It’s time for your Daily Hit of cannabis financial news for September 16, 2020.
On The Site
PharmHouse is costing Canopy Rivers Inc. (OTC: CNPOF) millions as it works to keep it afloat after the company missed its cash flow goals. The problems have led to a deterioration among the partners causing counterclaims of bad behavior. Canopy Rivers said it will act as a debtor-in-possession lender for PharmHouse and will provide up to $7.2 million in DIP financing. This will allow PharmHouse to continue its day-to-day operations throughout the anticipated restructuring. The Joint Venture Partner (2615975 Ontario Inc.) has indicated that it will not contribute financially to address PharmHouse’s near-term liquidity issues.
Canopy Rivers owns 49% in the joint venture of PharmHouse, which was formed in May 2018. The company partnered with Canopy Growth Corporation (CGC) and TerrAscend Canada Inc. which provided strong support for the company’s significant investment in PharmHouse’s automated production facility, as well as its guarantee of the PharmHouse Credit Facility.
High Tide Inc. (OTCQB: HITIF) reported revenue for its third quarter of fiscal 2020 of $23.20 million an increase of 180% from $8.29 million for the same quarter last year. High Tide also delivered income from operations of $2.11 million versus a loss from operations of $4.04 million for the same period of 2019. The adjusted EBITDA for the quarter was $3.96 million compared to an adjusted EBITDA loss of $3.37 million for the same quarter last year.
Cannabis technology company Akerna (Nasdaq: KERN) reported that cannabis sales over the Labor Day weekend (September 4-7) exceeded a quarter billion dollars, however, the increase was lower than previous years. Purchases jumped year-over-year by 23% to $245 million. Akerna said this included both medicinal and adult-use sales. Separately, adult-use sales increased by 35% over the holiday weekend.
Friday (September 4) saw the biggest sales day, representing a year-over-year increase of 36%. Likewise, Saturday saw a 36% increase in sales, while Sunday saw the biggest uptick with a 43% increase. Labor Day itself, however, saw an 8% decrease in sales from the previous year. It should be noted that Massachusetts does not allow sales on holidays and dispensaries in the state were closed for the day.
In Other News
Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) has entered into definitive agreements pursuant to which Trulieve has agreed to acquire cultivator and producer PurePenn LLC and Pioneer Leasing & Consulting LLC as well as dispensary operator Keystone Relief Centers LLC, doing business as Solevo Wellness. Trulieve has agreed to acquire PurePenn for an upfront payment of $46 million, comprised of $27 million in Trulieve subordinate voting shares and $19 million in cash, plus a potential earn-out payment of up to approximately $60 million in Trulieve Shares based on the achievement of certain agreed EBITDA milestones. Trulieve has agreed to acquire Solevo for an upfront purchase price of US$20 million, comprised of $10 million in cash and $10 million in Trulieve Shares, plus a potential earn-out payment of up to approximately $15 million in Trulieve Shares based on the achievement of certain agreed EBITDA milestones.
MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF), a leading cannabis retailer with operations across the U.S., today announced financing commitments totaling over US$20,000,000 from existing lenders and institutional investors. The commitments include (1) US$10,000,000 in gross proceeds under a new unsecured convertible facility, (2) US$5,700,000 in additional gross proceeds under its senior secured term loan led by Stable Road Capital and (3) US$5,000,000 in additional gross proceeds under its senior secured convertible facility led by Gotham Green Partners.
AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), today announced that it has formed a strategic partnership with CB1 Capital Management LLC, a New York-based investment management firm that specializes in health and wellness advancements through cannabinoids. CB1 Capital invests in companies that work within the supply chain of cannabinoid-based wellness solutions, products and therapies that have consumer or commercial use-cases. As a strategic partner to AdvisorShares, CB1 Capital will provide research on U.S. cannabis companies, collaborate on education and philanthropic initiatives, and serve as a public advocate on the vast benefits of cannabis innovation.