The Daily Hit is a recap of the top business stories in the cannabis industry for May 3, 2022.
On the Site
The Scotts Miracle-Gro Company (NYSE: SMG) announced record second-quarter sales in its U.S. Consumer segment driven by continued support from its major retail partners. However, Scotts also noted that for the fiscal second-quarter sales dropped 8% to $1.68 billion, from $1.83 billion a year earlier. U.S. Consumer segment sales increased slightly to $1.38 billion. Sales for the Hawthorne segment decreased 44% to $202.6 million. Scotts had previously warned that sales weren’t looking very good for the segment. Read more here.
After the market closed on Monday, Cansortium Inc. (CSE: TIUM.U) (OTCQX: CNTMF) announced preliminary unaudited financial results for the fourth quarter and full-year ended December 31, 2021. In addition to that, Cansortium forecasted that its expected revenue in 2022 would range between $90–$95 million, reflecting an approximate 45% increase from 2021 at the midpoint. Cansortium said it also expects adjusted EBITDA in 2022 to range between $25–$28 million, reflecting an approximate 35% increase from 2021. Read more here.
Companies flock to celebrities to endorse their brands despite the certainty of their return on investment (ROI). Still, market activity remains immense. So much so that influencer marketing could grow to approximately $16.4 billion this year. Huge returns, in some cases, bolster the fondness for celebrities. Conversely, partnerships also see brands fail to connect with audiences while burning ad budgets. In cannabis, various noteworthy names help get the word out when most traditional digital marketing means are prohibited. The key to winning consumers’ attention and shopping loyalty appears to be authenticity. Read more here.
Cannabis marketing firm Springbig is dramatically reducing its valuation in its IPO deal with SPAC company Tuatara Capital Acquisition Corp. (NASDAQ: TCAC)to $275 million from the previously announced valuation of $500 million. In November, Tuatara Capital Acquisition Corp. said it reached a deal with Springbig to merge with an estimated equity value of $500 million of the combined company with a $300 million springbig enterprise valuation plus $200 million cash on the balance sheet from the SPAC. On Tuesday, the sides agreed “that market conditions have changed since the proposed merger agreement was initially announced,” according to a statement. Although it is worth noting that Springbig’s annual revenue is just $24 million, making even the lowered valuation pretty frothy. Read more here.
The fast-acting edible company 1906 has secured a seven-figure investment from Connecticut Innovations (CI), Connecticut’s strategic venture capital arm and the leading source of financing and ongoing support for Connecticut’s innovative, growing companies. According to the company statement, it is a first-of-its-kind investment by a state venture fund in a cannabis business. Read more here.
In Other News
HEXO Corp. (NASDAQ: HEXO) has established an at-the-market equity program that allows the company to issue and sell up to $40 million of common shares in the capital of the company from treasury to the public, from time to time, at the Company’s discretion. The ATM program replaces the “at-the-market” offering of Common Shares in Canada and the United States having an aggregate sale price of up to C$150 million pursuant to the equity distribution agreement dated May 11, 2021between the Company and BMO Nesbitt Burns Inc. as Canadian agent and A.G.P./Alliance Global Partners and BMO Capital Markets Corp. as United States agents, which was terminated effective April 11, 2022. Read more here.