It’s time for your Daily Hit of cannabis financial news for July 27, 2020.
On The Site
PotNetwork Holdings, Inc. (OTC PINK:POTN) filed its 2019 Annual Report and reported that its revenues fell 41% to $15 million versus $25.5 million in 2018. The company attributed the drop in revenue to “distribution contraction as a result of the FDA Warning Letter, along with the paring and streamlining of the product lines in mid-2019.”
The company received an FDA warning letter from the U.S. Food and Drug Administration on March 28, 2019, related to the marketing of CBD products by Diamond CBD, a subsidiary of the company. Diamond CBD removed all claims from the website that were referenced in the Warning Letter. Specifically, claims that included references to clinical studies on CBD demonstrating health benefits for patients with certain diseases, including Alzheimer’s and diabetes. Based on those claims, the FDA considered the products to be unapproved new drugs in violation of the FDCA.
The net loss for 2019 was $(3,367,831) versus 2018’s net profit of $242,634 and was attributable to the decrease in gross profit. The gross profit from the sale of all products in 2019 was $4,816,604, a drop of 46% from 2018’s $8,959,433.
MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF) is buying Biome Grow Inc. (CSE:BIO) (CNSX:BIO.CN) for roughly $12,898,727 (all figures in Canadian dollars). Biome is a Canadian-based company with national and international business interests in the cannabis industry. Its wholly-owned subsidiary Highland Grow Inc. is licensed to cultivate, process, and sell cannabis.
The transaction will include $1.5 million in cash and 42,813,985 common shares in the capital of MYM at a price per share of $0.065 and 132,551,040 newly-created non-voting Class A Special Shares of MYM. Biome will become the largest shareholder of MYM.
In Other News
Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) announced the launch of its new U.S. e-commerce website: ShopCanopy.com. ShopCanopy serves as the online home for Canopy Growth’s growing portfolio of U.S. hemp-derived CBD product lines, and a one-stop shop for over 25 product SKUs from brands such as First & Free, This Works, and BioSteel. The site will continue to feature new brands from Canopy Growth, including the highly anticipated launch of Martha Stewart CBD.