It’s time for your Daily Hit of cannabis financial news for October 2, 2019.
On The Site
Vape products, once considered the rising stars of the legal cannabis marketplace have struggled under the weight of the vaping crisis. Massachusetts banned all vape products for four months in order to err on the side of caution while the issue is investigated. Around the middle of August, vape product sales began dropping according to data from Headset, however, it seems the group may be slowly recovering.
Sales in Nevada and Washington both began to pick back up, while California seems to have stabilized. Most consumers are learning that the issues with vapes stemmed from products purchased outside the regulated channels.
Canopy Growth Corporation (TSX: WEED) (NYSE: CGC) has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.
Venture capital firm Canopy Rivers Inc. (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000, and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024.
In Other News
TILT Holdings Inc. (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger, as well as the final separation of most of these founders from the Company. During the second quarter of fiscal 2019, the company reported stock-based compensation expense of greater than $47 million associated with these now forfeited stock options. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even. The successful forfeiture of these stock options follows the recent announcement of an adjusted EBITDA positive month of July
HeavenlyRx Ltd. Acquired CBD company PureKana. Under the agreement, HeavenlyRx will acquire a majority ownership stake from the Company’s founding members with the acquisition expected to close by the end of 2019. Standing alongside HeavenlyRx’s high ethos and quality standards, PureKana – located in Scottsdale, Arizona – is a rapidly growing CBD brand and company with a large consumer base that leans toward a young and active demographic.
Westleaf Inc. (TSX-V:WL) (OTCQB:WSLFF) signed amendment agreements to two of its existing credit facility commitment letters with ATB Financial resulting in an additional $5.7 million of capital available for use by the Company. Westleaf has increased its term loan on The Plant, its fully completed extraction, manufacturing and product formulation facility, by $2.7 million and has secured a $1.0 million revolving credit facility to assist with working capital provided that any draw downs in relation thereto can only be made after final receipt of a standard processing license for The Plant from Health Canada. In addition, the credit facility related to the construction of Westleaf’s cultivation facility in Battleford, Saskatchewan has been amended to reduce its restricted cash requirement by $2.0 million.