It’s time for your Daily Hit of cannabis financial news for October 23rd, 2019.
On the Site
Good Tax News for the Cannabis Industry: California Repeals 280E limitation for Personal Income Tax
Existing federal income tax laws disallow a deduction or credit for business expenses of a trade or business whose activities consist of trafficking specified controlled substances, including marijuana. This has been removed and cannabis businesses can begin to partake in tax regulations that ordinary businesses would.
California Cannabis M&A is Challenging As Rules Keep Changing
The article describes five minor, and very obvious, points that must be considered in connection with a cannabis M&A transaction:
(1) California cannabis regulations;
(2) regulatory prohibitions against sales of cannabis licenses;
(3) triggering ownership disclosures through indirect acquisitions;
(4) regulatory prohibition of single-step complete changes of ownership; and
(5) additional considerations for foreign investors.
These five items are issues. These items are obvious considerations for an experienced lawyer representing a party in a significant M&A transaction. The issues go beyond these five points and would take a multiple page document to cover fully.
Casa Verde Leads $7M Round for Bespoke Financial
Casa Verde, a venture firm that counts Snoop Dogg as a partner, led a $7 million financing round for cannabis short-term lender Bespoke Financial. “Our approach will dramatically improve cash flow cycles across the supply chain and provide scalable working capital to fuel our clients’ growth.” says Bespoke’s CEO and financial co-founder George Mancheril.
Executive Spotlight: Ben Larson, CEO of Vertosa
Calling upon his experience as a serial entrepreneur, investor, and startup adviser, Ben and the Vertosa team enable mainstream businesses to enter the growing cannabis industry by providing water soluble active ingredients to infuse beverages and other products. The company’s mission is to work closely with client needs to create stellar market-ready products that are ready to scale.
In Other News
Green Growth Brands Fourth Quarter Revenue Increases 29% Quarter-Over-Quarter to $7.2 Million
Green Growth Brands Inc. (GGB or the Company) (CSE: GGB) (OTCQB: GGBXF) today reported its results for the fourth quarter and full year ended June 30, 2019. The Company reported total revenue for fiscal 2019 of $15.7 million. For the three month period ended June 30, 2019, the Company reported a 29% quarter-over-quarter increase in revenue to $7.2 million. “In a short-time we have built a pathway to open up to 47 dispensaries in three key states and established the first, best and only vertical CBD distribution network in the country,” said Peter Horvath, CEO of Green Growth Brands. “This foundation leverages our strengths of creating brands consumers love, building innovative product assortments and operating and growing retail at scale, quarter after quarter.
Innovative Industrial Properties Acquires Florida Property and Expands Real Estate Partnership with Trulieve Cannabis Corp.
Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it closed on the acquisition of a property in Quincy, Florida, which comprises five buildings totaling approximately 120,000 square feet of industrial space, from Trulieve Cannabis Corp. (Trulieve), a leading and top-performing cannabis company in the United States (CSE: TRUL & OTC: TCNNF).
Concurrent with the closing of the purchase, IIP entered into a triple-net lease agreement with a subsidiary of Trulieve, for continued operation as a licensed medical cannabis cultivation facility.