It’s time for your Daily Hit of cannabis financial news for May 13, 2019.
On The Site
Acreage Holdings Inc. (ACRG.U) (ACRGF) announced on Monday that it was carving off its real estate assets and selling them to a REIT called GreenAcreage Real Estate Corp. or GARE. GARE will purchase the assets and then lease them back to Acreage Holdings.
The arrangement is described as “arms length” transaction, which suggests a separation of parties, yet the REIT will be managed by GreenAcreage Management LLC, which Acreage Holdings owns a 20% interest in and CEO Kevin Murphy is also invested in. GARE is also described as remaining “independent” from Acreage, yet the management company has Acreage ownership involved.
MariMed Inc. (OTCQB: MRMD) reported that in the first quarter ending March 31, 2019, revenues grew 69% to $3.5 million versus last year’s $2.1 million for the same time period. The company trimmed its net losses for the quarter to $23,211, a 99% improvement over the $1.9 million loss for the first quarter of 2018.
MariMed delivered a breakeven quarter on a per share basis versus the $.01 per share loss for the same period in 2018. Gross profits grew 90% to $2.2 million vs. $1.2 million for the first quarter of 2018 compared to the same period in 2018.
In Other News
Helix TCS, Inc. (OTCQB: HLIX) announced that it has received a receipt from the British Columbia Securities Commission for the filing of its preliminary non-offering long form prospectus dated May 8, 2019. Listing of the shares will be subject to the Company fulfilling all the listing requirements of the CSE, including the receipt by the CSE of all final documentation and the company filing a final prospectus with the Commission.
“We are excited at the prospect of listing on the Canadian Securities Exchange in 2019,” Executive Chairman and CEO Zachary L. Venegas stated. “We believe the CSE listing will not only benefit our current and prospective Canadian-based investors but will also afford our existing investors, wherever they are located, increased liquidity by being dual listed on a Canadian stock exchange in addition to the OTCQB market.”
Vitalibis, Inc. (OTCQB: VCBD), a technology-based formulator of premium hemp-based cannabidiol (CBD) wellness products, reported results for its first quarter ended March 31, 2019.
First Quarter 2019 Financial Results. Realized first commercial revenue in the first quarter of 2019, generating $140 thousand in revenue, primarily derived from the soft-launch of several Vitalibis products, as compared to no revenues in the first quarter of 2018. Gross profit in the first quarter of 2019 was $51 thousand, representing a 37% gross profit margin, primarily driven by a sales mix weighted towards lower-margin CBD powder sales. The company expects gross margins to steadily improve over time as consumer products, which carry an approximate 80% gross margin profile, become an increasingly large portion of the sales mix.
Cash used in operations in the first quarter of 2019 totaled $286 thousand as a result of the Company’s capital-light, low-overhead operating model. Cash and cash equivalents as of March 31, 2019, were $60 thousand compared to $171 thousand as of December 31, 2018. Subsequent to the closing of the first quarter of 2019, the Company raised $200 thousand via a convertible debenture.
Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) reported its first quarter 2019 financial results for the period ended March 31, 2019. Aleafia Health revenue was $1.5 million, compared to $0.1 million in Q1 2018, a 1,723 percent year-over-year increase. The company experienced a net loss of $20.2 million, or a $7 million net loss, excluding $13.2 million in one-time, non-cash payments resulting from the closing of the Emblem acquisition. The Company has $36.8 million cash on hand on March 31, 2019, compared to $26.4 million at December 31, 2018. Current assets, including cash, totaled $61 million at March 31, 2019, compared to $29.2 million at December 31, 2018.
Innovative Properties Inc. d/b/a Nabis Holdings (CSE: NAB) (OTC: INNPF) has signed a definitive agreement to purchase certain assets from PDT Technologies LLC, including extraction and production equipment and rights to lease its current production facility in Port Townsend, WA. In addition, the Company will purchase the exclusive licensing rights throughout the state of Washington to Chong’s Choice brand products, one of the leading and most recognizable brands in the cannabis space.
The Chong’s Choice brand, as one-half of the legendary comedy duo Cheech & Chong, is a well-known brand in the cannabis space. The company expects that the rights it will acquire to the Chong’s Choice brand will provide it with new opportunities to forge licensing relationships with state-licensed Washington processors