The Daily Hit: November 18, 2019

It’s time for your Daily Hit of cannabis financial news for November 18, 2019.

On The Site

MedMen

MedMen Enterprises Inc. (MMEN.CN) (MMNFF) claimed to be the unicorn of marijuana companies when the California-based business went public in May of 2018. Now just 18 months later, it has a market cap of $170 million, according to Yahoo Finance, and is being forced to dramatically curtail its plans.

On Friday, the company said it was taking several steps to achieve profitability including laying off of 190 employees or 20% of its workforce, cutting back on store openings and selling assets.

In addition to the employee layoffs, which the company said would save $10 million, MedMen is also selling its interest in Treehouse REIT for net proceeds of $14 million. So far, its gotten $7 million and has agreements to sell the remainder. 

Sunniva

Sunniva Inc. (OTC: SNNVF) stock plunged over 40%  to lately trade at 45 cents after the company announced that President Kevin Wilkerson would resign. This comes just one week after the company’s Chief Financial Officer also resigned.

Wilkerson also resigned from his position as President and Chief Executive Officer of Sun CA Holdings effective December 2. The company said the resignation was for personal reasons and a replacement has not been named. It follows last week’s announcement that CFO Dave Lyle was resigning, also for personal reasons, and David Weinmann has been appointed interim CFO. In addition to that, Michael Barker who was on the board of directors also resigned.

Acreage Holdings

Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.U) (OTC: ACRGF) is buying New Jersey’s  Compassionate Care Foundation, Inc. which is a vertically integrated cannabis nonprofit corporation. The deal is subject to state approval and the amount of the deal was not disclosed. However, the state of New Jersey did state that Compassionate Care reported $4.9 million in revenue in 2018, badly trailing Curaleaf’s $19 million in revenue for 2018.

The Biennial report also stated that when looking at total inventory, neither Greenleaf Compassion Center nor Compassionate Care Foundation eclipsed 200 lbs of total product from June to December of 2018. “During the study period, Compassionate Care Foundation had a range of between 12 and 102 lbs of product onhand and an average of 41 lbs, while Greenleaf had a range between 5 and 12 lbs of product on hand and an average of 8 lbs on-hand.

In Other News

Ayr

Ayr Strategies Inc. (CSE: AYR.A)(OTCQX: AYRSF) is reporting financial results for the three and nine months ended September 30, 2019. Total revenue increased 19% to $32.1 million compared to $26.9 million. Loss from operations was $10.7 million compared to $20.1 million. Adjusted EBITDA increased 16% to $8.7 million compared to $7.5 million.

“We are extremely pleased with how well our business is executing after just four months of combined operations,” said Jonathan Sandelman, CEO of Ayr. “In that brief time, we have made considerable progress on key initiatives in both the Western and Eastern U.S. – organic growth has exceeded our expectations, our retail stores are among the most productive in the industry, and our wholesale business has become a substantial contributor to the top and bottom line.

“In Nevada, we continued to generate margin improvements from vertical integration of the four companies we acquired. In fact, our dispensaries are now sourcing even more products internally than they were just a few months ago, and our cultivation expansion in Nevada remains on track for completion in the first half of 2020.  In Massachusetts, our wholesale business continued to gain momentum during the quarter as our monthly revenue has nearly tripled since closing our qualifying transaction in May.

Cannabis Sativa

Cannabis Sativa, Inc. (OTCQB:CBDS) reported earnings for the quarter ending September 30, 2019 year-to-date results and certain comparisons to the same period in 2018.

For the nine-month period ended September 30, 2019, revenue increased 72%, to $705k, from a year ago while gross margin improved 71% from the comparable 2018 period ($413k vs. $241k), at 59% of revenue. PrestoDoctor’s patient growth and geographic expansion were the primary drivers for the improved revenue and margins. Operating loss for the nine months ended 9.30.19 was $1.7 million, an improvement of $1.4 million (42%) from the same period in the prior year. The Company continues to see benefits of its aggressive cost control program, implemented two years ago. Operating costs (SG&A) are down 36% from YTD Q3 2018, and down 66% from YTD Q3 2017, primarily due to lower professional and consulting fees.

Freedom Leaf

Freedom Leaf, Inc.  (OTCQB: FRLF), a first in class hemp consumer packaged goods company that recently acquired Green Lotus™ to build its position as a leading provider of natural cannabinoid-rich hemp products, announced today that it closed a $5 million convertible note financing led by an affiliate of Merida Capital. David Goldburg, Chairman of the Board, and Dave Vautrin, Independent Director, invested $125,000 and $67,000, respectively, in the convertible note financing. Proceeds from the financing will primarily support the Company’s production, marketing, and sales efforts as it continues to build its position as a leading CBD and hemp company servicing the North American and Mexican markets.

One World Pharma

One World Pharma Inc. (OTC: OWPC), “OWP,” a fully licensed pure-play cannabis and hemp ingredient producer in Colombia, is pleased to announce that its common stock has been uplisted to the OTCQB platform, effective immediately.

Acceptance to the OTCQB will increase liquidity in the Company’s common stock and provide shareholders with greater access to the majority of broker-dealers who trade stocks on the OTCQB. Historically, ascension to the OTCQB has often been met with enhanced liquidity and visibility. The OTCQB is a venture market designed for early-stage and developing U.S. and international companies.

“We are most pleased to have reached this milestone and to have been accepted to trade on the OTCQB platform,” said Craig Ellins, Chief Executive Officer, One World Pharma. “Uplisting to the OTCQB allows us to have our corporate successes potentially recognized by a far greater constituency of brokers, analysts and individual investors and ultimately seek a listing on a major exchange.”

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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