It’s time for your Daily Hit of cannabis financial news for April 16, 2020.
On The Site
In another sign of Illinois state market domination, Cresco Labs (OTCQX:CRLBF) completed the expansion of its cultivation facility in Lincoln, IL, which is the largest in the state. The company also finished the first phase of expansion at its Kankakee facility.
Cresco is the only operator in Illinois with three cultivation sites that are licensed to grow up to 630,000 square feet of flowering canopy. These expansions add almost 180,000 square feet of additional indoor and greenhouse cultivation space, bringing the total cultivation space to 215,000 square feet across all three of its Illinois facilities
Wick & Mortar/Chapter 2
Cannabis branding agency Wick & Mortar and next-generation communications agency Chapter 2 have announced a comprehensive, long-term strategic joint venture to create the first “one-stop super agency,” leveraging Wick & Mortar’s mastery of cannabis brand identity, design, marketing, and content creation, which will be amplified by Chapter 2’s expertise in powerful PR storytelling, brand strategy, network, and VIP/Influencer Services.
The idea is that the two companies will take clients from seed to shelf to becoming a household name. With a desire to give back to their community at this time of need during the Coronavirus pandemic and resulting economic fallout, the agencies have accelerated their partnership to launch immediately and dedicated their resources to a project aimed at providing much-needed aid to independent cannabis companies whose businesses have been heavily impacted.
Today a new trade organization, the Cannabis Beverage Association (CBA), announced its formation along with the founding board members that operate at the highest levels within the industry.
To advance the interests of cannabis beverage producers and their consumers through advocacy and education, it is the mission of the CBA to help the burgeoning cannabis beverage sector reach its potential; a potential beyond a robust market cap, but that can offset society’s dangerous affliction with alcohol consumption with products that are enjoyable, session-able, and offer the healthful benefits offered by cannabis consumption.
In Other News
Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) today announced a series of global operational changes.
Africa: Canopy Growth has entered into an agreement to exit its operations in South Africa and Lesotho, targeting a transfer of ownership of all of its African operations to a local business. The Company expects to close the transaction in the coming weeks.
Canada: Canopy Growth will shut down its indoor facility in Yorkton, Saskatchewan, to further align production in Canada with market conditions. The Company is confident its production capacity in Canada will meet consumer demand into the future.
Latin America: Canopy Growth will cease operations at its cultivation facility in Colombia, moving to an asset-light model that leverages local suppliers for raw materials and Procaps for formulation and encapsulation activities as outlined in the previously announced agreement between the two companies. These activities will support the position of Colombia as the Company’s LATAM production hub and the ongoing development of its cannabis industry.
United States: Canopy Growth will cease its farming operations in Springfield, New York, due to an abundance of hemp produced in the 2019 growing season. The Company will continue using this supply to produce hemp-derived CBD products for the US market.
Cannara Biotech Inc. (CSE: LOVE) (OTCQB: LOVFF) reported that for the three and six-month periods ending February 29, 2020, the Canadian segment had not yet generated cannabis-related revenues from its Canadian operations since the cultivation activities commenced in February 2020 following the grant of the cultivation license. As at February 29, 2020, Cannara QC has not yet harvested its first crop.
For the three-month period ended February 29, 2020, the segment incurred $2,666,770 in operating expenses compared to $1,375,075 in the same period of the prior year resulting in an unfavorable increase in operating expenses of $1,291,695.
For the six-month period ended February 29, 2020, the segment incurred $4,522,784 in operating expenses compared to $3,565,846 in the same period of the prior year resulting in an unfavorable increase in operating expenses of $956,938.
The company generated product revenue in the U.S. segment of $7,354 and incurred $7,947 in costs of goods sold resulting in a loss of $593 compared to nil for the same period as prior year. The segment incurred $522,053 in operating expenses compared to $458,451 in the same period of prior year resulting in an unfavorable increase in operating expenses of $63,602.
For the six-month period ended February 29, 2020, the Company generated product revenue of $13,075 and incurred $11,870 in costs of goods sold resulting in a profit of $1,205 compared to nil for the same period as prior year. The segment incurred $1,123,022 in operating expenses compared to $458,451 in the same period of prior year resulting in an unfavorable increase in operating expenses of $664,571.