase common shares in the capital of Heritage for the aggregate gross proceeds of up to $20 million by private placement, at Heritage’s discretion. Read more here.

Cansortium Inc.

Cansortium Inc. (CSE: TIUM.U) (OTCQX: CNTMF), a vertically integrated cannabis company operating under the Fluent brand, has agreed with certain of its directors to issue an aggregate of 1,048,386 common shares to such directors in exchange for the cancelling $162,500 of owed director fees. Read more here.


Debra BorchardtApril 1, 2022
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5min01

After the market closed on Thursday, TPCO Holding Corp.  (NEO: GRAM.U) (OTCQX: GRAMF) delivered its financial results for the fourth quarter and the full year ending December 31, 2021 as the company continues to record huge losses. In the fourth quarter, The Parent Company’s net sales were $39.6 million with a net loss of $50.6 million. The sales were essentially flat from the third quarter where sales were $39.7 million. The adjusted EBITDA loss for the quarter was $27.5 million.

Full Year Results

While net sales for the fiscal year 2021 were a healthy $173.4 million, the net loss was an eye-popping $587 million. DTC revenue for the year was $54.2 million or 31% of sales. Wholesale revenue for the fiscal year 2021 was $119.2 million of 69% of sales. Gross profit for 2021 was $20.2 million or 12% of net sales. The adjusted EBITDA loss for 2021 was $62 million. Since 2020, the company has logged losses of $818 million.

“2021 was a foundational year, as we developed an integrated omnichannel retail platform that provides us with direct access to over 80% of California’s adult population, positioning us to execute on our goal of becoming the number one choice for consumers by providing for both ease of access and high-quality innovative cannabis products,” said CEO Troy Datcher. “We have added significant talent to our organization, including industry experts and seasoned professionals that provide us with the depth of knowledge and expertise we need to lead in this market. While the challenges in the California market remain, including low bulk wholesale flower and oil pricing, high taxes, and persisting illicit market, we have successfully begun to pivot our focus to our higher margin direct to consumer revenue, doubling DTC revenue as a percentage of sales between the first and fourth quarters. Today more than ever, we believe we are well-positioned to win by leveraging our high-quality indoor-grown cannabis, strong consumer brands, and direct retail insights to innovate, create, and launch new products directly into the market that today’s consumers demand.”

Mr. Datcher added, “With our consumer-first approach, state-wide DTC retail footprint, robust branded products portfolio, and focus on higher-value revenue streams, our priority for the remainder of the year will be preserving our strong balance sheet by reducing our cash burn while utilizing our DTC focus to drive improved margin to generate long-term value for our shareholders. Given our progress in 2021 and subject to any opportunistic partnership or acquisition transactions, we have set a goal to maintain a minimum cash balance of approximately $100 million at 2022 year-end, sufficient to sustain our business for a minimum of three years, and pivot to generating positive cash flow in the fiscal year 2023.”

Direct to Consumer includes in-store retail, pick up, and delivery. The company currently operates eleven omnichannel retail locations, three in Northern California, three in Central California, and five in Southern California along with six delivery hubs (including the Coastal Holding Company, LLC acquisition.) On the wholesale side, TPCO sells first-party and selected third-party products into 450 dispensaries across California. Additional wholesale revenue comes from sales of sourced bulk flower and oil produced in-house.

Unrestricted cash and cash equivalents totaled $165.3 million as of December 31, 2021. Since closing the company’s qualifying transaction, the company has invested $48.8 million in acquisitions and capital investments, $6.5 million to repurchase its own shares, and $81.9 million or an average of $6.8 million of cash per month on operations as it integrates and scales its businesses.


Debra BorchardtNovember 15, 2021
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5min02

TPCO Holding Corp. also known as The Parent Company (NEO: GRAM.U) (OTCQX: GRAMF) announced its financial numbers for the third quarter ending September 30, 2021, with an eye-popping charge of $570 million. The Parent Company’s revenue for the quarter was $39.7 million and the adjusted EBITDA loss for Q3 2021 was $16.2 million.

TPCO reported that its sales in the third quarter dropped by 26.7 % from the second-quarter revenue of approximately $54.2 million and blamed the decline on a decrease in bulk wholesale flower and bulk wholesale oil prices during the third quarter.  Wholesale revenue fell to $26.9 million versus $42.3 million in the second quarter and this was attributed to the decrease in whole flower pricing during the quarter. The direct-to-consumer revenue grew 7.6% sequentially to $12.8 million.

“Over the last several quarters we have executed on our strategic initiative to drive growth in the higher quality, direct-to-consumer revenue we generate by expanding our coverage in the California market through our omnichannel platform,” said Troy Datcher, Chief Executive Officer of The Parent Company. “While our performance was impacted by the continued bulk wholesale flower and oil pricing declines that were seen across the California market, we expect that as we continue to expand the direct-to-consumer line of our business we will reduce our exposure to these pricing fluctuations. Additionally, we remain well-positioned with our access to high-quality indoor-grown cannabis, which continues to command a higher price point in the market.”

Operating expenses in the quarter were $31.6 million, cash expenses included general and administrative costs of $9.9 million, salaries and benefits of $9 million, and sales and marketing expenses of $4.6 million. Non-cash expenses included stock-based compensation of $3.6 million and depreciation & amortization of $3.3 million.

Impairment Charge Details

TPCO said that the charge was based on the softening of the California cannabis market. As part of the impairment assessment, TPCO’s future forecasts considered changes in cash flow estimates due to lower flower and oil prices realized during the third quarter of 2021. While the Company remains optimistic that cannabis legalization will occur, our expected future cash flows reflect the current tax and regulatory environment. While the company insisted that the challenges it faced were not unique to the company and that the entire California market was experiencing these issues, few other companies have registered a charge of this magnitude.

“Furthermore, the Company would like to highlight that of the consideration paid for the Qualifying Transactions, $232,719,246 related to non-cash contingent consideration. This amount is potential additional consideration issuable, if and when, the stock price reaches certain thresholds. During the nine months ended September 30, 2021, the Company recorded a gain on contingent consideration of $220,997,087 which is reflected in the statement of operations.”

The charge won’t affect the company’s cash position which is a healthy $206.7 million as of September 30, 2021. 


StaffOctober 4, 2021
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4min00

TPCO Holding Corp. also known as The Parent Company (NEO: GRAM.U) (OTCQX: GRAMF) is buying California-based Coastal Holding Company in a deal with a valuation of $56 million that is expected to close in 2022. The acquisition will bring The Parent Company’s current California retail store and delivery depot footprints to eleven and six, respectively. The Parent Co. said this would make it the second-largest operating retail dispensary and delivery hub in the State with an expanded reach to over 80% of California’s population.

The deal consists of $16.2 million in cash with a contingent consideration of up to $40 million in equity of The Parent Company upon completion of milestone events and a $9 million option to acquire the remaining equity of a southern California dispensary that Coastal currently holds a minority interest in.

“I am thrilled to add Coastal to our expanding retail network,” said Troy Datcher, Chief Executive Officer of The Parent Company. “With strategically positioned locations in high-traffic, densely populated regions, Coastal enables us to significantly increase our reach to a broader potential audience of consumers with both in-person retail and delivery options. In just over 4 months, we have more than tripled our operating retail stores in California.”

Mr. Datcher added, “As we continue to extend our reach in California, our focus remains on providing our customers with the exceptional product selection and retail experiences they have come to expect from us. I look forward to welcoming and working with the Coastal team and introducing their customers to our convenient in-store, delivery, and mobile app shopping options and full suite of high-quality brands.”

No.03 OG Handroll

The Parent Company’s product portfolio includes Monogram by Shawn “JAY-Z” Carter, Caliva, Deli, Fun Uncle, and Mirayo. Monogram just released its No.03 strain in the Heavy OG Handroll product type. The company said that the OG Handroll “takes inspiration from the smoke experience of a premium cigar, but implements a proprietary roll technique allowing the flower to burn slowly and evenly for multiple sessions. Highly trained artisan rollers break the flower down by hand, and roll using a time-honored process that was specially architected by MONOGRAM’s Culture & Cultivation Ambassador, DeAndre Watson.”

 


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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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