The Daily Hit: June 5, 2018

It’s time for your Daily Hit of cannabis financial news for June 5, 2018.

On The Site

CannTrust Holdings Inc. 

Medical cannabis producer CannTrust Holdings Inc. (TRST) announced today that is has closed its previously announced short form prospectus offering, on a bought deal basis. The announcement comes in the wake of a very strong fourth quarter and full-year financial report in which the company’s profits exceeded its losses and annual revenue rose from C$4.3 million to C$20.6 million.

Including the full exercise of the over-allotment option, CannTrust sold a total of 11,155,000 units of the company, at a price of C$9.00 per unit, for a total exceeding C$100 million. A unit of the company consists of one common share and one half of one common share purchase warrant. A common share purchase warrant entitles the holder to acquire one common share of the company, at a price of C$12 per share, until June 5, 2020.

The Green Organic Dutchman Ltd.

The Green Organic Dutchman Ltd. (TGODF) entered into an engagement letter with Canaccord Genuity Corp. on behalf of a syndicate of underwriters including PI Financial Corp. and Mackie Research Capital Corporation to purchase 3,910,000 special warrants of the company, on an bought deal basis. The price per special warrant is $6.40 generating an aggregate gross proceed of approximately C$25 million. The offering is expected to happen on June 26, 2018.

The warrants will be made up of one common share and one-half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at an exercise price of c$9.50 for a period of 36 months from the date of closing. The stock was lately trading at C$6.99 on the Toronto Exchange, a sharp increase from its initial pricing of C$3.65 when the company went public in April.

The State of Legal Marijuana Markets 6th Edition

A new report from Arcview Market Research and BDS Analytics says that the medical marijuana market will drop to only 41% in 2018 as the California, Nevada and Canada adult-use markets explode. Medical marijuana accounted for 71% of the legal market in 2017, making the pace of the decline dramatic. The State of Legal Marijuana Markets 6th Edition also predicts that the medical component of worldwide legal sales will plunge to just 35% by 2022 due to the growth of recreational sales in those three markets, along with new states like Maine and Massachusetts.

Consumer spending in cannabis markets is expected to triple to $32 billion by 2022 for a 27.5 compound annual growth rate (CAGR). The report notes that U.S. sales alone will grow to $23.4 billion by 2022. It seems Americans are the most excited about adult use marijuana as the paper says that it is largely a U.S. phenomenon.  The rest of the world appears to be content to stick with just medical marijuana.

 In Other News

Neptune Technologie & Bioresources 

Neptune reported its earnings after the market close. The company transitioned to a new fiscal year-end as at March 31, 2017. As a result, the comparative periods cover the four and thirteen-month periods ended March 31, 2017, and may not be directly comparable to the figures of the 2018 fiscal year.

Fourth Quarter Financial Results

  • Revenues were $7.0 million for the three-month period ended March 31, 2018, versus $11.8 million for the four-month period ended March 31, 2017.
  • Net loss was $4.8 million for the current quarter, versus a net income of $0.3 million for the four-month period ended March 31, 2017.
  • Non-IFRS operating loss1 was $1.8 million for the current quarter, compared to an Adjusted EBITDA1 of $0.9 million for the four-month period ended March 31, 2017.

The fourth quarter Non-IFRS operating loss1 increase was mainly attributable to the sales and gross margin decrease after the transaction concluded with Aker BioMarine. The fourth quarter net loss includes derecognition of tax credits of $1.9 million, an income taxes recovery of $1.7 million and an impairment loss on inventories of $0.7 million.

Nutritional High International Inc.

Nutritional High International Inc.  (SPLIF) has agreed to the extension of its previously announced non-binding letter of intent (“LOI”) to acquire a 75% interest in Green Therapeutics LLC, one of the premier innovators and established producer/processors within the cannabis space in the State of Nevada. As per the terms of the extension, the date of termination of the LOI has been extended to June 15th, 2018.

“We remain to consummate this acquisition and are excited about this business venture with Green Therapeutics, as we view this as an opportunity to establish ourselves in the rapidly growing cannabis market of Nevada, and add some key talent to our management team,” said Jim Frazier, CEO of Nutritional High. “Nevada’s cannabis market has seen tremendous growth in the past year and we are excited to introduce Nutritional High’s FLI products to the Nevada market and to further expand Nutritional High’s and our partner’s brands throughout the US.”

Green Spirit Industries Inc.

Green Spirit Industries Inc. (GSRX) announced that it has been issued the requisite establishment license by the Department of Health of Puerto Rico to commence operations of the Company’s second medicinal cannabis dispensary, which is located in Carolina, Puerto Rico.

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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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