It’s time for your daily hit of cannabis financial news for May 16, 2018:
On The Site
NY Cannabis Taxes
On May 15, 2018, New York City Comptroller Scott Stringer published a report estimating the potential size of the state’s legal cannabis market and how much tax revenue it would generate for both the city and the state. According to the report, the New York state cannabis market could see up to $3.1 billion in annual sales, with up to $1.1 billion being generated in New York City alone. In terms of tax revenue, legal cannabis could generate up to $436 million for New York state and $336 for New York City.
The U.S.-based medical marijuana company MariMed Inc. (MRMD) stock jumped 13% after it reported its first-quarter financial results for 2018 with revenues increasing 81% to $2.08 million compared to $1.15 million first quarter of 2017. The company attributed the increase to the expanding operations of MariMed’s medical marijuana clients from real estate revenue, management fees and licensing fees.
Unfortunately, the company delivered a net loss of $1.83 million in the quarter versus net income of $0.11 million for the quarter last year. MariMed said that the loss was blamed on non-cash equity compensation and debt settlements in 2018 that it said would have no impact on operations/cash flow. MariMed happily reported $251,166 of operating income in first quarter of 2018, an increase from $228,552 for the same time period in 2017.
Denver-based hydroponic retailer GrowGeneration (GRWG) reported that its revenue for the first quarter of 2018 increased 70% to $4.4 million versus $2.6 million for the 1st quarter of 2017. Gross profits rose 75% to approximately $1.2 million compared to approximately $.68 million for the same time period. Still, the company delivered a net loss of $953,430 versus last year’s net loss of $283,309. The stock fell over 7% to $4.70 on the earnings announcement.
After a rocky start at the beginning of the year, the North American Marijuana Index is starting to show some signs of a recovery. In the month of April, the North American Index gained 3%, led primarily by the huge gains in the U.S. market. The U.S. Marijuana Index gained approximately 19% in April; six companies on the index gained 20% or more and another ten companies gained more than 10%. The average trading volume on the U.S. Index also increased by 77%, compared to the previous month.
In Other News
Merida Capital Partners
Merida Capital Partners a private equity fund targeting fundamental growth drivers underpinning the rapid development of the cannabis industry announced it has crossed $50MM in assets under management (AUM) and closed transactions in nine companies in its second Fund. With the full deployment of Merida’s first tranche of Fund II and the opening of the firm’s second investment tranche, Merida Fund II will continue its focus on high-conviction investments in leading companies that have crossed the ‘fragmentation gap’ yet need strategic capital to profoundly accelerate their respective growth curves. Merida will also focus on businesses implementing capex-lite models in the traditionally capital-intensive verticals of cultivation, dispensing, and life sciences.
Invictus MD Strategies Corp.
Invictus MD Strategies Corp. announced that it has entered into a binding letter of intent for an option to acquire 100% of the outstanding shares of an applicant under the Access to Cannabis for Medical Purposes Regulations from OptionCo current shareholders. OptionCo has two properties. One is located in Delta, British Columbia (“Delta Facility”) and is a state of the art, pharmaceutical grade, cannabis production and research facility, which has been submitted to Health Canada for final review and approval under the ACMPR. The Company expects to receive its cultivation license for the Delta Facility in Q2 of 2018. The other property is located in Mission, British Columbia