It’s time for your Daily Hit of cannabis financial news for December 8, 2020.
On The Site
After the market closed on Monday, MedMen Enterprises Inc.(CSE: MMEN) (OTCQX: MMNFF) released its consolidated financial results for its first-quarter fiscal 2021 ended September 26, 2020. The company delivered a sequential growth of 31% on revenue of $35.6 million, however, it declined from $39.7 million for the same time period in 2019. On a positive note, the net losses were trimmed to $21.9 million from last year’s $33.1 million.
The company noted that the increase in revenue was driven by its California footprint, which was up 34% this quarter over the previous quarter. The flagship stores, such as LAX, Beverly Hills, and West Hollywood were up 56%, 39%, and 31%, respectively, during the quarter. The company only recognized partial revenue for its Evanston IL retail store, because of its agreement divest the license to the third-party. MedMen said its pre-announced revenue number for this quarter of $37 million included a full quarter of the Evanston revenue.
The Congressional Budget Office and the staff of the Joint Committee on Taxation estimate in a new report that H.R. 3884, otherwise known as the MORE Act would increase revenues, on net, by about $13.7 billion over the 2021-2030 period by creating business income, compliance, and occupational taxes; those increases would be partially offset by allowing certain deductions for business expenses associated with trafficking controlled substances.
The MORE Act would also federally decriminalize cannabis (marijuana), expunge the records of people convicted of federal cannabis offenses, and require resentencing of some federal prisoners. As a result, CBO estimates, thousands of current inmates would be released earlier than under current law. In the future, decriminalization also would reduce the number of people in federal prisons and the amount of time federal inmates serve. In total the report said that over the 2021-2030 period, CBO estimates that H.R. 3884 would reduce time served by 73,000 person-years, among existing and future inmates. CBO’s analysis accounts for time served by offenders convicted of cannabis-only crimes and by those convicted of another crime in addition to a cannabis offense.
GrowGeneration Corp. (NASDAQ: GRWG) publicly filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed follow-on public offering raising $125 million on Monday. The offering caused shareholders to sell the stock presumably over concerns of dilution. Shares were falling over 5% in early trading to lately sell at $32.50. The company’s 52-week high is roughly $37, so it hasn’t dropped too much from the year’s high.
In Other News
Southern Harvest Health Corp. announced today that it has filed a preliminary prospectus with the securities regulatory authorities in each of the Canadian provinces of Ontario, British Columbia, Alberta, and Saskatchewan in connection with a proposed initial public offering of its common shares for total gross proceeds of up to $1,500,000. Industrial Alliance Securities Inc. is acting as an agent in connection with the Offering. Southern Harvest is a Canadian medical cannabis company with its operational head office located in Lisbon, Portugal, and its main base of operations located in Santarem District, Portugal. The Company’s mission is to provide European medical patients with unparalleled cannabis experiences through the production, marketing, distribution, and sale of premium quality cannabis products.