It’s time for your Daily Hit of cannabis financial news for March 31, 2021.
On the Site
On March 30, 2021, late in the evening, the New York legislature passed the landmark MRTA (Marijuana Regulation and Taxation Act) bill legalizing marijuana in the Empire state. Through the hard work of people impacted by prohibition, advocates and champion lawmakers, like Assembly Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger, New York has taken action to chip away the remnants of the war on drugs.
Cannabis accessories e-commerce company Greenlane Holdings, Inc. (Nasdaq: GNLN) reported financial results and announced a merger with KushCo sending the stock higher in early trading. Greenlane stock was up over 17% on news of the merger as the company missed revenue estimates for the fourth-quarter ending in December.
Net sales grew approximately 50.5% to $7.8 million, or 21.4% of total net sales in the fourth quarter versus $5.2 million or 13.8% of net sales in the fourth quarter of 2019. Core revenue grew 11.3% to $33.9 million in the quarter versus $30.5 million for the same time period in 2019. Greenlane missed the average analyst estimate which was for revenue of $36 million according to Yahoo Finance. Core revenue is defined as all non-nicotine revenue and Greenlane Brand revenue is inclusive of Eyce figures. The net loss for the quarter grew 8.9% to $10.8 million.
Earlier this week, the Chicago Tribune ran a story alleging that cannabis company Green Thumb Industries Inc. (OTCQX: GTBIF) was under federal investigation for possible pay-to-play violations during its push for coveted state licenses. The article cited an unnamed source. The story claimed that investigators were looking into campaign donations as the company was seeking licenses in Illinois. No charges have been filed in the investigation according to the story. The stock fell over 11% in trading on Tuesday as the article made the rounds. In a statement, Green Thumb said it possesses absolutely no evidence to corroborate claims that there is an open investigation by federal authorities as alleged in an article by the Chicago Tribune under a misleading headline published on March 29, 2021.
MediPharm Labs Corp. (OTCQX: MEDIF) announced its financial results for the three and twelve months ending December 31, 2020. Revenue increased 22% sequentially in the fourth quarter to $6.1 million versus $4.9 million but was substantially lower than 2019’s fourth-quarter revenue of $32 million.
The net loss before tax in the quarter was $30.9 million and was largely attributed to a $10.7 million write-down of inventory to its net realizable value, $1.6 million write-down of non-current deposits, $5.9 million incremental depreciation expense of fixed assets, a $2 million impairment on fixed assets and a $1.4 million restructuring expense.
In Other News
Verano Holdings Corp. (CSE: VRNO) has entered into a definitive agreement to acquire The Healing Center, LLC, adding three highly productive, award-winning dispensaries in the Pittsburgh-metro area. On closing, the acquisition will enhance Verano’s presence in Pennsylvania and will further the company’s position as a U.S. market leader. The deal is valued at $110 million which is expected to be satisfied by the payment of $55,150,000 in cash and $55,150,000 in a combination of Class A subordinate voting shares and Class B proportionate voting shares of Verano.
“After going public last month, Pennsylvania quickly became a priority for targeted expansion, as it will be integral to our future growth plan,” said George Archos, Co-Founder and CEO of Verano. “Upon completion of this deal, pending all required approvals, we will measurably increase our retail footprint, with the addition of three award-winning dispensaries, in a rapidly growing medical market that has signaled it could potentially transition to adult-use. We are fortunate to add a very talented and dedicated local management team as well. They will play a pivotal role in our success in Pennsylvania.”