The Daily Hit: December 4, 2019

Its time for your Daily Hit of cannabis financial news for December 4th, 2019. 

On the Site

Banks Cleared For SARS Reports With Hemp Farmers

On Tuesday, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the Financial Crimes Enforcement Network (FinCEN), and the Office of the Comptroller of the Currency issued a statement clarifying banking rules around hemp customers.

The key takeaway from the statement is that banks no longer need to file the onerous Suspicious Activity Report, known as SARS for hemp farmers. The statement said, “Because hemp is no longer a Schedule I controlled substance under the Controlled Substances Act, banks are not required to file a Suspicious Activity Report (SAR) on customers solely because they are engaged in the growth or cultivation of hemp in accordance with applicable laws and regulations. For hemp-related customers, banks are expected to follow standard SAR procedures, and file a SAR if indicia of suspicious activity warrants.”

Sunniva Racking Up Default Notices As Turmoil Continues

Sunniva Inc.  (CSE: SNN) (OTCQB: SNNVF) has been named in a lawsuit, along with its wholly-owned subsidiary, 1167025 B.C. Ltd., co in connection with loans made by Matrix Venture Capital Management Inc.  to Sunniva on August 28, 2019 and October 11, 2019, respectively, in the aggregate amount of $7 million. According to the company’s November 26 finance statement, it said that in June 2018, Sunniva, through its subsidiary 116, entered into a $3.4 million mortgage to finance the purchase of land for the greenhouse facility in Okanagan Falls, British Columbia. “The mortgage is repayable on October 31, 2019, and has an interest rate of 5% per annum. This balance has been reclassified to Liabilities associated with assets held-for-sale (note 7). The Company has repaid $400,000 as of September 30, 2019, but is currently in default on the remaining balance.

Separately, in the company’s lastest MD&A dated November 26, Sunniva said that on November 25, 2019, it received a 30-day notice of termination and a notice of default from SPCL “for items related to payment of outstanding balances and failure to meet certain conditions of the Build to Suit Lease. In addition, the Company received a notice of default from a promissory note holder for not applying a certain portion of the note proceeds to agreed-upon outstanding amounts.

Additionally, the company has had many of its executives resign for various reasons, and the stock fell another 13% to lately trade at 23 cents. The 52-week high was $4.30.

In Other News

Canopy Growth Launches CBD Consumer Line in the U.S.

Canopy Growth has quietly launched its hemp-derived CBD brand, First & Free, in the 31 U.S. states that allow such sales. Company spokesperson Jordan Sinclair says early signs are “positive” with some orders successfully placed.

Exactus, Inc. Announces Closing of $2 Million Convertible Note

Extractus, Inc., industrial hemp farmer and manufacturer of hemp-derived products, announced today the closing of the initial tranche of a $2 million senior secured convertible note financing from a single institutional investor. The total net proceeds from the note are approximately $1.94 million, after deducting the initial purchaser’s discount, commissions and estimated offering expenses. The note consists of three tranches where the initial financing consists of the issuance of a note in the principal amount of $833,333.33, to be followed by a $277,777.77 tranche upon the filing of an S-1 and concludes with the remaining $833,333.33 to be distributed pending the S-1 becoming effective with 25% warrant coverage priced at 105% of the closing price on the subsequent closings. 


Kaitlin Domangue

Kaitlin is a cannabis reporter for the Green Market Report, covering every angle of the industry. She also works directly with cannabis brands as a content marketer.

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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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