It’s time for your Daily Hit of cannabis financial news for September 8, 2020.
On The Site
Aurora Cannabis Inc. (NYSE: ACB) gave an update on its business in which the company said it would take a $1.8 billion charge as it released unaudited preliminary fiscal fourth-quarter 2020 results. Revenues also fell sequentially. As an aside, the company also named a new CEO Miguel Martin.
Aurora reported that its 2020 fourth-quarter net revenue was expected to be in the range of $70 million and $72 million, versus $75.5 million in the third quarter. The company said that cannabis net revenue is expected to be between $66 million and $68 million, a sequential drop from the third quarter net revenue of $69.6 million. The company said in a statement, “We expect adjusted gross margin before fair value adjustments on cannabis net revenue to be within a range of 46%-50%, with lower gross margins expected from non-cannabis business segments.”
HAVN Life Sciences
Havn Life Sciences has begun trading on the Canadian Securities Exchange using the ticker symbol “HAVN”. Havn Life said it is focused on the standardized, quality-controlled extraction of psychoactive compounds from plants and fungi to develop products for use in research. Havn Life is also developing natural healthcare products designed to unlock human potential, containing novel and natural psychoactive compounds. The company has no revenue as of yet.
The USDA has decided it wants to hear from those in the industry with regards to proposed regulations now that they have gone through the 2020 growing season. The comment period for the interim final rule published on October 31, 2019, at 84 FR 58522, has been reopened. Comments must be received by October 8, 2020. The agency noted that people who were dealt with the regulatory requirements during 2020 could now comment on those requirements.
The Agriculture Marketing Service (AMS) said it received approximately 4,600 comments from stakeholders during the initial ninety-day public comment period. These comments represent the perspectives of various organizations and individuals within the stakeholder community and provided AMS additional context for decision making. AMS is reopening the public comment period for the Interim Final Rule (IFR) to encourage additional input on several topics identified by commenters during the initial ninety-day comment period. The reopening of the public comment period allows stakeholders to provide AMS with further insight gained from the 2020 hemp growing season.
In Other News
Emerald Health Therapeutics, Inc. (OTCQX: EMHTF) has entered into a share purchase agreement with Village Farms International, Inc. (NASDAQ: VFF) to sell its interest in Pure Sunfarms Corp., a joint venture that was established between the company and Village Farms in 2017 in which the company holds a 41.3% interest. Village Farms has agreed to purchase 36,958,500 common shares in the authorized share structure of PSF, representing all the remaining shares of PSF not held by Village Farms, for an aggregate purchase price of $79,900,000. A minimum of $60,000,000 of the purchase price will be paid in cash at closing. The deal is expected to close in October 2020.
Riaz Bandali, CEO, Emerald Health Therapeutics said, “Over the last 12 months, we have worked in a very disciplined and systematic manner to drive Emerald’s own premium organic-certified production operation and its medical and R&D facilities toward operating breakeven and profitability. We also applied our core capability in science-driven innovation to develop and launch our first Cannabis 2.0 product line, our unique nanoemulsion-based cannabis spray. With the anticipated divestment of our Pure Sunfarms and Verdélite assets, we expect that with the approximately $102M in non-dilutive cash garnered from these two sales we will move to a zero debt position and significant cash reserve, while still retaining two attractive operating facilities. We expect that these factors would leave Emerald well-positioned to advance our existing and emerging product portfolio, and/or to acquire in a strategic and targeted manner new value-added science-based products and services with a positive business outlook focused on achieving revenue growth, profitability and value creation for our shareholders.”