It’s time for your Daily Hit of cannabis financial news for August 17, 2021.
On the Site
Tilray, Inc. (NASDAQ: TLRY) has bought the majority of the outstanding senior secured convertible notes of MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) that were originally held by certain funds affiliated with Gotham Green Partners, LLC and other funds. The transaction is valued at $165.8 million.
Tilray said the purchase sets the company up to own a significant equity position in MedMen through conversion of the Notes and exercise of associated warrants following U.S. cannabis legalization (or Tilray’s waiver of such condition). In connection with the sale of the Notes, MedMen and GGP amended the restrictive covenants and extended the debt maturity to 2028 to provide MedMen the flexibility to execute on its growth priorities and explore additional strategic opportunities.
Following the close of the market on Monday, Ayr Wellness Inc. (OTCQX: AYRWF) reported financial results for the three months ending June 30, 2021, with revenue rising 222% to $91.3 million. This was a 56% increase sequentially. Ayr is raising its revenue guidance for 2022 revenue to $800 million, up from $725 million, and is reiterating guidance for 2022 Adjusted EBITDA of $300 million reflecting substantial investments in growth. Ayr’s net losses increased to $24.9 million over last year’s $5.4 million and the first-quarter net loss of $8.4 million. The company attributed the increase in losses to non-cash, one-time expenses, and non-operating adjustments totaling $52.3 million.
After the market closed on Monday, Lowell Farms Inc. (CSE: LOWL; OTCQX: LOWLF) announced revenue and operating results for the second quarter ending June 30, 2021. Lowell Farms generated revenue for the quarter of $15.2 million; an increase of 53% over last year and an increase of 37% over the first quarter. Lowell also reported a net income of $731,000 versus a net loss of $8.8 million and $6.7 million in Q2 2020 and Q1 2021, respectively. The company noted that the current quarter included proceeds from insurance claims of $2.6 million which was associated with plant stress that happened in 2020.
Field Trip Health Ltd. (Nasdaq: FTRP) reported its fiscal first-quarter 2022 results for the three months ended June 30, 2021. Field Trip said it earned patient services revenues of $867,400 from its Toronto, New York, Santa Monica, Chicago, Atlanta, and Houston clinics, a 65% increase over the fourth fiscal quarter patient services revenues of $526,435. The net loss for the first fiscal quarter of 2022 of $12,530,395 was primarily due to total operating costs of $12,310,930, of which $1,599,451 related to non-cash share-based compensation and depreciation and amortization excluding leaseholds.
After the market closed on Monday, Glass House Brands Inc. (OTC: GLASF) (OTC: GHBWF)reported financial results for its second quarter ending June 30, 2021. Glass House‘s revenue increased 62% for the quarter to $18.7 million from last year’s $11.6 million. Glass House said the increase in revenue was primarily due to an increase in cannabis production from its second greenhouse cultivation facility, which began operations in the first quarter of 2020. The net loss increased to $4.7 million from last year’s $3.6 million.
As the cannabis industry continues to demand respect from the rest of the corporate world, Inc. Magazine has stepped forward to acknowledge growing companies. Inc. just published its list of 5,000 of the fastest-growing private companies in the U.S.
MATTIO Communications, one of the longest-running and largest cannabis marketing services firms, ranked No. 190 on its annual Inc. 5000 list, the most prestigious ranking of the nation’s fastest-growing private companies. In addition to Mattio making the list, cannabis online marketplace LeafLink also clocked in at number 204 after growing 2,144%. LeafLink. LeafLink is currently logging $3 Billion of annualized Gross Merchandise Value (GMV).
In Other News
Earlier this week, Trulieve’s (TCNNF) CEO Kim Rivers’ husband J.T. Burnette was found guilty on charges of extortion, honest services mail fraud, a Travel Act violation and lying to the government according to the Tallahassee Democrat. The paper said he faces maximum penalties of 20 years in prison on each of the extortion and fraud counts and five years on each Travel Act and making false statements count. It was reported that Burnette is the third major political power player to go down as part of the FBI’s “Operation Capital Currency,” a two-year undercover investigation into pay-to-play in the Capital City. Former Mayor and City Commissioner Scott Maddox, along with his girlfriend and longtime business partner, Paige Carter-Smith, pleaded guilty in the probe in 2019. During the trial, prosecutors played a tape of a secretly recorded 2016 conversation in which Burnette boasted about working with Trulieve major shareholder Harry Beshears in 2014 to erect legal barriers for certain applicants looking to get into the state’s fledgling medical marijuana business.
TILT Holdings Inc. (OTCQX: TLLTF) upgraded its public listing to the NEO Exchange. Following a voluntary delisting from the Canadian Securities Exchange, TILT is now available for trading on NEO under the symbol TILT.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) is buying Blair Wellness, LLC, a Baltimore, Maryland medical cannabis dispensary. The Transaction is expected to close in Q4 of 2021. The Transaction implies a 1.8x 2021 revenue multiple, satisfied through the payment of cash and a twenty-four (24) month promissory note. The Transaction will be completed on a cash-free, debt-free basis with a mutually agreed upon normalized target level of working capital.