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StaffDecember 6, 2022
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BusinessDaily Hit

The Daily Hit: December 6, 2022

5min00

The Daily Hit is a recap of cannabis business news for Dec. 6, 2022.

ON THE SITE

Weedmaps Lays Off 25% of Staff

The parent company of online cannabis marketing giant Weedmaps.com laid off a quarter of its staff, or 175 employees, as part of a cost-savings move, the company reported in a filing with the U.S. Securities and Exchange Commission this week. Read more here.

Doyen Elements Geoff Thompson to Plead Guilty

The cannabis fraud drama of Doyen Elements, or Covalent Collective, might finally be coming to an end. Geoff Thompson is scheduled to enter a plea of guilty at a hearing on Dec. 13, 2022. In December 2021, Thompson was charged in federal court in Chicago for ripping off investors to the tune of $950,000. Read more here.

Irwin Naturals Shores up Mental Health Clinics as Revenue Slumps

Irwin Naturals Inc. (CSE: IWIN) (OTC: IWINF) posted results that showed dipping revenue as the nutraceutical giant tries to expand its wellness clinic footprint. The company attributed the slowdown in business to “volume and startup costs related to Emergence by Irwin Naturals (ketamine clinics) and Irwin Naturals Cannabis (intellectual property licensing to the cannabis industry).” Read more here.

Pennsylvania’s Trulieve Calling Dr. Wiz Khalifa

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF)  announced the official launch of Khalifa Kush premium medical marijuana products statewide in all Trulieve Branded Pennsylvania retail locations starting Monday, Dec. 12. Read more here.

Cannabis Industry Takes on Deadbeat Dealers

The cannabis industry is taking it upon itself to address deadbeat dealers within the industry – the people taking cannabis products to sell and then not paying for them. The most common payment term in retail is 30 days after the receipt of the product, however, that is being stretched to 60 and even 90 days in the cannabis industry. Read more here.

IN OTHER NEWS

HEXO Corp.

HEXO Corp. (TSX: HEXO) (Nasdaq: HEXO), a producer of high-quality cannabis products, repaid the total outstanding principal amount of the company’s 8% unsecured convertible debentures issued Dec. 5, 2019, which matured on Dec. 5, 2022, in the amount of C$40.14 million together with all accrued and unpaid interest. Read more here.

Glass House Brands

Glass House Brands Inc. (NEO: GLAS.A.U) (NEO: GLAS.WT.U) (OTCQX: GLASF) (OTCQX: GHBWF) closed the third and final tranche of its previously announced non-brokered private placement of Series B Preferred Stock, face value $1,000 per share of GH Group Inc., a subsidiary of the company. The final closing of the offering included approximately $7.8 million of cash. Of this, about $7 million was fresh capital. Read more here.

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StaffAugust 9, 2022
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BusinessDaily Hit

The Daily Hit: August 9, 2022

10min00

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.

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Debra BorchardtAugust 9, 2022
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BusinessPublic

Weedmaps Beats on Earnings, But Gives Cautious Outlook

4min00

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.”

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Debra BorchardtAugust 8, 2022
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BusinessPublicTechnology

Analyst Thinks Weedmaps Should Spill the T

5min00

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.”

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StaffMay 4, 2022
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BusinessDaily Hit

The Daily Hit: May 4, 2022

8min01

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. 

 

 

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StaffMay 4, 2022
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BusinessPublic

Weedmaps Beats Estimates For First Quarter Revenue

3min01

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.”

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