🌲 Grass Lands at Outside Lands downsized vs. 2019

Columbia Care completes acquisition of Medicine Man (CO). TGOD acquires Galaxie Brands. RI awards 5 medical dispensary licenses via lottery. XS Financial raises $43.5M @ 9.50% Interest + Warrants.

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Grasslands dried up, according to SFGATE.

“In 2019, Grasslands debuted as the first cannabis marketplace at a major festival felt unprecedented. It seemed every Cananbis brand under the sun was involved in 2019, and sales reached a $1 million, but this year the offerings felt limited, with Eaze having the most noticeable footprint. The experiential installations were also scaled back, making the area feel more like a mediocre tradeshow than a celebration of cannabis culture. It felt like the cannabis industry took a step backwards, and one wonders whether the area will even return in 2022.” — Dan Gentile

Rhode Island picks 5 medical cannabis dispensaries for licenses. The state Department of Business Regulation held a random lottery, complete with a R.I. Lottery balls and a tumbler from Twin River Casino to award the coveted cannabis licenses. The winners are RMI Compassion Center in Woonsocket, Pinnacle Compassion Center in Central Falls, Green Wave Compassion Center in Foster, Solar Therapeutics in Cranston and Plant Based Compassionate Care in South Kingstown. WPRI-TV reports none of the cities and towns currently have a dispensary. The state’s three existing ones are located in Providence, Warwick and Portsmouth. State lawmakers approved expanding the number of medical cannabis dispensaries authorized in Rhode Island from three to nine more than two years ago. The goal is to provide more access to the state’s thousands of medical cannabis patients, as well as increased business for its nearly 70 licensed cannabis growers. The selected companies will pay a yearly $500,000 licensing fee and must open their dispensaries in nine months.

Push begins for Cannabis Legalization in Arkansas. A group that failed to get a recreational marijuana amendment on the ballot four years ago and sued the attorney general over procedural issues hopes to give Arkansas voters a chance to legalize recreational marijuana next year. Arkansas True Grass, a group of marijuana advocates and volunteers, is gathering signatures for a constitutional amendment that would allow Arkansans aged 21 and over to purchase up to four ounces of marijuana a day and grow up to 12 plants of their own. The group needs 89,151 verified signatures to make the November 2022 ballot. The deadline to submit petitions is July 8, 2022. The new measure would also expand the number of businesses allowed to sell marijuana. The amendment allows for an unlimited number of business licenses, which spokeswoman Briana Boling said would be “affordable” and would be administered by the state Department of Agriculture.

N.J.’s medical marijuana dispensaries say they could sell legal weed now if the state stops dragging its feet. A group representing New Jersey’s medical marijuana dispensaries said the companies are ready to start selling weed to the public now — they just need approval from the state. The New Jersey Cannabis Trade Association posted on its website that the state’s alternative treatment centers have enough cannabis to meet both patient demand and that of a 21-and-older market. The statement contradicts what New Jersey’s Cannabis Regulatory Commission has said. When awarding new medical marijuana licenses this month, the commission’s Executive Director Jeff Brown laid out a familiar situation: a growing number of patients and a medical market that’s slow to keep up.

Launch of Curaleaf International driven by the liberalization of cannabis accelerating across Europe.

Curaleaf International (formerly EMMAC Life Sciences Group), part of Curaleaf Holdings, Europe’s largest vertically integrated cannabis company, announced its official rebrand to the European market. Curaleaf International’s cannabis flower products and extracted cannabis-based products now supply five separate markets, including Germany, Europe’s largest market for medicinal cannabis which is expected to be worth over €840M by 2025. In the UK, specifically over the last 12 months, the number of patients using the Company’s products have increased fivefold. Building on the momentum within the European medicinal cannabis market, Curaleaf International expects to see significant regulatory change across Europe for recreational cannabis over the coming years with expectations that the total European cannabis market will be worth €3.2B by 2025. Curaleaf International expects the trends to follow that of Canada and the USA, which both started with the legalization of medicinal cannabis before moving to legalize cannabis for adult use. With a population of ~740 million people, Europe presents a greater market size than that of North America.


XS Financial — Raises $43.5M to Advance Growing Pipeline. XS Financial has completed its private placement of unsecured convertible notes in the aggregate principal amount of $43.5M, of which $33.5M will be funded at closing and $10M is available on a delayed draw on the same terms until June 30, 2022. The financing was led by a large institutional investor, with additional participation from an existing XSF Strategic Partner, urban-gro, Landrace Financial, Bengal Capital, and KEY Investment Partners. XS Financials' pipeline currently exceeds $100M in CAPEX financing demand, and the Company has reviewed in excess of $300M of transactions in 2021. The net proceeds from the Offering will primarily be used to finance CapEx and equipment purchases for existing customers and the strong demand from the growing pipeline of credit-worthy cannabis operators in the United States. Interest on the Notes will accrue at the rate of (i) 9.50% per annum, of which 7.50% shall be payable in cash and the remaining 2.00% shall be PIK Interest and (ii) in the event of a NASDAQ Listing, 8.00% per annum, of which 6.00% shall be payable in cash, and the remaining 2.00% shall be payable as PIK Interest. The Company also issued an aggregate of 16,750,000 warrants, one for each $2.00 principal amount of Notes. Each Warrant entitles the holder to acquire one subordinate voting share of the Company at an exercise price of C$0.45 until October 29, 2024.

Columbia Care — Completes Acquisition of Colorado-Based Medicine Man. Total upfront consideration was $42.0 million, comprised of $8.4 million in cash and $33.6 million in stock, with the potential for an additional milestone payment based on 2021 performance. The transaction is immediately accretive to Adjusted EBITDA and cash flow from operations. Upfront consideration of $42.0 million represents a multiple of approximately 4.5x projected 2021 EBITDA. This acquisition adds one cultivation facility and four dispensaries to Columbia Care’s Colorado operations, including the Medicine Man Longmont location, which is anticipated to close in Q1 2022. Columbia Care’s footprint in Colorado will now total 26 dispensaries and six cultivation and manufacturing facilities, including those under The Green Solution brand.

The Green Organic Dutchman — Enters Into a Definitive Agreement to Acquire Galaxie Brands Corporation.

Galaxie is a licensed producer focused on product innovation, branding and manufacturing 2.0 products. The company creates and produces a range of products including premium cannabis edibles, infused pre-rolls, flavoured and full melt vapes, oils and solventless products. It also provides manufacturing and product development services to partners across Canada. Initial share consideration valued at ~C$21M. As part of the Transaction, the Company will also assume $1.3M of existing shareholder loans of Galaxie. The vendors of the Galaxie Shares are also entitled to earn up to C$15M in additional shares of TGOD, subject to achievement of certain financial milestones by December 31, 2022.

Hydrofarm — Completes Acquisition of Innovative Growers Equipment. The addition of the IGE commercial equipment product range complements Hydrofarm’s existing lineup of high performance, proprietary branded products.

📄Company Updates / Earnings

Organigram — Corporate Update. Organigram believes that market share continues to be an important indication of success for a licensed producer (LP) as sell through to end consumers is a strong predictor of long-term sustainable revenue.
The Company continues its market share growth trajectory in Canada, moving from a 3.9% market share position in January 2021 to a 7.7% market share position in September 2021, securing the #4 position among Canadian LPs, according to HyFire. Over the same period—Aurora Cannabis’ share of the market dropped from 8% to less than 4%. Tilray’s fell from just under 20% to ~14%.


Local Roots — Opens in Marlborough, MA. The Marlborough shop is the company’s third dispensary location, including outposts in Fitchburg and Sturbridge. Local Roots runs cultivation and manufacturing facilities in Barre and Framingham.


There Could be a Shortage of Cones for Pre-rolls Due to Supply Chain Issues. According to Alen Nguyen, CEO of supply chain management platform MainStem, the majority of the world’s cones, regardless of what company ends up sticking their labels on them, are assembled by hand in “less than 10” factories in Indonesia. The rest are handmade in India, for the most part, with just a few exceptions. Rolling papers, in general, are mainly produced in factories in Europe, India and China, with the majority coming from European countries like Spain, France, Czech Republic and other continental nations. Being the COVID era, this means that in Indonesia, specifically, there have been factory closures and work stoppages since the beginning of the pandemic. This has led to a backlog in production and order fulfillment at a time when demand for cones has rapidly increased. Add to that a global shipping slowdown, and cones intended for Cannabis have become the latest casualty of the current supply chain meltdown.

Hervé’s Luxury Edibles Debut In California. In this interview, CEO Sebastien Centner goes into more detail on what consumers can expect from Hervé in the nearer and longer-term futures, as well as some detail on the future of the luxury segment in cannabis consumer packaged goods, which he sees as bright.

🧔People | 💻Hiring

Curaleaf — VP, Investor Relations (Chicago)

Buds Goods & Provisions — Sales Director (Worcester, MA)

Ripple — Marketing Director (Westminster, CO)

Ember Valley — GM of Production (Redding, CA)


Why Now Is a Great Time to Invest in Marijuana

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