It’s time for your Daily Hit of cannabis financial news for March 11, 2020.
On The Site
TerrAscend Corp. (CSE:TER)(OTCQX: TRSSF) announced that its wholly-owned subsidiary TerrAscend Canada Inc. has entered into a loan financing arrangement with Canopy Growth Corporation (TSX:WEED)(NYSE:CGC) in the amount of C$80.5 million in the form of a secured debenture. In connection with the funding of the Loan, TerrAscend has issued 17,808,975 common share purchase warrants to Canopy Growth.
The net proceeds are expected to be used by TerrAscend Canada for general corporate purposes and the funding of its Canadian operations, its Arise Bioscience U.S. hemp division, international expansion and the repayment of indebtedness. The company can’t use any of the money in the U.S.
Harvest Health & Recreation Inc. (CSE: HARV)(OTCQX: HRVSF) announced the execution of a definitive merger agreement of the previously announced acquisition of Interurban Capital Group, Inc. (ICG), the resignation of Jason Vedadi from his role as Executive Chairman of the Board of Directors. Current independent Board member Mark Barnard will assume duties as Chairman of the Board. He brings significant leadership experience gained through executive roles with Diageo PLC and Unilever, among others.
Harvest has said it would acquire ICG for consideration of approximately $85.8 million payable by issuance of 309,452 multiple voting shares, assumption of approximately $19.1 million of debt convertible into 205,594 multiple voting shares and payment of an additional $9.3 million upon exercise of a call option agreement to acquire controlling interests in five Washington cannabis dispensaries or alternatively $12.4 million to acquire substantially all of the assets of these dispensaries. ICG’s assets include direct and indirect licenses and rights to acquire entities with licenses in California, Iowa, and Washington. In addition, ICG is a service provider to these entities.
In the bad old days before legalization, cannabis consumers would buy from dealers and there was no price bargaining. The dealer gave you the price and the amount and you took it, no questions asked. At the beginning of legalization, consumers were just so jazzed to be able to buy weed in a store that they didn’t care how much they paid for it. Fast forward to a maturing retail sector and discounts are the name of the game.
A new report from the cannabis analytics firm Headset found that stiff competition for purchases in dispensaries has led to lower prices. “The raw dollar amount of discounts has climbed very steadily since the legalization wave began, indicating that they’re an integral part of the industry,” read the report. The study found that each year, purchase discounts are growing.
In Other News
Innovative Industrial Properties, Inc. (NYSE:IIPR) closed on the acquisition of a property in Wimauma, Florida, which comprises approximately 373,000 square feet of industrial and greenhouse space, from an affiliate of Parallel, a leading multi-state cannabis company with operations in Florida, Massachusetts, Nevada, and Texas. Parallel is the corporate parent company to Surterra Wellness, a market leader and one of the original licensed vertical operators in Florida, with a rapidly growing footprint that includes 39 retail dispensaries across the state and multiple industrial-scale cultivations, production and research facilities.
Zenabis Global Inc. (TSX: ZENA) announced that it has reduced the workforce at its Vancouver, B.C. head office by 33% its overall workforce by 22%. This restructuring is expected to have no impact on customer service, production, product development, 2.0 initiatives, retail support or overall operations and is the result of increasing efficiencies.
Storz & Bickel, a Canopy Growth subsidiary and leading cannabis vape manufacturer is announcing a new web-based, Bluetooth-enabled app giving iPhone/i0S users a workaround for controlling their vape remotely; it’s the first solution of its kind from any cannabis vape manufacturer in response to Apple’s controversial decision to remove all vape apps from its platform last November.