It’s time for your Daily Hit of cannabis financial news for April 27, 2020.
On The Site
iAnthus Capital Holdings, Inc. (OTCQX: ITHUF) Chief Executive Officer Hadley Ford has resigned from his position after an investigation by the board’s special committee. The company’s President and Co-founder Randy Maslow has been appointed as the interim CEO effective immediately.
The company formed a special committee to look into allegations made in an online media report that Hadley had misused company funds for his own benefit and that there was a conflict of interest. The committee determined that two of the allegations were substantiated and recommended further action.
According to a company statement, the Special Committee determined that Ford entered into two undisclosed loans (one loan for $100,000 with a related-party and the other for $60,000 with a non-arm’s length party) and those loans created a potential or apparent conflict and should have been disclosed to the board in a timely way.
The Supreme Cannabis Company, Inc. (OTCQX: SPRWF) has hired Beena Goldenberg, the former CEO of Hain-Celestial Canada, as the company’s President and Chief Executive Officer. Ms. Goldenberg succeeds Colin Moore, who as interim President and Chief Executive Officer since January 2020 took significant steps to reduce Supreme’s operating and overhead costs, expand its product offering across all market segments and accelerate its transition into a premium cannabis consumer packaged goods company. She was also appointed to the board.
“I am humbled and excited by this opportunity to help grow a leading cannabis CPG company. Supreme Cannabis’ award-winning premium brands, deep dedication to quality and industry-leading cultivation and production facilities are tremendous advantages for any CPG company, especially one in the cannabis industry, which is now increasingly consumer-driven,” Ms. Goldenberg commented. “I look forward to working with this outstanding team to accelerate the company’s recent progress within the consumer marketplace.”
The holding company known for its predilection towards psychedelics, Orthogonal Thinker, Inc. has closed on a total of $6 million in a series of oversubscribed seed rounds, which included investments from lead investors such as Republic Labs and Pay It Forward, along with other notable investors.
David Nikzad, Founder, Orthogonal Thinker said, The core focus of this fundraise is devoted to our wholly-owned subsidiary, EI. Ventures, and establishing its foundations as a leading player in the emerging psychedelic market. This is just the start of what’s to come for the market and EI. The next steps for EI will be devoted to our GMP and lab efforts.”
Cannabis investors are still writing checks despite the ongoing bear market for the industry. Although it does seem like the bulk of that money is shifting towards software brands. The latest company to announce a successful fundraising campaign is Simplifya.
This company closed on $1.5 million of its currently over-subscribed bridge round and the company said it expects to close an additional $1 million as part of the expanded round in the next 30-45 days. Simplifya is a provider of regulatory and operational compliance software for the cannabis industry.
In Other News
Cresco Labs Inc. (OTCQX: CRLBF) reported financial results for the fourth quarter ending December 31, 2019. Fourth-quarter 2019, revenue of $41.4 million, up 144% year-over-year and 14% quarter-over-quarter. The increase in revenue was driven by expansion into new markets and continued growth in the states where the Company operates. Fourth-quarter 2019 revenue increased 14% compared to $36.2 million for the third quarter of 2019, primarily driven by higher revenue generated in Pennsylvania, Illinois and Arizona as well as the additional revenue from its Valley Ag and HHH acquisitions which are included in the Company’s results starting in October 2019. Total 2019 revenue was $128.5 million, up 197% year-over-year.
Total expenses for the fourth quarter of 2019 were $33.5 million, compared to $18.6 million for the prior-year period. Total expenses in the fourth quarter of 2019 included $7.2 million in acquisition and other non-core costs, $4.2 million in expenses related to share-based incentive compensation and $1.4 million of depreciation and amortization. The balance of the increase represents investments made in talent and operational infrastructure to support the Company’s continued revenue growth. Net loss for the fourth quarter for 2019 was $45.2 million, compared to a net loss of $4.4 million for the prior-year period. Current period net loss included income tax expense of $4.3 million.