It’s time for your Daily hit of cannabis financial news for July 27, 2021.
On the Site
Last week, Red White & Bloom Brands Inc. (OTCQX: RWBYF) delivered its fourth-quarter and full-year results, and today the company has delivered its first-quarter financial results. RWB said that the revenue for the first quarter was $11.8 million which fell from the fourth quarter’s revenue of $15.7 million. The company blamed the decrease as a result of the manner in which it recognizes revenue under IFRS in the state of Michigan for its Platinum Vape branded product sales and a decrease of approximately $1 million due to the strengthening Canadian dollar over the fourth quarter.
Turning Point Brands, Inc. (NYSE: TPB) reported financial results for the second quarter ended June 30, 2021 with sales increasing 16.8% to $122.6 million. The average analyst estimate for revenues was $106 million according to Yahoo Finance. Net income increased by 49.2% to $15.4 million. The diluted EPS was $0.73 and adjusted diluted EPS was $0.84 as compared to $0.49 and $0.66 in the same period one year ago. This beat the Yahoo Finance average analyst estimate of $0.65.
CBD company Bluebird Botanicals has acquired Precision Botanical, a science-driven CBD brand that is committed to providing purity, accuracy, and transparency for all of its CBD products. In addition to the acquisition, Bluebird has received a growth investment from Juggernaut Capital Partners, a lower middle-market private equity firm specializing in buyout and growth investments across the consumer and outsourced healthcare services industries. Bluebird said that Juggernaut’s investment will strengthen the combined company’s financial profile and provide it with the resources to fuel further innovation in the CBD space, accelerate growth online, and assist future expansion into new channels.
In Morningstar’s report from June titled “Buy American Cannabis Stocks Regardless of Federal Legalization”, the research firm believes cannabis investors should buy American and its top picks are Curaleaf (OTC: CURLF) and Green Thumb Industries (OTC: GTBIF). The analyst Kristoffer Inton acknowledges that the market seems to reward Canadian companies since the country is fully legal. However, he believes that American cannabis companies stand to experience revenue growth and rapid margin expansion even if federal legalization doesn’t happen.
Cannabis consumption rose during the height of the COVID crisis as anxiety and lockdowns prompted many to increase the amount consumed. According to a new survey by Stifel, it doesn’t look like consumers are going to return to pre-pandemic levels of use. This is good news for cannabis companies. The survey also determined that cannabis remains a resilient category despite increasing options for discretionary spending as people ease out of COVID restrictions. The research firm surveyed both U.S. and Canadian cannabis consumers and said it reinforced its opinion that the U.S. landscape looks positive while suggesting a mixed outlook for Canada.
In Other News
Poseidon, the leading venture capital firm in the cannabis industry with $190M in assets under management, today announced its first three Poseidon Garden Ventures investments into licensed operator JKL2, cultivation technology company Adaviv, and dispensary technology provider Dispense. As part of the investment, Poseidon will join the Boards of all three companies as directors or observers. “Poseidon Garden Venture’s thesis is to invest in pre-Series A licensed operators and cannabis technology companies founded by proven operators,” said Managing Director, Patrick Rea. “We see immense opportunity at this high-growth stage in the cannabis industry to actively scale these companies, leveraging our network and experiences investing in the cannabis industry since 2013, and position them for exits in today’s dynamic M&A environment.”