TILT Archives - Green Market Report

StaffStaffJune 23, 2020
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9min2950

It’s time for your Daily Hit of cannabis financial news for June 23, 2020. 

On The Site 

Aurora  

Aurora Cannabis Inc.  (NYSE: ACB) is the latest cannabis company to destroy the job argument as a reason for legalization. The Canadian cannabis company laid off 25% of Aurora’s SG&A staff, most of those to take place immediately and a roughly 30% reduction in production staff over the next two quarters. The cuts went to the highest levels including a restructuring of the executive leadership team and the recently announced retirement of President Steve Dobler. 

Aurora said it has initiated a plan to close operations at five facilities over the next two quarters in order to focus production and manufacturing at the Company’s larger scale and highly efficient sites. The company will take a charge of $60 during the fourth quarter in order to make these changes. 

Harvest Health 

Harvest Health & Recreation Inc. (OTCQX: HRVSF) said that it has completed the initial closing of certain retail properties in California to Hightimes Holding Corp. as previously announced on April 28, 2020, and June 12, 2020. The deal was recently amended from the original 13 operational and pending properties to ten. Those terms have now been reduced to a deal now valued at $67.5 million. The terms are now $1.5 million in cash and a $4.5 million one-year promissory note with 10% interest and $61.5 million in Series A Preferred stock issued by Hightimes Holding Corp. 

Organigram 

Organigram Holdings Inc.  (NASDAQ: OGI) issued a very brief announcement stating that the company was facing a lawsuit and that it was changing its newly launched Trailer Park Buds brand. Organigram said it wouldn’t comment on the case, which was started in the Court of Queen’s Bench in Alberta. It is a class action case that seeks damages from many cannabis companies including Organigram. 

In Other News 

TILT

TILT Holdings Inc. (OTCQB: TLLTF) reported Quarterly revenue of $42.4 million, up 27% Quarter over Quarter and 23% over Q1 2019. The company reported a positive net income of $50,925.  

“We are pleased to report our Q1 financials, which were driven by strong performances from our well-balanced portfolio of businesses,” said Mark Scatterday.  “Our first quarter revenue was up 27% Quarter over Quarter, and gross margins grew to 27.7%, demonstrating the durability of our business model as we support our customers in their quest to build winning cannabis brands.” 

“With our portfolio of market-leading businesses, TILT is activating multiple revenue streams leading to increased cash flow generation and shareholder value creation.  We are proud of our team’s agility and fortitude in the face of this ever-evolving and challenging environment, and look forward to continuing to build on the solid foundations we’ve established.  We believe that we will continue to move in a positive trajectory as the economy shifts into a more normalized environment.” 

Trading Ceased

The following companies are suspended pursuant to CSE Policy 3. The suspensions are considered Regulatory Halts as defined in National Instrument 23-101 Trading Rules. A Cease Trade Orders have been issued by one or more securities commissions. 

Alternate Health Corp.  AHG  Ontario Securities Commission 
Champignon Brands Inc.  SHRM  British Columbia Securities Commission 
CIM International Group Inc.  CIM  Ontario Securities Commission 
iAnthus Capital Holdings Inc.  IAN  Ontario Securities Commission 
Ionic Brands Corp.  IONC  Ontario Securities Commission 
Sunniva Inc.  SNN  Ontario Securities Commission and British Columbia Securities Commission 

Debra BorchardtDebra BorchardtMarch 4, 2020
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4min11960

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) vape subsidiary Jupiter Research said it was back online following Chinese New Year and minor delays associated with the novel coronavirus COVID-19. The virus caused many parts of the country to impose strict quarantines on its residents. This resulted in several factories having to shut down as employees stayed home.

“We are proud to report that manufacturing lines have been open since February 17, 2020, and can confirm our first post-Chinese New Year ocean and air shipments are en route,” stated Mark Scatterday, CEO of TILT and founder/CEO of Jupiter Research. “Each year, Jupiter strategically forecasts inventory positions for the Chinese New Year holiday and beyond, which aims to navigate our customers’ needs when production is halted for a variety of reasons. With the product on hand stateside, our sales team has been actively receiving orders and fulfilling customer requests, along with our in-house print operations increasing capacity for domestic fulfillment.”

The vape industry struggled throughout 2019 as the vape crisis caused numerous deaths and multiple hospitalizations. The FDA ultimately determined that it was illicit market vape products that had caused the crisis. These companies were adding in fillers like Vitamin E which had disastrous results. Consumers have now learned to only purchase products from reputable sources.

“The Coronavirus outbreak in China has caused production delays across all industries, including ours, which produce products in Shenzhen and other manufacturing hubs along the China coast. Jupiter’s customer’s orders are being produced and shipped, which shows progress our manufacturers and Asian operations team have made. Our inventory position paired with our in-house print production has enabled our ability to continue placing P.O.’s, fulfill both custom and stock orders, and navigate the future potential for unforeseen delays in manufacturing,” added Mr. Scatterday.

The pause in production in China may have been an unexpected pleasant surprise. According to Cowen analyst Vivien Azer, the industry was reporting high levels of oil inventory. Vape pens are still the second biggest cannabis category behind flower and in the U.S. sales rose from 21% of the market in 2018 to 23% of the market in 2019 according to data provided by Headset and Cowen.

A TILT statement said that it all if its raw materials undergo a UV sterilization process prior to entering the production floor. Medical grade ethanol, known as an antiseptic for its bactericidal and antifungal effects, is currently used to clean the assembled components at several stages of the manufacturing process.

“Our ongoing commitment at Jupiter is to employee and customer safety, and the highest level of manufacturing processes,” Mr. Scatterday said. “We are optimistic for the future, and we appreciate our customers’ continued confidence and sup


Video StaffVideo StaffOctober 4, 2019
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7min8970

Green Market Report thanks the ArcView Group for allowing us to tape Marijuana Money from their event this week. 

Constellation Brands (NYSE: STZ) wrote down its Canopy Brands (NYSE: CGC) investment to the tune of almost half a billion dollars. Constellation, which also owns Modelo beer and Robert Mondavi wines, said its share of equity losses from its roughly $4 billion investment came to $484.4 million. 

 Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company.

Gotham Green Partners has invested an additional $20 million in iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) through the purchase of senior secured convertible notes. Green Gotham said it was part of a broader $100 million financing plan to support the buildout of all existing markets in which iAnthus currently operatesTerrAscend Corp. 

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even.

Fire & Flower Holdings Corp. (TSX: FAF) its financial results for the second fiscal quarter ending August 3, 2019, with total revenue of $11.1 million versus $9.5 million for the same time period in 2018. The net loss for the quarter was $6.4 million.

High Tide Inc. (CSE:HITI) (OTCQB:HITIF) announced financial results for the third fiscal quarter of 2019 ending July 31. Revenue in the third quarter increased by 281%, to C$8 million from C$2 million last year. 

48North Cannabis Corp. (TSXV: NRTH) delivered net revenue of $4.8 million marking 48North’s first full year of revenue, but a net loss of $8.1 million. In fiscal 2019, the company raised over $48 million and at the end of the year had $52.7 million in cash and cash equivalents on hand.

Arizona-based DNA testing technology company PathogenDx, Inc. announced $7.5 million in Series B funding. 

And finally HeavenlyRx Ltd. Acquired CBD company PureKana. 


StaffStaffOctober 2, 2019
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6min7160

It’s time for your Daily Hit of cannabis financial news for October 2, 2019.

On The Site

Vape Recovery

Vape products, once considered the rising stars of the legal cannabis marketplace have struggled under the weight of the vaping crisis. Massachusetts banned all vape products for four months in order to err on the side of caution while the issue is investigated. Around the middle of August, vape product sales began dropping according to data from Headset, however, it seems the group may be slowly recovering.

Sales in Nevada and Washington both began to pick back up, while California seems to have stabilized. Most consumers are learning that the issues with vapes stemmed from products purchased outside the regulated channels. 

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Canopy Rivers

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000, and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024.

In Other News

TILT Holdings

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger, as well as the final separation of most of these founders from the Company. During the second quarter of fiscal 2019, the company reported stock-based compensation expense of greater than $47 million associated with these now forfeited stock options. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even. The successful forfeiture of these stock options follows the recent announcement of an adjusted EBITDA positive month of July

HeavenlyRx

HeavenlyRx Ltd. Acquired CBD company PureKana. Under the agreement, HeavenlyRx will acquire a majority ownership stake from the Company’s founding members with the acquisition expected to close by the end of 2019. Standing alongside HeavenlyRx’s high ethos and quality standards, PureKana – located in Scottsdale, Arizona – is a rapidly growing CBD brand and company with a large consumer base that leans toward a young and active demographic.

Westleaf

Westleaf Inc. (TSX-V:WL) (OTCQB:WSLFF) signed amendment agreements to two of its existing credit facility commitment letters with ATB Financial resulting in an additional $5.7 million of capital available for use by the Company. Westleaf has increased its term loan on The Plant, its fully completed extraction, manufacturing and product formulation facility, by $2.7 million and has secured a $1.0 million revolving credit facility to assist with working capital provided that any draw downs in relation thereto can only be made after final receipt of a standard processing license for The Plant from Health Canada. In addition, the credit facility related to the construction of Westleaf’s cultivation facility in Battleford, Saskatchewan has been amended to reduce its restricted cash requirement by $2.0 million.


William SumnerWilliam SumnerMay 2, 2019
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6min7060

It’s time for your Daily Hit of cannabis financial news for May 2, 2019.

On The Site

Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) is acquiring the German-based, Bionorica SE-founded C3 Cannabinoid Compound Company in an all-cash deal valued at €225.9 million (CDN $342.9 million) or roughly $250 million. The move is intended to expand Canopy Growth’s reach in Europe.

Plus Products

Plus Products Inc. (CSE: PLUS) (OTCQB: PLPRF) reported its results for the fourth quarter and calendar year ending December 31, 2018. The quarter’s revenues were $3.3 million and the company delivered a net loss of $2.9 million. This was an increase in sales of 770% over 2017 for the same time period and a 31% sequential increase.

Executive Order Establishes Michigan Marijuana Regulatory Agency

Governor Whitmer’s executive order 2019-07 has established the Marijuana Regulatory Agency (MRA) within the Department of Licensing and Regulatory Affairs (LARA), combining previous authorities, functions, and duties into an agency which allows the state of Michigan to more efficiently regulate both medical and adult-use marijuana.

In Other News

Planet 13

Planet 13 Holdings Inc. (CSE: PLTH) (OTCMKTS: PLNHF) has announced their fourth quarter and full-year financial results for 2018. In the fourth quarter, revenues rose to $8.3 million. Adjusted EBITDA was a loss of $1.9 million, and the company had a net loss of $4 million. For the year, revenues were $21.2 million, adjusted EBITDA was a loss of about $0.5 million, and the company incurred a net loss of $10.7 million.

TILT

TILT Holdings Inc. (CSE: TILT) (OTCMKTS: SVVTF) has announced their year-end financial results for 2018. Revenue for the year was $5.7 million with an additional $98 million in pro forma revenue. The net loss was $552.1 million, but that included a $496.4 million one-time, non-cash goodwill impairment taken at the end of fiscal 2018 related to the company’s reverse takeover of Sante Veritas Holdings. Excluding the reverse takeover, the company’s net loss was $55.7 million.

True Leaf

The pet-focused hemp and cannabis wellness brand, True Leaf Medicine International Ltd. (CSE: MJ) (OTCQX: TRLFF) (FSE: TLA) announced today that they have received C$914,442.73 from the exercise of warrants before their expirations on April 21, 2019. In total, the company exercised 2,575,895 warrants at a price of C$0.355 per warrant. “True Leaf is proud to have strong support from our investor community as demonstrated by the successful warrant exercise,” said Darcy Bomford, Founder and CEO of True Leaf. “This additional capital will strengthen our balance sheet and allow us to continue to execute on our growth plans, including bringing a legally-compliant CBD product for pets to market and expanding our global distribution, including entering new markets in the Asia Pacific region and Australia.”

Alternate Health

Alternate Health Corp. (CSE: AHG) (OTCQB: AHGIF) is making a play for the CBD industry. Today the company announced that it will acquire Blaine Labs Inc., a manufacturer and distributor of FDA-approved and cGMP-certified dermatological products, for $20 million. Blaine Labs currently has over 50 SKUs currently available in major retailers, including Walmart, Amazon, CVS and Walgreens. Alternate Health hopes to use the company’s existing equipment and distribution network to launch a proprietary line of CBD-infused products.

CannTrust

CannTrust Holdings Inc. (TSX: TRST) (NYSE: CTST) has announced the pricing of its previously-announced underwritten public offering. The company is selling 30,909,091 common shares at a price of $5.50 per share for gross proceed of around $170 million, minus underwriting discounts and commissions and estimated offering expenses. Some shareholders are also selling 5,454,545 common shares in the offering. Additionally, the company has granted to the underwrites a 30-day option to purchase up to an additional 4,636,363 and 818,182 common shares, respectively, at the public offering price. The offering is expected to close on or around May 6, 2019.


StaffStaffFebruary 14, 2019
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2min11080

TILT Holdings Inc.  (CSE: TILT) (OTC: SVVTF) announced preliminary and unaudited pro forma January 2019 gross revenue of $18.3 million. The company’s pro forma January revenue was driven by continued growth of all companies within TILT, including recent acquisitions.

In just January 2019 TILT said its unaudited gross revenue was $13.8 million versus the $7.6 million for the entire year of 2018. Gross margins for January were 16% given the early stages of business integrations, and full-year 2018 gross margins were 21%.

TILT‘s annual audited financials will be available prior to April 30, 2019, and consolidated financials for the first quarter, including the acquisitions of Jupiter, Standard Farms and Blackbird, will be available prior to May 31, 2019.

The company said that increases in Jupiter shipments reflected strong consumer demand of the company’s vaporizers. Blackbird’s continued expansion in California and success in the Nevada wholesale market boosted revenue. In Pennsylvania, Standard Farms is among the leading cultivation and production companies, selling their product wholesale throughout the state.

Baker saw an increase in the number of dispensaries using their software in January. Finally, TILT’s MA operations contributed as well, though January numbers do not reflect the opening of any recreational stores, which are expected to come online throughout 2019.

“Following the Business Combination and TILT’s public listing on the Canadian Securities Exchange in early December 2018, we have been able to acquire and integrate numerous market leading cannabis companies,” said Alex Coleman, Chairman and CEO of TILT.


Debra BorchardtDebra BorchardtJanuary 3, 2019
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4min31460

TILT Holdings Inc.  (CSE: TILT) (OTC: SVVTF) has acquired vape technology company Jupiter Research in a deal valued at $210 million. The acquisition is expected to close on January 31. TILT’s goal was to expand its technology ecosystem and B2B reach across the supply chain.

“Our latest acquisition of Jupiter Research is paramount to our goal of consolidating and centralizing services for all industry verticals: cultivation, production, and retail,” said Alex Coleman, Chief Executive Officer of TILT Holdings. “Vaporization is increasingly becoming the preferred method for cannabis consumption. With Jupiter’s proprietary inhalation technology, our offerings in this category are going to be unparalleled.”

Jupiter Research was founded in 2015 by prior NJOY product developer Mark Scatterday and Bob Crompton, founded in 2015. Jupiter Research produces power supplies and cartridges specifically designed for cannabis oil in the market today, featuring exclusively ceramic CCELL technology. The company said that Jupiter has achieved annual orders over US$100M in 2018, ending the year with over a US$30M sales backlog.

“Our rich heritage in CPG and e-cigarette product innovation combined with long-standing manufacturing partnerships in China provided us a market leading advantage to bring advanced high-performance technologies to the cannabis industry,” said Scatterday, the company’s President.

Crompton added, “Jupiter Research’s monthly sales ccontinue to increase 15 percent month over month, ending Q4 with booked orders exceeding US$44M.  The opportunity to combine the synergies of the TILT portfolio of companies is expected to add to our rapid growth.”

TILT only recently began trading on the Canadian Securities Exchange under the ticker symbol “TILT” after its acquisition of Standard Farms.  TILT acquired Standard Farms for $12 million in cash and $28 million in securities. Securities for TILT were issued at C$5.25 per common share and, pending regulatory approval, the acquisition is expected to close on March 31, 2019.

Also last month, TILT  acquired the cannabis distribution company Blackbird Holdings Corp. for $50 million. Providing logistics operations and software solutions for operators in the cannabis supply chain, Blackbird works with more than 250 wholesale and retail cannabis operators in the states of California and Nevada; with plans to increase its footprint in California and to expand into Arizona and Massachusetts.

Terms Of The Deal

TILT said that the deal consists of $70M cash and $140M in units exchangeable for 56,116,723 shares of TILT.

 


William SumnerWilliam SumnerDecember 6, 2018
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2min14470

The cannabis technology platform, TILT Holdings Inc. (CSE: TILT), announced today that it had acquired the cannabis distribution company Blackbird Holdings Corp. for USD $50 million.

Providing logistics operations and software solutions for operators in the cannabis supply chain, Blackbird works with more than 250 wholesale and retail cannabis operators in the states of California and Nevada; with plans to increase its footprint in California and to expand into Arizona and Massachusetts. The company also provides a consumer marketplace for cannabis delivery, dubbed BlackbirdGo, which helps its California clients connect to approximately 95,000 consumers statewide.

Under the agreement, TILT will pay $5 million in cash and $45 million in securities. This will include issuance of compressed shares of TILT, which is comprised of 100 common shares per compressed share, at a price of C$5.25. The acquisition is expected to close on January 31, 2019.

The Blackbird acquisition represents a major expansion of our operations and delivery capabilities for cannabis businesses,” said Alex Coleman, CEO of TILT. “Blackbird has built out an incredible offering of solutions focused on distribution and last-mile, direct-to-consumer delivery as well as software for wholesale and retail inventory management. That is an important element of our portfolio and we’re happy to welcome Blackbird to the TILT family.”

TILT Goes Public, Releases Details on Other Acquisition

TILT also announced today that the company has begun trading on the Canadian Securities Exchange under the ticker symbol “TILT” and has released further details about its previously announced acquisition of Standard Farms.

Standard Farms is a multi-state medical cannabis company that focuses on extraction and cultivation, and its products are in approximately 95% of Pennsylvania’s dispensaries. TILT has acquired Standard Farms for $12 million in cash and $28 million in securities. Securities for TILT will be issued at C$5.25 per common share and, pending regulatory approval, the acquisition is expected to close on March 31, 2019.


Debra BorchardtDebra BorchardtNovember 23, 2018
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3min15980

TILT is getting one step closer to listing its shares on the Canadian Securities Exchange using the symbol TILT. This week the company closed on its merger and announced a capital raise of $119 million by a special purpose financing entity “Finco.”  Finco issued 22,886,858 subscription receipts at a price of C$5.25 per subscription receipt.

TILT Holdings is the merger of Baker Technologies Inc., Briteside Holdings LLC, Sea Hunter Therapeutics, LLC and Santé Veritas Holdings Inc. (CSE: SV). The business combination results in the creation of two market business lines focused on infrastructure and technology which, along with the people and capital, allows TILT to deliver products to businesses and consumers.

“With TILT we are building a technology-driven infrastructure solution to maximize customer engagement and product delivery while also enabling industry participants to scale across new markets with these same systems,” said Alex Coleman, Co-Chairman and Chief Executive Officer of TILT, and co-founder of Sea Hunter. “We intend to leverage the Business Combination and the net proceeds of the Offering to accelerate our growth across the cannabis industry with a pipeline of infrastructure expansions, acquisitions and partnerships. We are well-positioned to effectively and efficiently capitalize on the consolidation that is occurring across most markets in the industry with the goal of delivering the highest quality products and services where laws permit.”

Terms Of The Deal

The offering was completed by a syndicate of agents led by Canaccord Genuity Corp. and including Cormark Securities Inc., Eight Capital Corp., GMP Securities L.P., PowerOne Capital Markets Limited, Haywood Securities Inc. and Gravitas Securities Inc.

The statement said that each subscription receipt would automatically be converted into one Finco common share immediately prior to and in connection with the completion of the merger, without payment of additional consideration or further action on the part of the holder. As part of the merger, each Finco common share was exchanged for one common share of the company.

“With a presence in a third of all U.S. dispensaries, TILT – through Baker – will have a proven track record of engaging consumers and optimizing dispensary operations and revenue,” added Coleman. “With this capital raise, we are poised to grow our market share and enable more retailers to increase store traffic, revenue and customer loyalty.”

 



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