It’s time for your Daily Hit of cannabis financial news for October 22nd, 2019.
On the Site
Executive Spotlight: Matt Hawkins
Green Market Report highlighted Matt Hawkins, the managing principal and co-founder of Entourage Effect Capital (formerly Cresco Capital Partners, LLC). They are a private equity investment firm, dedicated to investing in the cannabis industry in the United States. He has been with EEC for five years. Matt attended school at the University of Texas.
EEC’s most important five year goal is to be the most valuable name on their portfolio companies cap table and have funded the cannabis companies that will lead this industry.
Price Sensitivity Expected to Increase Among Cannabis Consumers
A new report from the cannabis data company Headset has suggested that cannabis consumers are going to become more sensitive to the prices of products in dispensaries. Much has been made of the cannabis luxury brands, but it seems customers are gravitating towards cheaper products.
That’s because millennials make up half of the cannabis market and they don’t have a lot of disposable income. This age group, which is between 23-38 account for 51% of the market. Their top preferred categories are flower, vape pens and concentrate in that respective order. They spend less than $25 per trip to the dispensary, with only Gen Z (23 and younger) as a more frugal group.
The FDA, FTC Join Forces To Warn Rooted Apothecary About Its CBD Products
The U.S. Food and Drug Administration and the Federal Trade Commission posted a joint warning letter dated October 10, 2019 to Rooted Apothecary LLC, of Naples, Florida, for illegally selling unapproved products containing cannabidiol(CBD) online with unsubstantiated claims that the products treat teething pain and earaches in infants, autism, attention-deficit/hyperactivity disorder (ADHD), as well as Parkinson’s and Alzheimer’s disease, among other conditions or diseases.
The company has 15 days to correct its violations.
MoonCloth Designs Launches Eco-Friendly Hemp Based Bath and Body Line ‘Moment’
Today MoonCloth Designs announced the launch of ‘MOMENT’, a Hemp Wellness Collection focused on bringing more eco-friendly hemp-based bath + body products to market.
“We are driven to bring hemp into the sustainability spot light as an eco material solution. We started off working with hotels and spas to provide more sustainable solutions to their environments. We are now launching our own hemp wellness collection which showcases are beautiful hemp robes and hemp seed oil body products, which is now available on our online store and select retail partners,” explained Founder & CEO Sarah Harf.
In Other News
Cresco Labs and Origin House Announce Expiration of HSR Waiting Period
Cresco Labs Inc. (“Cresco Labs” or the “Company” – CSE: CL, OTCQX: CRLBF) and CannaRoyalty Corp. d/b/a Origin House (“Origin House” – CSE: OH, OTCQX: ORHOF) are pleased to announce today that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”), has expired with respect to the proposed acquisition of Origin House by Cresco Labs (the “Transaction”). The expiration of the waiting period under the HSR Act satisfies one of the remaining conditions to completing the Transaction. With the waiting period passed, the parties are now working towards closing the Transaction on terms that will be mutually agreeable to both parties.
“We look forward to working through the remaining steps required to close the Transaction” said Charlie Bachtell, CEO and Co-founder of Cresco Labs, Marc Lustig, Chairman and CEO of Origin House, added “the expiration of the HSR Act waiting period is a significant milestone for this transaction and for the entire cannabis industry.”
Zenabis Announces Cultivation Agreement with Tantalus Labs
Zenabis Global Inc. (TSX:ZENA) (“Zenabis” or the “Company”) today announced that it has entered into an agreement (the “Cultivation Agreement”) with Tantalus Labs Ltd. (“Tantalus Labs”), pursuant to which Zenabis will grow and harvest cannabis plants from clones provided by Tantalus Labs.
The plants will be grown and harvested at Zenabis Langley. Tantalus Labs will be responsible for all drying, trimming and packaging at its own licensed facilities. The initial term of the Cultivation Agreement will be two years with the option to renew thereafter for successive two-year terms by mutual written agreement of the parties. In 2020 and 2021, Zenabis expects to grow and supply quantities of cannabis plants that will be sufficient for Tantalus Labs to produce thousands of kilograms of dried cannabis.
“Tantalus is excited to leverage the proven QA systems and elite agricultural insight of Zenabis at their Langley facility. This relationship will allow Tantalus to deliver our sungrown quality promise to an expanding audience in Canada, while collaborating with some of the brightest agricultural minds in this new Canadian cannabis industry. Our team is motivated to evolve our quality standards with Zenabis for years to come.” said Dan Sutton, Chief Executive Officer, Tantalus Labs.