Earnings season is just beginning and it kicks off with Scott’s Miracle-Gro whose hydroponic brand Hawthorne saw its sales drop by 30%. Sales are forecast to continue falling by another 20-25%. CEO Jim Hagedorn described the cannabis market as a bloodbath and said the New York market had tripped over itself. Still, he insisted there was progress in the company’s investment into RIV Capital and Etain even though shareholders are suing RIV for the acquisition. Overall the company reported total sales fell by 7% to $526 million which beat expectations.
Canadian cannabis company High Tide (NASDAQ: HITI) (TSXV: HITI) saw both its revenues and its losses balloon in its final fiscal quarter of 2022, which ended on Halloween. revenues shot up for the year as a whole by 97% to C$356.9 million, but High Tide still lost $52.5 million in the fourth quarter alone, and posted a C$70.8 million loss for the fiscal year.
LeafLink raised $100 million in Series D financing this week. The company also moved co-founders Ryan Smith and Zach Silverman to new roles. Smith is moving from CEO to Executive Chairman and Silverman from Chief Technology officer to Senior Advisor. The company has now raised more than $230 million.
In Other fundraising news, Village Farms raised $25 million and 3D cannabis shopping app company Weedar raised $1.5 million.
In legal news, a New York judge is still not allowing cannabis licenses in the five regions currently involved in a lawsuit regarding social equity applicants. It was a blow to the Office of Capital Management that has made social justice applicants a priority in the very slow opening of the adult-use program.
Two dozen people have been indicted for a national cannabis smuggling operation that shipped California cannabis to New York. The U.S. Attorney’s Office in the Northern District of New York, said the indictments cover an alleged six-year operation that “shipped thousands of kilograms of marijuana” and edibles from Fresno, California, to “locations throughout the United States, including the Capital Region of New York.”
Speaking of New York, cannabis regulators extended a deadline for marijuana farmers to choose their business model to the end of the month, instead of requiring them to make a choice by Feb 1. Brittany Carbone, a board member of the Cannabis Association of New York, said that the state OCM relented on Monday during negotiations with cannabis farmers and gave all 280 growers until Feb. 28 to make their business model selection.
And finally, one of the original cannabis tech firms is saying goodbye to the industry and hello to bitcoin. Akerna is selling its cannabis assets to PosAbit and what is left of the company will merge with Gryphon digital mining. Akerna has been struggling over the years with expensive acquisitions that it then sold for much less than what had been paid. Losses never seemed to decline by much and revenues never really took off. CEO Jessica Billingsley will be a part of the board of Gryphon as Akerna is no more.
That’s it for this week. Don’t forget to register for our Women’s Summit on March 23 in New York City.