It’s time for your Daily Hit of cannabis financial news for November 20, 2018.
On The Site
Adult-use cannabis sales began in Massachusetts on Tuesday morning making it the seventh state to legalize and establish an adult-use market. Two dispensaries are set to open at 8 am to service customers.
Cultivate Holdings, LLC, which has a retail shop in Leicester and New England Treatment Access (NETA) LLC in Northampton were given approval by The Massachusetts Cannabis Control Commission. Adults 21 and older with a valid ID will be able to purchase up to one ounce of marijuana from licensed marijuana retail stores, of which no more than five grams can be in concentrate form. It will remain illegal to consume marijuana in public.
Emblem Corp. (EMMBF) delivered revenues of $2.3 million, a 281% increase year-over-year and a 50% increase quarter-over-quarter. Still, Emblem reported a net loss of $10.8 million versus last year’s loss of $2.8 million for the same time period. The adjusted EBITDA fell to a loss of $2.8 million from the previous year’s loss of $1.9 million. The company blamed the decrease on higher operating expenses. The company said that the increase in revenues was a result of the commencement of oil sales during December 2017 and the launch of the adult-use recreational market in the third quarter of 2018.
Is the cost of legalized cannabis too high? According to one study commissioned by the Centennial Institute at Colorado Christian University, the answer is yes. Hoping to understand the impact of cannabis legalization fully, the study examined publicly available data in the state of Colorado, highlighting nine areas of interest. According to the study, for $1.00 generated by Colorado’s cannabis industry, state residents spent approximately $4.50 to mitigate the costs of legalization. The most significant contributors to costs were related to the healthcare system and high-school dropout rates.
While the study presents a damning portrait of cannabis legalization in Colorado, the study also relies on flawed estimates and simple correlations to arrive at many of its conclusions.
In Other News
MariMed Inc.(MRMD) reported its third-quarter 2018 financial results for the quarter ended September 30, 2018. Revenues increased 98% from approximately $1.7 million to approximately $3.4 million. Operating income increased 200% from approximately $287,000 to approximately $861,000.
Still, the company delivered a net loss of approximately $10.1 million and attributed it to the amortization of stock option and warrant issuances, and the settlements of debt via the issuance of common stock—required by generally accepted accounting principles. The company said that these items had no effect on operating income or liquidity and excluding these non-cash items, the net income for the quarter was approximately $406,000