It’s time for your Daily Hit of cannabis financial news for March 11, 2019.
On The Site
Harvest Health & Recreation, Inc. (CSE: HARV, OTCQX: HRVSF) has entered into an agreement to buy VeranoHoldings, LLC in an all-stock deal valued at approximately USD $850 million based on a share price of C$8.79. Harvest Health stock jumped over 15% on the news to lately trade at C$9.56. The deal is expected to close in the first half of 2019 and comes with a $20 million termination fee.
If this deal is completed, the combined company will be one of the largest multi-state operators (MSO’s) in the U.S., as measured by licenses held and facilities permitted. Harvest will hold licenses that will allow it to operate up to 200 facilities in 16 states and territories across the country, including 123 retail dispensaries. Harvest Health was founded in 2011 and currently owns licenses for more than 140 facilities in the U.S. It is often ranked as the third largest cultivator.
Headset Pricing Report
There’s an old saying that ‘all politics is local’ and it turns out the same goes for marijuana prices. A new report from cannabis data company Headset looked at pricing trends from four key states that have fully legalized cannabis including two states with mature sales data and two fairly new states.
The study examines average item prices throughout 2018 and for the first two months of 2019. The sales data comes from customers who participate in store loyalty programs, as well as the $4.5 billion in transactions that Headset tracks.
The general rule of thumb is that California prices are high by all measurements and Washington has the lowest prices in the country. However, that isn’t the end of the story. California’s adult use sales are fairly young and with the changes in regulations last summer, the market changed dramatically. The report notes, “You might think Colorado’s vertical integration would drive the price down…but it seems to actually keep prices higher.” Various taxes within each state and the age group of consumers also affects the data for prices paid.
SLANG Worldwide Inc. (CNSX: SLNG) is heading to Puerto Rico. Yesterday, the company announced that it has entered into a strategic partnership with Southern Development Holdings (SDH) to sell its branded products to medical cannabis patients in Puerto Rico. As part of the partnership, SDH has been granted an exclusive license to sell SLANG branded products in the province.
In Other News
Zynerba (ZYNE) reported a net loss for the fourth quarter of 2018 of $7.8 million with a basic and diluted net loss per share of $(0.44). That beat analyst estimates by $0.21 cents. Research and development expenses for the fourth quarter were $4.9 million, including stock-based compensation of $0.8 million. General and administrative expenses for the fourth quarter were $3.3 million, including stock-based compensation expense of $0.8 million.
The Supreme Cannabis Company, Inc. (TSX: FIRE) (OTCQX: SPRWF) signed a letter of intent with Malta Enterprises, the economic development agency of Malta. “The LOI is the first step of Supreme Cannabis’ application for a Cannabis Production License in Malta. Such License would allow the Company to produce and process cannabis for medical use within Malta, one of Europe’s principal commercial entry points, and to export cannabis for medical use to certain international markets. If approved, Supreme Cannabis intends to produce products containing EU GMP quality cannabis oil and pursue regulated medical cannabis distribution opportunities in the European Union.”
“The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) (TGODF) has entered into a multi-year extraction services contract with Valens GroWorks Corp. (CSE: VGW) (OTC: VGWCF). “Valens is a licenced provider of cannabis products and services specializing in various proprietary extraction, distillation, cannabinoid isolation and purification technologies. Partnering with Valens will accelerate TGOD’s Canadian hemp strategy and allow for early market entry of TGOD’s organic hemp-derived CBD product lines within the coming months.”
Helix TCS, Inc. (OTCQB: HLIX) through its leading seed to sale and cannabis point of sale subsidiary, BioTrackTHC, has been awarded a 2-year contract extension with the State of Delaware to continue providing the state’s medical cannabis traceability system through April 30, 2021. BioTrackTHC was awarded the Delaware traceability contract in May of 2017 and currently operates 9 government cannabis tracking systems across 7 states, Puerto Rico, and the city of Arcata, California.