Weedmaps Archives - Green Market Report

StaffAugust 9, 2022
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10min40

The Daily Hit is a recap of cannabis business news for August 9, 2022.

ON THE SITE

Cronos Makes Gains in The Second Quarter

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) reported its 2022 second-quarter earnings with net revenue of $23.1 million which jumped from last year’s $7.4 million for the same time period. However, total revenue before taxes was $28 million which just beat the Yahoo Finance average analyst estimates for revenues of $27 million. It was also better than the first quarter‘s revenue of $25 million. The stock was dropping by roughly 8% in early trading to lately sell at $3.26. Read more here.

Acreage Holdings Sees Revenues Climb, Pushes Eastward

Acreage Holdings, Inc. (CSE: ACRG.A.U, ACRG.B.U), (OTCQX: ACRHF, ACRDF) delivered positive results in the second quarter as the company moves away from established western markets in favor of emerging markets east of the Mississippi. The company reported its financial results for the first quarter ending June 30, 2022 after the market closed on Monday. Read more here.

Weedmaps Beats on Earnings, But Gives Cautious Outlook

WM Technology, Inc. (Nasdaq: MAPS) announced its financial results for the second quarter ending June 30, 2022. WeedMaps reported that its revenue increased 24% to $58.3 million over the second quarter of 2021. This slightly missed the Yahoo Finance average analyst estimate for revenues of $62 million. Net income was $19.8 million as compared to net income of $16.8 million from the prior year period. Read more here.

Hydrofarm Stock Craters as Sales Wither

Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM) slumped in trading on Tuesday as it posted second-quarter results that missed expectations — showing that consumer demand for hydroponics remained flat as a lack of regulatory guidance and recessionary pressures facing the sector persist. The company released its financial results for the second quarter ending June 30, 2022. Read more here.

MariMed Edges Up in Second Quarter Earnings

After the close on Monday, MariMed, Inc.  (CSE: MRMD) (OTCQX: MRMD) delivered its financial results for the second quarter ended June 30, 2022. MariMed’s revenue of $33 million just barely edged out the previous year’s revenue of $32 million and was higher than the first quarter’s revenue of $31 million. However, it missed the Yahoo Finance average analyst estimate for revenues of $36 million. The company reported a net income of $1.9 million versus last year’s net income of $7.6 million. Read more here.

Village Farms Beats on Revenue, as Produce Stays Strong

Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF)  announced its financial results for the second quarter ended June 30, 2022. Total consolidated sales increased 18% year-over-year to $82.9 million from $70.4 million. This beat the Yahoo Finance average analyst estimate for revenues of $70 million. Read more here.

Charlotte’s Web Misses on Revenue, Finds Hope Beyond The U.S.

Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) missed expectations as the CBD company continues to struggle amid a patchwork regulatory landscape. The company reported its financial results for the second quarter ending June 30, 2022. Read more here.

Cannabis Operators Plan to Raise Prices, Blaming Inflation

The word “inflation” has dominated headlines and earnings calls this year, and a survey from a leading national cannabis accounting and advisory firm solicited feedback to gauge how such rising costs are affecting the sector. In a month-long survey this year asking operators a series of questions regarding the impacts of inflation on their cannabis operation, GreenGrowth CPAs found that one in four operators reported planning to raise prices in the near or immediate future to combat rising inflation costs. Read more here.

Psychedelics Plays a Role In Metamodernism

There are stories about how psychedelics changed the minds of entrepreneurs not only seeking enlightenment in the San Francisco Bay Area beginning in the late 60s and early 70s but incorporating their psychedelic visions into business models. Read more here.

IN OTHER NEWS

Curaleaf Holdings, Inc., Pharma GmbH

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF), a U.S. provider of consumer products in cannabis, today announced that Curaleaf International Holdings Limited, the company’s European holding company, has signed a definitive agreement to acquire a 55% stake in Four 20 Pharma GmbH, a fully EU-GMP & GDP licensed German producer and distributor of medical cannabis with its own product line. Read more here.

Lowell Farms Inc.

Lowell Farms Inc. (CSE: LOWL; OTCQX: LOWLF), a California-born cannabis cultivation and maker of brand Lowell Smokes, announces unaudited revenue and operating results for the second quarter (ended June 30, 2022). All figures stated are in US Dollars. Read more here.

AFC Gamma, Inc.

AFC Gamma, Inc. (NASDAQ:AFCG) today announced its results for the second quarter of 2022. AFCG issued a presentation of its second quarter 2022 results, titled “Second Quarter 2022 Earnings Presentation,” which can be viewed at www.afcgamma.com under the Investor Resources section. AFCG also filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, with the Securities and Exchange Commission on August 9, 2022. Read more here.

Akanda Corp., Cansativa GmbH

International medical cannabis platform company Akanda Corp. (NASDAQ: AKAN) today announced it has signed a multi-year supply agreement with European medical cannabis leader Cansativa GmbH to supply EU-GMP quality THC dried flower strains cultivated from its Portuguese operations at Holigen. This new supply agreement marks one of the largest for medical cannabis to be exported from Portugal to serve the emerging European medical cannabis market. Read more here.

TRP, Cookies Florida, Inc.

TRP is bringing recognized cannabis brand Cookies to the Florida market through an exclusive partnership. The first Cookies dispensary in the state is opening at 8303 Bird Road in Miami, Florida on August 13, 2022. TRP looks forward to serving South Florida’s patients via its subsidiary and MMTC license holder Cookies Florida, Inc. Read more here.

22nd Century Group, Inc.

22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company dedicated to improving human health with reduced nicotine tobacco, hemp/cannabis, and hops advanced plant technologies, today reported results for the second quarter ended June 30, 2022, and provided an update on recent business highlights. Read more here.

MediPharm Labs Corp.

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ), a pharmaceutical company specialized in precision-based cannabinoids, announced it has entered into a research support agreement with the Keck School of Medicine of University of Southern California (USC) to conduct a randomized double-blind placebo-controlled Phase 2 trial on the efficacy of THC and CBD to treat hospice-eligible patients diagnosed with dementia and experiencing agitation. Read more here.

Mindset Pharma Inc.

Mindset Pharma Inc. (CSE: MSET) (FSE: 9DF) (OTCQB: MSSTF), a drug discovery and development company focused on creating novel, optimized, next-generation psychedelic and non-psychedelic medications to treat neuropsychiatric and neurological disorders with unmet medical needs, today issued a letter to shareholders from James Lanthier, Chief Executive Officer of Mindset. Read more here.

Cybin Inc.

Cybin Inc. (NEO: CYBN) (NYSE American: CYBN), a biopharmaceutical company focused on progressing “Psychedelics to TherapeuticsTM”, announced that it has established an at-the-market equity program that allows Cybin to issue and sell up to USD $35,000,000 of common shares. Read more here.


Debra BorchardtAugust 9, 2022
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4min140

WM Technology, Inc. (Nasdaq: MAPS) announced its financial results for the second quarter ending June 30, 2022. WeedMaps reported that its revenue increased 24% to $58.3 million over the second quarter of 2021. This slightly missed the Yahoo Finance average analyst estimate for revenues of $62 million. Net income was $19.8 million as compared to net income of $16.8 million from the prior year period.

The basic and diluted net income per share was $0.14 and $0.13 based on 86.4 million and 87.2 million Class A Common Stock weighted average shares outstanding, respectively. This bat the analyst estimate for earnings of ($0.05).

“Our second quarter results demonstrate how our strategy continues to drive growth for WM Technology as we grew our second quarter net revenue by 24% year-over-year to reach $58 million and increased Average Monthly Paying Clients to 5,537, both quarterly records,” said Chris Beals, CEO of WM Technology. “We believe these results again demonstrate how WM Technology is the enduring platform for the cannabis end-markets. And while the current macro environment, including challenges specific to the cannabis end-markets, did impact our results, our pace of innovation and continuing to deliver healthy returns to our clients resulted in us achieving growth that exceeded our end markets by a wide-margin. Clients continue to rely on our marketplace and WM Business solutions to help grow their own businesses. For that reason, we remain focused on executing against our plans to establish the Weedmaps marketplace as the center of commerce for cannabis consumers and WM Business as the software solution of choice for cannabis businesses.”

User Statistics

Weedmaps said that its monthly active users increased to 17.4 million on June 30, 2022, up 41% compared to the prior year’s period. The average monthly revenue per paying client decreased to $3,509, a 5% decrease compared to the prior year period. The average monthly paying clients increased to 5,537, a 31% increase compared to the prior year period. The company noted that it grew its average monthly paying clients by over 30% vs. last year, with many of these clients coming from regions where its licensee share is under 50%, demonstrating its ability to execute in newer markets.

Outlook

Weedmaps was pretty honest when it came to the outlook, that company said it was planning for total revenue to be flat-to-down in the mid-single digit percent area on a year-over-year basis for the second half, which implies a low double-digit percentage growth rate for the full year 2022. “We expect to end the year with positive Adjusted EBITDA for the full year 2022,” said the company in a statement.

The company was clear to point out that the guidance provided is only an estimate of what it believes is realizable as of the date of this release. The company said that the guidance assumes that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter.

“We continue to lean into the tremendous opportunity ahead of us and are focused on driving both near and long-term sustainable growth and profitability,” said Arden Lee, CFO of WM Technology. “In this environment, we also understand the need for prudent operational and investment decision making and we have taken steps to ensure these remain the case. We are as confident as ever in our business model and strategy.”


Debra BorchardtAugust 8, 2022
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Cantor Fitzgerald analyst Pablo Zuanic thinks Weedmaps or WM Technology Inc. (NASDAQ MAPS) could use a little more disclosure when it comes to talking about its statistics. While the analyst maintains his Overweight rating on the cannabis platform company, he also lowered his target price from $11.30 to $10.50. The stock was lately trading at $3.43 and the company reports its earnings on Tuesday after the market closes.

Zuanic sounds supportive of the company but seems to have tweaked his numbers and attributed that to a lack of visibility into the details backing those numbers. On the positive side, he notes that the company’s sales grew 6% sequentially at a time when most in the industry reported sales falling 3%). He also pointed out that Weedmaps is the “number one e-commerce marketplace and SaaS provider to the cannabis industry (close to 70% penetration of US retail shops; 16 million actively engaged monthly users; sales 5x those of comps like LFLY [NC] and 8x SBIG [NC]).” He went on to write, “Our anecdotal checks imply dispensary owners remain engaged with the platform and are not cutting spending.” Despite that, the analyst’s estimates for earnings are at the low end of the guidance range that Weedmaps had issued. His forecast is for sales of $60.9 million, while the range is $60 – $63 million.

Visibility Problems

The analyst outlined various issues he has with Weedmap‘s disclosures on its businesses. Zuanic was impressed with the company’s expanded suite of solutions but questioned whether they added to the top-line revenue. He wrote:

For starters, the company does not distinguish between the number of subscribers to the WM platform vs. the average monthly paying clients (AMPC). If we were to
assume both are the same (probably not), then it would seem subscription revenue per client is down (not a signal that paying clients are using the services more). The
company said WM business subscriptions were 20% of sales in 1Q22 vs. 23% in 1Q21; in that period, AMPCs increased 28%, so revenue per client would be down 5%.

The report also questioned the quality of the average monthly paying clients. While Weedmaps said that the AMPC grew, it didn’t dive any deeper into the quality of those accounts. Zuanic points out that he actually thinks this type of detail would be positive for the company. He thinks Weedmaps should break out the top five states and the penetration there. One example he gives is that adding paying clients that have stores with lower revenues isn’t as great as adding a client with higher revenue. He also believes that this type of transparency would shut down the complaints that Weedmaps continues to work with illicit operators – a claim Weedmaps denies.

It was also suggested that Weedmaps begin to report a type of same-store sales statistic. Retailers often use these statistics to show growth in established stores. Zuanic thinks Weedmaps could report on whether its established paying clients are increasing their spending year-over-year. He also would like to see more information regarding the monthly average users. Weedmaps claims it has roughly 40 million users, but of that number – how do they actually use the site? Zuanic would like to see statistics comparing search versus transactions.

Marketing Budgets

Zuanic also took a look at how much companies were allocating in their budgets for Weedmaps and sees a silver lining. He wrote, “We calculate CA accounts are spending about $8,000 per month on the platform (62% of 1Q22 sales of $57.5Mn divided by 3 months and by ~1,400 accounts) vs. >$2,000 for the rest. Very roughly, we estimate CA retailers (brick & mortar and online) generate about $3.8Mn in sales per month ($5.3Bn per year / 1,400 accounts) or $320K per month. If they spend $8,000 on the WM platform, that would be 2.5% of sales. If we assume these stores would spend 7-10% in marketing ($22-32K), then MAPS has room to expand penetration per store.”


StaffMay 4, 2022
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The Daily Hit is a recap of the top cannabis business stories for May 4, 2022.

ON THE SITE

TOP FIVE CANNABIS FRANCHISES

It isn’t McDonald’s (NYSE: MCD), but cannabis franchising is a very real part of the industry. Using data from Cannabiz Media, Green Market Report took a look at the top franchising leaders in the overall market. We then drilled down into Canada and the U.S. to see who the leaders are in each country. Read more here

WEEDMAPS 

Stifel analysts had some sobering thoughts on the cannabis industry in the company’s recent first-quarter outlook report. The most positive comments went to Weedmaps (NASDAQ: MAPS) as the analysts wrote, “We believe WM Technology is currently the best positioned public cannabis company to capitalize on category growth, with the ability to lead growth with unmatched capital efficiency, with the shares continuing to undervalue our robust growth outlook.” Read more here.

GMR WOMEN’S LEADERSHIP AWARD WINNER: KIM RIVERS

On April, 28, 2022, Green Market Report held its first-ever Women’s Summit. During the event, the Women’s Leadership Awards were announced and presented to the winners. Over the next two weeks, we will highlight each of these winners and congratulate them on their contributions to the cannabis industry. Read more here

PSILOCYBIN FOR DYING PATIENTS

There are a number of law firms building a list of clients in the psychedelics industry, in part because there are more issues percolating within the legal system about a federally illegal substance, and more companies exploring developments in this space. Read more here

SMALL PHARMA TRIALS DMT

Small Pharma (OTC: DMTTF), a London-based neuropharmaceutical company focused on psychedelic-assisted therapies, made big news recently with the announcement of the first clinical trial in February 2021, using N, N-Dimethyltryptamine (DMT) to treat major depressive disorder. Read more here

IN OTHER NEWS

FDA WARNING ON DELTA 8

Today, the U.S. Food and Drug Administration issued warning letters to five companies for selling products labeled as containing delta-8 tetrahydrocannabinol (delta-8 THC) in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act). This action is the first time the FDA has issued warning letters for products containing delta-8 THC. Delta-8 THC has psychoactive and intoxicating effects and may be dangerous to consumers. The FDA has received reports of adverse events experienced by patients who have consumed these products. Read more here

GREENTHUMB INDUSTRIES, INC. 

Green Thumb Industries Inc. (Green Thumb) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE dispensaries, today reported its financial results for the first quarter ended March 31, 2022. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars. Revenue increased 25% year-over-year to $243 million, flat compared to the fourth quarter of 2021. Read more here

SUGARMADE, CANNABIS GLOBAL, INC.

Sugarmade, Inc. (OTC Pink: SGMD) announces its first transaction relative to its collaborative cannabis cultivation strategy via a definitive and executed contract with Cannabis Global, Inc. (OTC Pink: CBGL). Under the terms of the agreement, Sugarmade, via partner licensed and permitted Lake County, California, cannabis cultivators, will produce approximately 25,000 pounds of “Fresh Frozen” cannabis, which Cannabis Global, Inc. will use in its product lines and will distribute to the California marketplace. Read more here

LUCID GREEN, CANNASAFE, CANNALYSIS, LABLYNX

Lucid Green, a UPC platform today announced three new partnerships with cannabis testing labs and lab information systems (LIMS) to expand full digitization of COAs in the cannabis supply chain. The new partnerships with CannaSafe, Cannalysis, and LabLynx build on Lucid Green’s existing partnerships with Confident Cannabis and Sonoma Lab Works. Through these new lab and LIMS partnerships, Lucid Green is connected to more than 400 individual labs in the U.S. Read more here

INDUSTRIAL HEMP MARKET 

The global industrial hemp market was found to be valued at $4,452.0 million in 2021, which is projected to reach a huge $60,682.8 million by 2030, increasing at a massive CAGR of 33.7% from 2021 to 2030. The growing need for hemp in several industries and the rising legalization of the cultivation of cannabis for industrial uses are some major drivers for the market. Hemp is now used in a variety of products, such as organic body care products, clothing, health foods, and biofuels. Read more here

ITEM 9 LAB CORP. 

Item 9 Labs Corp. (OTCQX: INLB) — a vertically integrated cannabis dispensary franchisor and operator that produces premium products — announced the accelerated growth of its dispensary franchise model, Unity Rd. across the U.S. with successful expansion into multiple new markets over the past two months. Currently, the Company has two dispensaries open in Colorado and Oklahoma with development across another 10 states, driven by more than 20 entrepreneurial groups. Read more here

 

 


StaffMay 4, 2022
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WM Technology, Inc. (Nasdaq: MAPS) announced its financial results for the first quarter ended March 31, 2022, with revenue increasing to $57.5 million, up 40% from the first quarter of 2021. This beat the Yahoo Finance estimate for revenues of $55.25 million.

The net loss was $(31.2) million as compared to a net income of $7.7 million from the prior-year period. The basic and diluted net loss per share was $(0.19) based on 72.5 million Class A Common Stock weighted average shares outstanding. This missed the Yahoo Finance average analyst estimate for ($0.04) per share.

Weedmaps added over 250 Average Monthly Paying clients in the quarter including in new states like Montana, which opened for recreational sales in January.

“Our first quarter results demonstrate how we’re playing offense and continuing to drive outsized growth as well as creating distance from the pack as the leading cannabis technology provider and commerce-driven marketplace. We grew our revenue 40% year-over-year to reach $57.5 million for the quarter, which was above the top end of our guidance, as we continued to grow our user and client base,” said Chris Beals, CEO of WM Technology. “We continue to deliver what we believe is outsized value to our clients and this allows us to grow faster than our end markets as businesses rely on our marketplace and solutions to grow their own businesses. At the same time, we are accelerating the pace of new features and integrations throughout our WM Business software platform. We are driving innovation in ways that will be more visible over the course of this year as we invest in large opportunities designed to accelerate growth. Our team remains hard at work and focused on executing against driving deep client engagement, establishing Weedmaps as the center of commerce for Cannabis consumers and expanding the adoption of our products.”

Outlook

Based on current business trends and conditions, Weedmaps is giving guidance for the second quarter ending June 30, 2022. Revenue is estimated to be between $60 million and $63 million, which represents 28-34% growth over the second quarter of 2021. “We continue to expect our Adj. EBITDA margins for the First Half will be breakeven to slightly positive as we front-load previously discussed investments against growth opportunities for the back half of this year and FY23 strategic opportunities.”


Debra BorchardtMay 4, 2022
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Stifel analysts had some sobering thoughts on the cannabis industry in the company’s recent first-quarter outlook report. The most positive comments went to Weedmaps as the analysts wrote, “We believe WM Technology is currently the best positioned public cannabis company to capitalize on category growth, with the ability to lead growth with unmatched capital efficiency, with the shares continuing to undervalue our robust growth outlook.”

The analysts said that their long-term outlook remained robust, but the near-term challenges are significant: decelerating category growth, oversupply, outsized pressure on lower-income consumer spending, rising input cost inflation, and increased capital costs. The average cannabis stock is down 34.5% year-to-date versus the S&P 500 which is -13%. 

Silver Linings

On a positive note, Stifel wrote, “We estimate the 1Q22 North American regulated cannabis sales grew 10%. We estimate Cronos Group and WM Technology’s 1Q22 revenue growth will dramatically outperform the category (+86%, 35% respectfully).” Even though the analysts tweaked their estimates for 2022 U.S. state-licensed sales, they still believe it will grow to $27.2 billion, +13% year-over-year, down from the previous $28.6 billion estimates. The year is also off to a good start as they believe first-quarter U.S. state-licensed cannabis sales grew +8% with key Western markets declining in 1Q22. 

Weedmaps

Analyst W. Andrew carter is keeping his Buy rating on WM Technology, Inc. (NASDAQ: MAPS), but is cutting his price target to $10 per share. The analysts wrote, “Our outlook suggests WM Technology will showcase a differentiated growth profile profitably capitalizing on cannabis category growth while utilizing its significant capital advantage to expand the platform’s reach and evolve its comprehensive SaaS offering for cannabis operators. We estimate 28% CAGR revenue growth (FY21-FY23E) predicated on increasing penetration, growing wallet share, and participating in the growth of six key U.S. markets we estimate will grow to over $13 billion in 2023.” The actual numbers could be even better because the analysts don’t include a significant contribution from the Canadian adult-use market or new adult-use markets like New York and Connecticut. “We believe our outlook will prove conservative given the resources for advertising, product development, and M&A. We believe the current U.S. environment provides WM Technology the ability to enhance its platform and deepen its moat without competition from well-resourced technology companies, thereby enhancing the ability to capitalize on our $100 billion U.S. state licensed category estimate.”

Hydroponics Dry Up

The hydroponics business that showed so much promise has dried up for the time being. The analysts reduced their outlooks for both ScottsMiracle-Gro and Hydrofarm. “Our outlook now includes a deeper and longer hydroponics category recession with the category not resuming growth until 4Q22.” However, the two stocks still have buy ratings but lowered price targets. 

 

Scotts

The Scotts Miracle-Gro Company (SMG) now has a price target of $130 per share and was lately selling at $105. They wrote, “We believe the long-term earnings growth profile is dramatically undervalued. We believe this earnings growth will come into focus following F2Q22 earnings with our outlook suggesting 11% CAGR from the F2Q22 trough through FY24.”  On a positive note, Stifel said that the Hawthorne business is undervalued within the current structure with capital allocation increasingly inefficient and likely crowding out investors. “But we believe the company will be unable to execute a separation potentially unlocking value even as hydroponics category conditions improve given the investment behind RIV Capital (RIV-CNQ). We believe the investment behind RIV Capital is a mistake and will require additional commitments from ScottsMiracle-Gro. We believe a standalone Hawthorne would be unable to support continued investments. We believe RIV Capital’s anchor investment Etain was expensive, and we view the strategy outlined by RIV Capital as undifferentiated with the investment potentially driving concern/scrutiny from Hawthorne customers.”

Hydrofarm

Hydrofarm Holdings Group Inc. (HYFM) now has a price target of $13 per share, but was lately selling at $9.56. “We believe that Hydrofarm is between a rock and hard place in the current environment with the category leader actively touting increased promotion and hydroponics category conditions deteriorating. But Hydrofarm is not at the mercy of the current environment, and we believe Hydrofarm is positioned to emerge stronger for a reacceleration in category growth as supply normalizes while new state cannabis systems present more fulsome hydroponics category growth opportunities.”  Having said that the analysts think that the significant underperformance has pushed the shares to a level undervaluing the profit growth relative to peers in similar verticals. “We believe our outlook will prove conservative with enthusiasm likely to build for the platform’s earnings power as well as the ability to profitably capitalize on cannabis category growth.”

Bad Buzz

Stifel was pretty downbeat on Canopy Growth Corporation (WEED.CN). The analysts have a Sell rating on the company and a target price of C$6 per share. It was recently trading at C$7.82.  The report wrote, “Even with additional cost savings, our outlook underscores the growing risk with Canopy not able to satisfy its C$600 million convertible debt maturity in cash while maintaining its minimum liquidity requirement. We expect additional actions to complement the recent cost savings initiatives, but we believe there are no actions Canopy can take to drive the equity price higher with the core issue, the need to reaccelerate revenue growth, increasingly difficult. When Constellation invested C$5 billion into Canopy Growth, the platform enjoyed an unmatched capital advantage for capitalizing on cannabis sector growth; through mismanagement and poor stewardship, in our view, by Constellation Brands, Canopy Growth is now at the mercy of a difficult environment with non-Constellation investors bearing outsized risk.”

The other sell rating is reserved for Aurora Cannabis Inc. (ACB) with a lowered target price of C$3.00. “Our outlook suggests Aurora will not return to y/y revenue growth until 2H23. While our outlook for profitability conforms to the company’s guidance, the outlook is uninspiring with our estimates suggesting just C$10 million in FY24 EBITDA implying an EV/FY24E EBITDA multiple of over 80x. The company cash needs are manageable but ongoing, and the company has $329 million of convertible debt due in February 2024 that we believe the company will have to manage the balance sheet through additional equity issuances yielding additional dilution.”

In Closing

While some of the Stifel report is pretty downbeat, it really just seems like a reality check. Companies with mountains of debt coming due is certainly worth commenting on and if those companies don’t have growing revenue, then that’s a problem. The industry itself continues to grow which is why the analysts said the long-term outlook is good. It’s these near-term hurdles that some companies will be unable to jump.


Andrew WardApril 4, 2022
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It’s a well-accepted anecdotal fact that cannabis and music go together. From the jazz clubs to the headbangers ball to underground hip hop shows and beyond, where there’s music playing, pot’s often being consumed. 

That long-lasting bond has recently come in handy for brands looking to connect with legal consumers. Federal regulations prohibit cannabis from online ads, forcing marketers and brands to ramp up creativity. In recent years, cannabis brands have become increasingly present at music festivals and concerts through sponsorships, activations and other consumer-facing endeavors.

“When executed correctly and compliantly, live event marketing collaborations can absolutely drive sales and brand awareness, as well as form lasting consumer relationships and promote brand loyalty,” said Andreas Neumann, Jushi Holdings Inc (OTCMKTS: JUSHF) (CNSX: JUSH) chief creative director and 2020 Grammy award winner for Best Album Package. 

While short on data, cannabis leaders say they’ve witnessed the potential in live events marketing and partnerships with cannabis-friendly artists. 

Live Event Marketing Grows In Cannabis

Like cannabis and its various medical claims, most seem to accept anecdotal feedback regarding the return on investment (ROI) for live event sponsorships. While additional findings would conclude the debate, most already agree on its efficacy.

“While legal cannabis is still a relatively young industry, the effectiveness of event marketing has been proven over and over in many other industries, including CPG,” said Glass House Brands Inc (OTCMKTS: GLASF) President Graham Farrar.

The uptick in cannabis at events has been noticeable, particularly in states with legalized adult-use and/or relaxed public consumption laws. 

“While we have more regulations to contend with, it doesn’t change the value that live events can bring,” said Farrar. 

Additional regulations, like bans on sales and onsite consumption, can prove detrimental, but brands have not let them thwart live music marketing endeavors. 

Associating With Live Acts Reportedly Pays Off

As cannabis becomes more widely accepted, its presence grows at significant live events. So much so that the plant is sometimes front and center. 

In October 2021, Eaze’s Grass Lands served as the hub for all things cannabis during the three-day Outside Lands Festival. Grass Lands came complete with its own stage and a three-day live music and comedy lineup. Event partners included Cookies, PAX, and Autumn Brands.

In January 2022, Veritas Fine Cannabis sponsored the 10th anniversary of the Winter on the Rocks concert held at Denver’s Red Rocks Amphitheater. Diplo and Talib Kweli headlined the event. Veritas’ featured onsite activations to improve the concert experience, including free shuttle rides and live paintings by artist Morgan Mandala.

“Live event marketing enables us to position ourselves in front of a new audience, as these events bring people from various backgrounds together,” said Veritas Marketing Director Jordan Plunkett. 

The company also offered dispensary workers exclusive perks, including a performance by funk band Lettuce, catered meals, and early access to new products. 

Taylor Saralli, the company’s presentation manager, noted that Veritas engages in various live events each year, including activations with electronic artist Pretty Lights and art exhibits from Meow Wolf. 

Saralli, who considers live music one of the company’s most effective marketing tools, added, “Live events allow us to interact with, celebrate and create genuine relationships with our consumers and the budtenders who sell our products.”

Plunkett noted positive results from the Red Rocks event, including over 5,000 new consumer signups, 5,700 unique website visits, approximately 12% increase in social media engagement and roughly 300 new social media followers.

Others are reporting the benefits of live events. Juanjo Feijoo, COO & CMO for WM Technology Inc (NASDAQ: MAPS), didn’t offer financial figures but noted that activation partners had seen increased numbers from live event activations.

He noted that a 2021 live event collaboration at the multi-day Aftershock Festival with Sacramento-based dispensary and delivery service KOLAS paid off immensely. Their endeavor, the Loud Lounge, allowed guests to kick back while waiting for delivery orders. 

Feijoo said sales boomed for KOLAS, resulting in “The equivalent of two or three weekends of orders for them.” He attributed the success to finding consumers in one collective event.

Thinking Beyond The Show

Opportunities exist beyond the venue, offering brands and performers ample opportunity to collaborate. 

One example includes the September 2021 partnership between Denver’s Seed & Smith and electronic artists Big Gigantic. The company featured strains chosen by the band as part of the release of the company’s DART pod system. The company reported seeing a worthwhile ROI from the deal.

“Having that name attached to the DART certainly influenced some purchasing,” said Robbie Wroblewski, director of community outreach for Seed & Smith. The company did not provide financial data to support its report.

 


Debra BorchardtFebruary 23, 2022
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4min160

WM Technology, Inc. (Nasdaq: MAPS) announced its financial results for the fourth quarter ending December 31, 2021. Total revenue increased to $54.2 million, up 22% from the fourth quarter of 2020 or 39% in the U.S. (when adjusting the prior fourth quarter to exclude revenue associated with Canada-based retail operators who failed to provide valid license information and were subsequently removed from the Weedmaps marketplace). This beat the Yahoo Finance average estimate for sales of $51 million and was higher than the third quarter’s sales of $50 million.

The net income was $78.4 million versus $10.1 million from the prior-year period. However, the total operating expenses were $59  million so the quarter was still operating at a loss. The company benefited from a change in the fair value of a warrant liability to the tune of $82 million.

For the full year, total revenue increased to $193.1 million, up 19% from the prior year or 48% in the U.S. (when adjusting the prior year to exclude revenue associated with Canada-based retail operators who failed to provide valid license information and were subsequently removed from the Weedmaps marketplace). Net income was $152.2 million as compared to $38.8 million from the prior year.The basic and diluted net income per share was $0.53 based on 66.0 million and 66.3 million of Class A Common Stock weighted average shares outstanding, respectively. This also beat analyst estimates, which was for $0.04.

“Our fourth quarter performance was the largest quarterly revenue in our Company’s history at $54 million, which represents a 39% year-over-year growth in our U.S. business. Further, we added over 300 new paying clients during the fourth quarter and expanded our share of licensees in the U.S.,” said Chris Beals, CEO and Chairman of WM Technology. “We believe our growth in the current environment underscores the value we continue to deliver to our clients and is evidence of how they fundamentally understand the importance of Weedmaps to grow their businesses. I’m excited by the opportunities ahead of us in 2022. We will continue to drive deep client engagement, establish Weedmaps as the center of commerce for cannabis consumers and expand adoption of WM Business as we look to attack new markets. Finally, I’d like to thank all of the team members at WM Technology for their collective contribution to our growth.”

2022 Outlook

The outlook for the fiscal year ending December 31, 2022, is expected to be as follows:

  • Full year Revenue is estimated to be between $255 million and $265 million, which represents 32-37% growth, with first-quarter revenue between $54 million and $56 million, which represents 31-36% growth
  • Full year Adjusted EBITDA is estimated to be between $15 million and $20 million and includes the impact of approximately $30 million in planned investments related to initiatives for growth in fiscal year 2023 and beyond. Adjusted EBITDA margins for the first quarter are expected to be breakeven

StaffDecember 3, 2021
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2min210

WM Technology, Inc. (Nasdaq: MAPS) filed a Form S-1 with the Securities and Exchange Commission on December 2, 2021 to register for resale shares of Class A common stock of the company previously issued as partial consideration for previously announced acquisitions that occurred in the fiscal third quarter of 2021. Weedmaps said it would not receive any proceeds from the sales of the shares.

In the third quarter Weedmaps bought MembersRSVP, LLC and Text Ripple, Inc. collectively known as “Sprout” and the equity interests of Transport Logistics Holding Company also known as Merry Go Jane (“Cannveya and Canncurrent”). As part of the deal, Weedmaps issued a total of 1,938,798 shares of Class A common stock to certain stakeholders of the counterparties to such transactions.

Back in June, Weedmaps combined with the SPAC Silver Spike Acquisition Corp. and became known as WMH and Silver Spike changed its name to WM Technology, Inc.

As a result of the Business Combination, holders of units of WMH will be able to exchange such Units, together with corresponding shares of Class V common stock of the company, for Class A common stock of the Company during Quarterly Exchange Notice Periods, the first of which begins on the third business day after the Company announces its Q4 FY21 earnings. The company though has not released a date for that announcement. After any such exchange, such holders would be able to sell their shares of Class A Common Stock.


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