It’s time for your Daily Hit of cannabis financial news for June 13, 2019.
On the Site
Cannabis’ Black Market Continues to Thrive Amidst Continued Legalization
Despite legalization continuing to spread, and efforts advocating towards federal legalization of cannabis, the black market in the U.S. for cannabis continues to thrive across the nation.Simply put, despite access and legal product being available, people are still as or more likely to purchase their cannabis from black market sources, with this trend not showing any signs of stopping.
HEXO Corp (TSX:HEXO) ( NYSE-A:HEXO) reported its financial results for the third quarter of the 2019 fiscal year with $15.9 million in gross revenues and a net loss of $7.7 million. The company claims it is on track to reach $400 million in net revenue in 2020 and says it will double net revenue in the fourth fiscal quarter.
Executive Spotlight: Amanda Ostrowitz, Founder & CEO of RegsTechnology
Amanda Ostrowitz is a regulatory attorney and entrepreneur who’s identified a need for a user- friendly, scalable platform to research regulations and laws in the cannabis industry. Amanda founded RegsTechnology and its current product, CannaRegs, as a tool to aid attorneys, business people, and governments with localized tracking of regulatory issues.
Although adult-use cannabis is legal in nine U.S. states, problems persist with companies trying to gain access to capital and essential financial services. Consequently, the industry has devised a series of methods and institutions to circumvent these difficulties; from credit unions to keeping their funds in a giant safe. Another unique way that the cannabis industry has adapted to the issue has been connecting companies with private capital investment through investor forums. A perfect example of this is the MJMicro Conference planned for June 25, 2019, in New York City.
In Other News
Tilray, Inc. (NASDAQ: TLRY) today announced the appointment of Kristina Adamski as Executive Vice President, Corporate Affairs. Adamski will help coordinate the company’s corporate affairs team and help oversee the company’s public relations, corporate social responsibility and government affairs functions. Adamski previously served as Nissan North America’s Vice President of Corporate Communications for more than three years. “We’re thrilled to welcome Kristina to our growing senior leadership team. We’re confident that her vast experience in corporate affairs and global communications will support Tilray’s long term global growth strategy as we expand around the world,” says Brendan Kennedy, CEO, Tilray.
Treehouse Real Estate Investment Trust, Inc. announced that it has closed on nearly a $16 million debt commitment with a large, federally insured and regulated commercial bank. As the company continues to acquire cannabis-use properties, the note commitment will carry a 5.6% interest rate and provides for a revolving facility for future notes. “Treehouse is excited to announce that we have successfully procured federally insured commercial bank financing,” said Brian Kabot, Stable Road Capital Chief Investment Officer and Treehouse Board Member. “The capital relationship allows us to continue executing cannabis-related real estate acquisitions in a scaled, non-dilutive manner that is most accretive to our investors. We are witnessing federally regulated lenders enter the cannabis space and we are thrilled to be at the forefront of those efforts.”
The luxury cannabis brand Canndescent announced that it has signed a definitive agreement to acquire buildings and operating licenses in Nevada, Michigan and Massachusetts for $28.5 million. The acquired building will be retrofitted to support the company’s proprietary cultivation and extraction methods. “Our expansion is a huge win for cannabis consumers as the best of California cannabis will finally be available in other markets,” said Canndescent CEO Adrian Sedlin. “We’re sort of the ‘anti-MSO’ or as I like to call it, we’re an MSBO, Multi-State Brand Operator, having nailed brand and execution first and now rolling up assets with intentionality and understanding.”