🚘 Dutchie raises $200M at $1.7B Valuation

Curaleaf acquires Cultivate (MA) for $158M. AFC Gamma $119M IPO. MWG raises $10.8M. NewLake Capital Partners + GreenAcreage merge. Canopy $750M Term Loan. Earnings — GTI, Columbia Care, TPCO, Sundial


🌿Industry

Same old Joe: Rebuffing staff who smoked pot fits Biden’s MO. Anyone surprised that Joe Biden would scrutinize the weed-smoking habits of his White House staff hasn't paid attention to one of the more consistent policy threads of his decades-long career. He’s just not ready to embrace cannabis. Despite a shift in public opinion toward legalizing marijuana over the past 30 years, the president’s more conservative approach to weed policy is well-known on Capitol Hill. When the Daily Beast reported late Thursday that “dozens” of young White House staffers had been suspended, asked to resign or placed in a remote work program after admitting to prior marijuana use, pro-cannabis lawmakers were dismayed Friday but hardly shocked. The White House’s decision to dismiss or penalize employees for marijuana demonstrates the gap between the Biden administration and the majority of his party, who increasingly see decriminalization or outright legalization as a major criminal justice reform issue.

California’s provisional marijuana licensing crisis resurfaces, possibly disrupting thousands of MJ companies. For the third time in less than four years, California lawmakers are revisiting the state’s marijuana licensing program, ostensibly to give businesses and regulators more time to get permits processed while allowing the industry to keep functioning without major interruption. In the balance hangs the possible fate of more than 8,000 marijuana business licenses—retailers, growers and other companies that are still operating on business permits that were originally crafted by the state to be temporary, not permanent. At issue is the state marijuana “provisional” licensing program, which California created toward the end of 2018 as a stopgap measure to give entrepreneurs more time to transition from “temporary” business licenses to full “annual” permits. But the bill that established the provisional licenses gave the program only a one-year life span. Then, in 2019, lawmakers reauthorized the program, this time with a two-year window. One of the biggest bottlenecks delaying the issuance of annual permits is a state law, the California Environmental Quality Act (CEQA), that every business in California – marijuana included – must comply with. The amount of time needed to prove compliance with that law has helped create the current backlog of thousands of businesses that are still operating without full annual licenses. A key sticking point: Cannabis regulators don’t currently have the legal authority to issue more provisional permits – or renew existing ones – after Dec. 31, 2021. Unless lawmakers again extend the stopgap program, thousands of companies could be forced to shut down, at least temporarily.

Recreational Cannabis Delivery Ready to Launch in Colorado. It took nearly two years to chart the path, but recreational marijuana delivery is about to start in Colorado. The apps are ready to launch, cars are filled with gas, and permits are being issued — at least five so far, according to the state Marijuana Enforcement Division. Several dispensaries in Aurora, currently the only Colorado town that has recreational marijuana dispensaries and also allows recreational delivery, are racing to get their drivers on the road as soon as their permits are approved by the MED and the City of Aurora. The Green Solution, Medicine Man, Lightshade, Colorado Harvest Company and Rocky Road have all submitted applications, and a few have already been approved, according to the MED and Aurora regulators, with a couple of stores close to launching the service.

Other highlights:

Arizona adult-use cannabis sales hit $2.9M during initial 10 days

Cannabis companies anticipate added sales bump with new round of stimulus checks

Unique cannabinoid delta-8 divides cannabis extraction industry

Cannabis retailers should consider volume, customer experience when designing retail

PharmaCann takes Virginia to court over a medical cannabis business license that the company claims is rightfully theirs


💵Deals

Dutchie — acquires Leaflogix & Greenbits, Closes $200M Series C. The $200M Series C investment was led by Tiger Global, with participation from Dragoneer and DFJ Growth. The Company also acquired LeafLogix and Greenbits, two of the leading point of sale solutions in the cannabis space. Dutchie will continue investing in their APIs and integrations will remain a top priority to continue building out their platform for dispensaries.

Cresco Labs — acquires Cultivate for up to $158M. Cresco will acquire 100% of the equity interests of Cultivate, a Massachusetts-based vertically integrated operator, for total potential consideration of $158M ($90M paid upfront — $15M cash / $75M stock). ~12.5% of the $68M earnout will consist of cash, with the remaining amount, to be paid in stock. The transaction is immediately accretive to Cresco, with the total consideration of $158M implying an EV/2021E EBITDA multiple of 4.0-4.5x, well below Cresco's current ~19-20x trading multiple. Following the deal and planned expansions thereafter, Cresco will boast a top-3 share position in the state of Massachusetts, with three adult-use dispensaries and three medical dispensaries as well as 100,000 square feet of canopy.

MWG Holdings Group — closes $10.8M Series B Preferred Private Placement. MWG is an executive management and holding company based in Sacramento, California. The Company’s affiliated entities operate 10 dispensaries in California and a 30,000 sq. ft. premium indoor cultivation and distribution facility, as well as an exclusive manufacturing partnership with a top concentrate brand. MWG was also recently approved by the City of Colfax, CA to develop and build a 20,000 sq. ft. indoor greenhouse cultivation that is expected to be operational in 2021. The Company also operates five dispensaries and an indoor cultivation in New Mexico and a cultivation and manufacturing facility in Rhode Island. MWG’s retail brand, Perfect Union, experienced tremendous growth in 2020, which included launching or acquiring five new California retail storefronts (Seaside, Riverbank, Morro Bay, Turlock and Weed) and anticipates opening or acquiring and re-branding up to 12 new stores in 2021. MWG’s affiliate plans to launch an edible product line in Q2 2021, starting with gummies.

AFC Gamma (Nasdaq: AFCG) — IPO. 6,250,000 shares at $19.00 per share for $118.8M. The stock closed up +21%.

NewLake Capital Partners and GreenAcreage Real Estate Corp. — Close Merger. Combined Company, to be branded NewLake Capital Partners, owns a diversified portfolio of 24 properties across 9 states with $325M of combined assets. Tenants include many of the highest credit-quality companies in the cannabis industry, such as Curaleaf, Cresco, Columbia Care and Trulieve. Combined company has over $110M in cash. Combined management team of David Weinstein as CEO, Anthony Coniglio as President and Chief Investment Officer and Gordon DuGan as Chairman of the Board.

Canopy Growth — $750M Term Loan Financing with King Street. Under the Credit Agreement, the Company has raised $750M senior secured term loan. The Company also has the ability to obtain up to an additional $500M of incremental senior secured debt pursuant to the Credit Agreement. The Term Loan Facility has a coupon of LIBOR plus 8.50% and is subject to a LIBOR floor of 1.00%. Giving effect to the net proceeds from the Term Loan Facility, the Company's estimated pro forma cash, cash equivalents and short-term investments position as at December 31, 2020 would have been approximately $2.0B.

Eaze — Launches in Michigan, Partnering with Detroit Lions Legend and NFL Hall of Famer Calvin Johnson. Johnson’s Primitiv Brand Will Join Detroit Edible Company, Cannalicious Labs, Fluresh, Pleasantrees, Common Citizen, Terpene Tanks, MKX, Viola and More Made-In-Michigan Cannabis Brands On Eaze’s Delivery Menu. Eaze’s operational partner in Ann Arbor is licensee KTC Industries, and its affiliated business, D&K Ventures, owners of the Detroit Edible Company and Cannalicious Labs brands. Eaze will announce additional operational partnerships in the coming weeks.

Sundial and SAF Group Announce Strategic Capital Partnership. Sundial (NASDAQ: SNDL) and SAF Opportunities LP, a member of the SAF Group (SAF) today have entered into an agreement to form a 50/50 joint venture through a new corporation, SunStream Bancorp Inc. (SunStream). The JV will leverage a strategic financial and operational partnership to generate asymmetrically enhanced risk-return opportunities in the cannabis industry to provide exposure to a portfolio of attractive debt, equity and hybrid investments. The JV will focus on cannabis-related verticals, seeking both Canadian and international opportunities and investments. The Joint Venture's first mandate is the formation of a special opportunities fund with commitments from third party limited partners alongside an initial commitment from Sundial of $100M. The JV expects to pursue additional potential mandates, including a Canadian SPAC and other investments.

Flower One — closes Third/Final Tranche & Second Tranche of its Convertible Debenture Offering. The Company accepted an additional $2.0M, for an aggregate of $19M. The Company closed it’s second tranche of $7.0M last week. Each Debenture Unit consists of one 9.0% unsecured convertible debenture of the Company having a maturity date of three years from the date of issuance and 1,923 common share purchase warrants, representing a 50% warrant coverage, with each whole Warrant entitling the holder thereof to purchase one common share of the Company at an exercise price of CAD$0.39 at any time up to 36 months from the date of issuance.

GrowGeneration — acquires Char Coir. GrowGeneration Corp. (NASDAQ: GRWG) will acquire Char Coir, an RHP-certified growing medium made from the highest-grade coconut fiber available. Established in 2014, Char Coir is recognized as the best coco coir on the market. Char Coir's portfolio of products are 100% biodegradable and compostable and a sustainable alternative to rockwool. Char Coir's line of coco products is projected to add in excess of $15M in revenue to GrowGen in 2021.

Harvest Health & Recreation — Settlement With Falcon International Corp. On February 14, 2019, Harvest announced a definitive agreement to acquire Falcon.  In January 2020, the merger agreement was terminated and the parties entered arbitration to resolve disputes related to the merger agreement. The parties have reached a mutually agreeable resolution of their disputes and have agreed to a final dismissal of all litigation and arbitration between them arising out of the 2019 merger agreement. In accordance with the settlement terms, Harvest now owns 10% of Falcon. Each share comes with a 10-year warrant entitling Harvest to two (2) common shares of Falcon at an exercise price of $1.91, subject to customary anti-dilution adjustments.

4Front Ventures — Secures Land and Funding for Massive New Cultivation and Production Facility in Illinois. 4Front entered into definitive agreements with both the land owner and an affiliate of IIPR to build an up to 558,000 square foot cultivation and production facility in Illinois. This would mark the largest such facility in the state to date. The agreements provide for IIPR to acquire the land for $6.5M and fund the ~$45M buildout of phase one of the facility which will be leased back to 4Front in the form of a 20-year lease with two five-year extensions at the Company's option.

Other highlights:

GrowGeneration — acquires Orange County's 55 Hydroponics ($10M Revenue)

GrowGeneration — acquires Massachusetts' Aquarius Hydroponics ($5M Revenue)

Vibe — closes $13.8M upsized private placement. Signs lease for 6th dispensary in Salinas, CA

MedMen — $16M Non-Brokered Private Placement

Bluma Wellness — $7.5M Loan from Cresco Labs

Curaleaf’s Select Brand — opens Select Shop-in-Shop in Planet 13 SuperStore

TerrAscend and PharmHouse — agree to Settlement and Termination of Offtake Agreement

Agrify — Enters LOI to Build-Out R&D Facility with Atlantis Hydroponics

ManifestSeven — Distribution Partnership with Eel River Organics

Harvest One — closes $5.75M Bought-Deal Public Offering

VEXT — Enters Ohio Cannabis Market

Clever Leaves and Ethypharm — German Pharmaceutical Cannabis Partnership

Aurora Cannabis — puts 1.7M square foot greenhouse up for sale


📄Earnings

GTI —Q4 / FY 2020 Results

  • Q4: $177.2M Revenue, up 13% Q/Q, $65.4M Adjusted EBITDA (36.9% margin), $22.5M Net Income ($0.11 EPS)

  • 2020: $556.6M Revenue, up 157% Y/Y, $179.6M Adjusted EBITDA (32.3% margin), $15.0M Net Income ($0.07 EPS)

  • Cash: $83.8M, subsequent to YE, raised ~$156.0M in SEC registered shares

Columbia Care — Q4 / FY 2020 Results

  • Q4: $87M PF Revenue (+51% Q/Q, 40% GM), $8M Adjusted EBITDA (11% margin)

  • 2020: $198M Revenue (+151% Q/Q, 37% GM), ($1M) Adjusted EBITDA

  • 2021 Guidance: $500M—$530M Revenue, 47%+ GM, $95M—$105M Adjusted EBITDA

  • Cash: Ended the Year with $61M, raised $140M Subsequent to YE2020

TPCO Holding Corp. — Q4 / FY 2020 Results

  • Q4: $40.2M Revenue (+40% Y/Y), ($93.4M) EBITDA — includes various transaction, non-recurring and ~$70.5M of non-cash expenses. ($17.7M) Adjusted EBITDA loss —removes the effects of changes in fair value of financial instruments, impairment charges and other non-cash items

  • 2020: $188.7M Revenue, +76% Y/Y, ($126.1M) EBITDA loss, ($34.6M) Adjusted EBITDA

  • Cash: $337.9M as of December 31, 2020

Sundial — Q4 / FY 2020 Results

  • Completed financial restructuring / eliminated $227M aggregate principal amount of debt

  • Cash: $719M unrestricted cash on hand (as of March 15, 2021)

  • 2020 Revenue: $73.3M in 2020, up 10% Y/Y

  • Q4 Revenue: $13.9M, up 8% Q/Q

  • Committed $58.9M in Q4 and a further $31.5M subsequent to year-end in strategic cannabis-related portfolio investments. Generated realized investment income and fees subsequent to year-end of $9.3M

Body and Mind — Q2 2021 (ended January 31, 2021)

  • Revenue: $6.3M (43% GM), up 19 % Q/Q and up 300% Y/Y

  • Net Loss: $1.15M

  • Adjusted EBITDA: $0.7M

  • Cash: $1.2M (as of January 31, 2021)


🧔People

Trulieve — expands C-Suite, Legal and Government Affairs Teams. Trulieve Promotes Eric Powers to Chief Legal Officer and appoints Ronda Sheffield to Chief Human Resources Officer, Zachary Kobrin to General Counsel, Aaron Lopez to Director Government Affairs. For the last two years, Powers has served as Trulieve's General Counsel and Corporate Secretary, leading the legal team and supporting Trulieve's national expansion. Ronda Sheffield  was most recently the Chief Human Resources Officer for ModWash, Sheffield has held HR leadership positions for top corporations including Lowe's Home Improvement, Sprint Wireless, Starbucks Coffee Company, and Walmart Stores. Zack Kobrin was a partner with Akerman LLP, where he was a leader in the firm's nationally recognized cannabis practice group. Aaron Lopez joins as Trulieve's first Director of Government Affairs. Prior to joining Trulieve, Lopez was the founder of Political Capital LLC, which has worked with leading clients in multiple industries to provide insight and a voice in the legislative and political processes at international, federal, and state levels. 

Curaleaf — appoints Carlos Madrazo as SVP Investor Relations and Capital Markets. Madrazo has 20+ years of experience in investor relations, investment banking and operations at an international level. Most recently, he led Investor Relations and Sustainability for Grupo Televisa, S.A.B., a media and telecommunications conglomerate trading on the NYSE. Prior to Televisa, Carlos held positions with Tutv Llc as CFO, where he launched and co-managed a new business venture and with ING Barings, where he led Latin American media and entertainment investment banking. Carlos also spent six years with Chase Securities in its Global M&A Group.

Grassroots Cannabis Founder and Former-CEO Mitch Kahn joins Koach Capital. Kahn will join as a Partner and chair of its Investment Committee. Koach Capital, a Michigan-based sale-leaseback fund, has already deployed $40M across more than a dozen cannabis retail stores nationwide. Koach Capital launched its new $100M fund at the beginning of 2021 with the goal of adding 40 more retail stores to its portfolio.

Schwazze — appoints Jeff Cozad and Salim Wahdan to Board. Cozad is the co-founder of CRW Cann Holdings, LLC – a special purpose vehicle (SPV) created to support Schwazze. He is also the Managing Partner of his family office, Cozad Investments, LP, which has completed more than 20 investments across a disparate set of industries over the past 13 years. Wahdan has close to two decades of entrepreneurial experience owning and operating retail businesses. Most recently, he was a partner and operator of Star Buds in Adams, Louisville, and Westminster, several of the Star Buds’ branded dispensaries the Company purchased between December 2020 and March 2021. Previous to his time in the cannabis industry, he owned and operated various retail concepts in Colorado.

High Tide — promotes Aman Sood to COO. Sood has been serving as Senior Director, IT & Retail Operations since transitioning to High Tide after the Company's acquisition of META Growth.

From Beauty To Cannabis: Meet Evelyn Wang, Papa & Barkley’s New CEO

“We are on a mission to become a global best-in-class wellness brand powered by cannabis. To get there, there are some milestones we need to accomplish. We need to [tell consumers] why our releaf balm should be in every medicine cabinet. It’s also about pressing harder on education. I believe in utilizing the full spectrum of cannabinoids in our products. We will continue to drive up on innovation and make sure we produce the best and most efficacious products.” Evelyn Wang, CEO, Papa & Barkley


🏬New Store Openings / New Product Launches

Rise (GTI) — Paramus, NJ (2nd in NJ, 54th overall)

Trulieve — Sebring, FL (83rd overall)

Zen Leaf (Verano) — Highland Park Dispensary

TerrAscendNew Jersey Awarded Permit to Process Cannabis

Jushi — Debuts Vast Array of New Cannabis Products Across Multiple States. Debuted a comprehensive suite of cannabis brands across multiple states under the names: The BankThe LabTasteologyNira + Medicinals and Sèche, addressing a wide variety of consumer and patient needs.

Agrify Launches Total Turn-Key Customer Solution with Targeted IRR of 40-50%.

Kristen Bell’s Happy Dance™ (Cronos) available at Ulta Beauty™. Happy Dance™ CBD products are now available at 550+ Ulta Beauty™ locations and online at Ulta.com.


💻Hiring

Kings Garden — In-House Counsel (Palm Springs)

dutchie — Director, Strategic Finance (Boston)

BLAZE — Sales Director (LA)


🤷‍♂️Somewhat Relevant

No- and Low-Alc Could Reach $3B in Retail Sales by 2025, according to Goldman Sachs Report.


👋 Newsletter curated by Dai Truong.