It’s time for your daily hit of cannabis financial news for May 28th, 2020.
On the Site
Canopy River Tightens Belt, Cuts Employees
Canopy Rivers Inc. (OTC: CNPOF) is laying off employees and cutting back on spending as the company focuses on positive cash flow. The venture capital firm that specializes in cannabis companies said that it is streamlining its operations to preserve its cash on hand.
The company said in a statement that it is making the following changes:
- A material reduction in the Company’s operating cash outflows, including a reduction in headcount, directors’ compensation, marketing expenses, and general corporate expenses of a minimum of 35% from the Company’s fiscal 2020 operating cash outflows on a normalized basis;
- A focus on generating positive cash flow from operations for fiscal 2021 (year ended March 31, 2021); and
- A focus on maximizing returns on existing assets.
MedMen Says COVID Has Hurt Sales
On the company’s earnings conference call, interim CEO Tom Lynch said, “Unfortunately, COVID has impacted our sales since the end of March; we’re down in April overall, but have seen a steady increase since. While we’re still not back to our normal levels, pre-COVID, particularly in California, we’re optimistic about our ability to recapture traffic as soon as stay at home orders are lifted.”
MedMen also noted that its Nevada location had suffered saying, “We saw a decrease in overall sales in this market, particularly given the impact that the pandemic has had on tourism into Las Vegas, we’re encouraged about the recent decision to open up cannabis retail again, and have already begun to see a steady ramp-up in revenue.”
In Other News
Aurora Completes Acquisition of Reliva, LLC
Canadian cannabis company, Aurora, has completed the acquisition of hemp-derived CBD company, Reliva.
“We are pleased to have closed the Reliva transaction ahead of schedule. The partnership between Aurora and Reliva is expected to create a market leading international cannabinoid platform that we believe can deliver robust revenue and profitable growth,” said Michael Singer, Executive Chairman and Interim CEO of Aurora. “I would like to officially welcome Miguel Martin and his team to Aurora, and look forward to increasing Aurora’s operating scale, international reach, and product and brand diversity while in parallel, we remain focused on delivering Adjusted EBITDA profitability in Canada for the benefit of all shareholders.”
Cresco Labs Announces First Quarter 2020 Results
Multi-state operator Cresco announced a record revenue of $66.4 million in Q1 of 2020. This is a 60% growth over 2019’s Q4. The company also revealed the largest cultivation expansion in their company’s history, adding 6x cultivation space in Illinois and 4x the cultivation space in Pennsylvania. There was a 144% increase year over year from Q1 of 2019 to Q1 of 2020.