It’s time for your Daily Hit of cannabis financial news for November 30, 2021.
On The Site
After the market closed on Monday, Harborside Inc. (CSE: HBOR), (OTCQX: HBORF) announced it was buying California retailer UL Holdings Inc. also known as Urbn Leaf, and LPF JV Corporation, better known as Loudpack. Loudpack is a manufacturer, cultivator and distributor of award-winning cannabis brands in California. The newly combined company will be renamed StateHouse Holdings. The company said that it expects to trade the new company on the Canadian Securities Exchange under a new symbol (CSE: STHZ) and the deal is expected to close in the first half of 2022. Ed Schmults, the current CEO of Urbn Leaf, is expected to be appointed as CEO of StateHouse upon completion of the Urbn Leaf Transaction and will be joining the Board of Directors of StateHouse.
In addition to announcing the big transaction, Harborside also delivered some sobering news to investors. The company said it was withdrawing its previous revenue guidance for 2021 and said it would revisit the forecast after the deal closes. A variety of reasons were given including a decline in wholesale pricing for bulk products in the California market and a decline in retail revenue which was primarily due to a decrease in retail store foot traffic.
Harborside reported that total gross revenues were $17.9 million, 10.4% higher sequentially than the previous quarter. However, both retail and wholesale revenues fell sequentially and the difference was only made up through manufacturing revenues, which didn’t exist in the second quarter. The manufacturing revenues came as a result of the Sublime acquisition.
Red White & Bloom
Red White & Bloom Brands Inc. (OTCQX: RWBYF) delivered its third-quarter 2021 earnings with revenue increasing 93% to C$11.8 million versus last year’s C$6.1 million. The company reported a net loss of C$5.5 million down from last year’s net loss of C$9.5 million. RWB said that the change in net loss was primarily a result of the revaluation of its Call/Put options, as well as rightsizing compensation and achieving economies of scale. RWB though is still facing a huge debt problem that it warned investors about last quarter. The company said this time that it is in advanced discussions with a number of funds to restructure the current debt of $115 million due in 2022 into a more advantageous long-term debt solution.
Chicago Atlantic Real Estate Finance, Inc. is a newly formed commercial real estate finance company or REIT. The current portfolio is mostly first mortgage loans to state-licensed operators in the cannabis industry. The company expects the IPO to be priced between $16.00 and $18.00 per share and could raise as much as $129 million. It has applied to list the common stock on the Nasdaq Global Market under the symbol “REFI”.
This week, Horizons – Perspectives On Psychedelics the largest and longest-running psychedelic conference will take place in New York City. It is a five-day conference that includes credit coursework for professionals as well as sessions on medical research. The event has grown from its original one-day conference with the addition of classes and business talks. The initial three days are held at the prestigious New York Academy of Medicine.
In Other News
Cansortium Inc. (CSE: TIUM.U) (OTCQX: CNTMF) announced financial results for the third quarter ended September 30, 2021. Revenue increased 9% to $15.6 million compared to $14.3 million. Florida revenue increased 4.3% to $13.1 million compared to $12.6 million. Adjusted gross profit1 increased to $9.8 million or 62.7% of revenue, compared to $9.5 million or 66.6% of revenue. Adjusted EBITDA increased 34% to $4.9 million or 31.4% of revenue, compared to $3.6 million or 25.5% of revenue. The company is revising its 2021 outlook for revenue and now expects it to range between $63-$66 million. The Company continues to expect adjusted EBITDA to range between $18-$26 million and anticipates achieving the lower end of the range. This compares to approximately $52 million of revenue and $10 million of adjusted EBITDA in 2020.
Headset, the leading provider of data and analytics to the cannabis industry, announced today that it has raised $3M of new capital led by Althea, a private equity investment firm. Other participating investors are Poseidon Investment Management, a leading investor in the legal cannabis and hemp industries and WGD Capital, L.P., a cannabis focused venture fund. As part of this financing, Headset also converted $5.6M of bridge notes previously issued in August 2020 and April 2021.
TPCO Holding Corp. announced its appointments of Tiffany McBride as Managing Director of Social Equity Ventures and Kerry Arnold as Chief People Officer. The two positions further The Parent Company’s mission to elevate diversity, equity and inclusion efforts within the cannabis sector.
Halo Collective Inc. (NEO: HALO) (OTCQB: HCANF) announced that the Company’s stock symbol has reverted back to “HCANF” following the temporary 20-day post-consolidation trading period associated with the previously announced share consolidation. The Financial Industry Regulatory Authority Inc. (FINRA) temporarily appends the letter “D” to the root symbol of all OTC equity securities subject to a reverse split with a CUSIP change to alert investors that the security was recently subject to such a corporation action. The CUSIP number for Halo’s common stock is 40638K507.