The Daily Hit: August 14, 2018

It’s time for your Daily Hit of cannabis financial news for August 14, 2018.

On The Site

A busy day for cannabis earnings:

Cronos Group (CRON) stock popped over two percent in early market trading after the Canadian cannabis reported that its revenue for the second quarter jumped 428% to $3.4 million. It was an increase of $2.8 million over the previous year’s quarter.

The main drivers behind the revenue increase were an expansion in patient onboarding, an increase in average sales price and the strong growth in cannabis oil sales. Second quarter cannabis sales were responsible for 40% of the company’s domestic medical sales.

The company delivered a gross profit of $6.3 million for the quarter versus $1.1 million for the same quarter in 2017. The net income rose to $723,000 for the quarter versus $174,000 for the same quarter last year. Cronos strengthened its balance sheet by raising $100.0 million of gross proceeds through a bought deal offering of common shares in April 2018. bringing the company’s total liquidity to $118.0 million.

GrowGeneration Corp. 

GrowGeneration Corp. (OTCQX: GRWG), one of the largest specialty retail hydroponic and organic gardening stores, selling to both the commercial and home cannabis markets, with currently 18 locations, reported financial results for its 2nd quarter ended June 30, 2018.

The company delivered revenue of $7.15 million, up 74% compared to revenue of $4.1 million for the 2nd quarter of 2017. YTD revenue of $11.5 million, up 72% compared to YTD revenue of $6.7 million for 2017. The company had $17.4 million in cash and cash equivalents at June 30, 2018. As of June 30, 2018, the company had working capital of $24.5 million compared to working capital of $5.6 million at December 31, 2017.

Surna Inc.

Surna Inc. (SRNA) announced operating and financial results for the three and six months ended June 30, 2018.  Surna Inc. designs, engineers and manufactures application-specific environmental control and air sanitation systems for commercial, state- and provincial-regulated indoor cannabis cultivation facilities in the U.S. and Canada.

The company reported that its Q2 2018 revenue was $2,008,000, a decrease of $47,000, or 2%, compared to Q1 2018.  It had Q2 2018 net bookings of $3,867,000, a decrease of $756,000, or 16%, compared to Q1 2018.  The Q2 2018 gross profit margin was 26%, an increase of seven percentage points from its Q1 2018 gross profit margin.

CannTrust Holdings Inc.

CannTrust Holdings Inc. (TRST), a Canadian licensed producer of medical announced financial and operating results for the three and six months ending June 30, 2018. All amounts expressed are in Canadian dollars.

Revenue for the three and six month periods ended June 30, 2018 was $9,050,239 and $16,890,086 respectively, compared to $4,541,378 and $7,574,623 in the comparable 2017 periods. Net Income for the three and six month periods ended June 30, 2018 was $104,905 and $11,547,015respectively, compared to a net income of $754,864 and a net loss of ($23,040) in the comparable 2017 periods.  Earnings for the current period were impacted by approximately $1.5 million of increased costs associated with the ramp up of the Niagara Perpetual Harvest Facility. Earnings per share for the three and six month periods ended June 30, 2018 was $Nil and $0.12 respectively, compared to earnings per share of $0.01 and $Nil in the comparable 2017 periods.

In Other News

The Flowr Group

The Flowr Group (Okanagan) Inc., a cultivator of premium cannabis in Canada, announced today that it has received its sales license from Health Canada.  The license enables Flowr to sell to the Canadian medical and adult-use recreational markets.

Flowr will begin selling to the medical market in the coming weeks and the recreational market when it opens in October.  Flowr recently was selected by the British Columbia Liquor Distribution Branch to supply premium cannabis to province-owned dispensaries and the company is in discussions with other provinces where it believes it can obtain prices commensurate with the quality of the Flowr products.  The company has agreements in place with several major medical cannabis distributors as well.

CLS Holdings USA, Inc.

CLS Holdings USA, Inc. (CLSH)  a diversified cannabis company operating as Cannabis Life Sciences and an integrated cannabis producer and retailer in Nevada through its Oasis Cannabis companies, announced it closed on two oversubscribed funding rounds. A Canadian round of CAN$13.0 million and a U.S. round of $5.75 million.

CannaRoyalty Corp.

CannaRoyalty Corp. (CNNRF) announced the closing of the previously announced sale of CannaRoyalty’s exclusive Canadian license to use and commercialize the pre-roll technology developed by Wagner Dimas to Aurora Cannabis Inc.

CannaRoyalty’s exclusive Canadian license to use and commercialize pre-roll technology developed by Wagner Dimas was valued at $7 million at the time of the execution of the binding term sheet. The Purchase Price is settled in 756,348 Aurora Cannabis common shares1, which have now been issued to the Company. The value of these shares based on the closing price of Aurora Cannabis common shares on August 13, 2018, was approximately C$4.48 million.

Indiva Limited

Indiva Limited (RMKXF) is now able to sell dried cannabis flowers in accordance with Canada’s Access to Cannabis for Medical Purposes Regulation. “We are very excited to be granted our sales license from Health Canada. I would like to thank all of our employees, shareholders, and stakeholders for their tireless efforts and dedication,” said Niel Marotta, CEO, Indiva.

Terra Tech Corp. (TRTC), a vertically integrated cannabis-focused agriculture company,  announced that it has partnered with the Valiente Group, a beverage production company that specializes in cannabis infusion, to produce a line of cannabis-infused beverages under the IVXX brand.

 

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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