The Daily Hit is a recap of the top business stories from the cannabis industry for March 21, 2022.
On The Site
At the beginning of March, a complaint was filed in the New York County Supreme Court and the Southern District of Florida. Then almost immediately the court documents were heavily redacted. It seems some investors of privately-owned Surterra Wellness, now known as Parallel are pretty angry about what happened to their investment dollars. While some portions remain unclear, there is still a lot that can be gleaned from the complaint and allegations. Both cases suggest that Wrigley loaded up Parallel with excessive debt and misrepresented the health of the cannabis company. The complaint alleges that his goal was to get the company taken public through the Ceres Acquisition Corp SPAC and then exiting with a profit. Read more here.
Akerna (Nasdaq: KERN) reported its unaudited financial results for the quarter and year ended December 31, 2021. In the fourth quarter, Akerna delivered total revenue of $6.6 million, up 61% year-over-year and an increase sequentially from the third quarter’s revenue of $5.1 million. The loss from operations was $20.1 million, an increase of $9.9 million over last year’s fourth quarter. The net loss was $19.5 million an increase of $7.2 million over last year and a big jump from the third quarter’s net loss of $1.3 million. For the full year, total revenue was $20.7 million, up 49% year-over-year. The loss from operations was $33.4 million, up $6.6 million year-over-year and the net loss was $33.6 million, up $6.7 million year-over-year. Read more here.
Only a couple of weeks into the Covid lockdown of March 2020, cannabis dispensaries were deemed “essential”, which meant that they were allowed to continue selling medical and/or recreational products in states where those transactions were already legal. As consumers rushed to grocery stores to stock up on toilet paper and disinfectants, many made detours by their local dispensaries as well, at least according to data presented in a March 16, 2020 Headset report that showed a noticeable boost in sales from the week prior. Flowhub’s sales numbers also showed a sharp increase following the designation of Covid as a ”pandemic”, with a second spike occurring after many statewide mask mandates were lifted in 2021. Read more here.
Nova Cannabis Inc. (TSX: NOVC) reported its audited annual consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2021. Nova reported that fourth-quarter sales increased 175.9% to $47.6 million over last year and was a 23.2% increase over the third quarter of 2021. The company attributed the sales growth to the continued conversion of legacy stores to the Value Buds banner throughout 2021 and the opening of new stores, particularly in Ontario. Read more here.
In Other News
Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) has appointed Mike Gorenstein as Chairman, President, and Chief Executive Officer, effective March 21, 2022, in connection with Kurt Schmidt’s retirement. Gorenstein previously served as Chairman, President and Chief Executive Officer of Cronos until September 2020, when he transitioned to the Executive Chairman role. In addition, Gorenstein is a Co-Founder and passive Member of Gotham Green Partners. Read more here.