💨 Old Pal raises $8M from Turning Point Brands

Red White & Bloom releases Q4 and FY 2020 Financial Results (finally). Jushi to transition to Domestic Issuer Status in U.S. GrowGeneration acquires Mendocino Greenhouse and Garden Supply.

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Cannabis licenses are sometimes compared to state gambling license so check out this excellent Ringer article on Las Vegas before it became the Las Vegas we all know ➡️

A Mirage in the Desert — Las Vegas was at a crossroads when Steve Wynn’s mega-casino opened in 1989. Its success upped the ante on luxury and changed how Americans pursue pleasure and entertainment on the Strip.


🌿Industry

Biden's drug czar nominee consulted for cannabis company last year, ethics disclosure shows. President Joe Biden's drug czar pick, Dr. Rahul Gupta, spent nine months last year working as an adviser to Holistic Industries, a Maryland-based cannabis company. Gupta, who was formally nominated to be the director of the White House Office of National Drug Control Policy earlier this month, advised Holistic Industries, a private MSO with processing facilities, dispensaries, and products like edibles and a Jerry Garcia-themed marijuana line. The disclosure says he was directly paid $10,000 for his services. A White House spokesperson said the prospective drug czar's work pertained to medical marijuana compliance efforts. While Gupta was serving as West Virginia's state public health officer, the state enacted a law that allowed residents to use marijuana for a certified medical use. Gupta signed a federal ethics agreement that states he will not participate "personally and substantively in any particular matter" involving Holistic Industries for one year after he last provided services.


💵Deals

Turning Point Brands — Invests $8 Million in Old Pal Through Convertible Note. Turning Point Brands, Inc. a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, announced today that the Company has completed a $8 million strategic investment in Old Pal, one of the most recognizable and top-selling brands in the cannabis lifestyle space. TPB invested in the form of a convertible note which includes additional follow-on investment rights.

GrowGeneration — Acquires Mendocino Greenhouse and Garden Supply, Expands Footprint in California's Emerald Triangle. As one of the original garden centers in Mendocino, sales are expected to surpass $8 million annually. Mendocino Greenhouse and Garden Supply has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services since 2005. Mendocino Greenhouse and Garden Supply's team of eight employees will join GrowGen's team of over 600 grow professionals as part of the transaction, while Mr. Halfacre will stay on as the garden center's General Manager.

Schwazze — Closes Acquisition of Southern Colorado Growers. The acquisition includes 34 acres of land with outdoor cultivation capacity, as well as indoor, greenhouse, and hoop house cultivation facilities and equipment. The consideration for the acquisition is $6.8 million for the business and $4.5 million for the real estate and farm assets.  Total consideration of $11.3 million was paid as $5.9 million of cash and $5.4 million in Schwazze common stock upon closing. Schwazze has major expansion plans for SCG, which includes the buildout of cultivation capacity over the next four quarters. SCG produces premium flower with approximately 30 strains and has won multiple Connoisseur Cup awards for select strains in 2020 (Best Hybrid Flower – Banger & Mac) and 2021 (Best Rec Hybrid – The Mac). 


📄Company Updates / Earnings

Red White & Bloom — Q4 and Full Year 2020 Financial Results

  • Adjusted Sales for the full year 2020 were $37.8M

  • Revenue in Q4 2020 increased 158% to $15.7M, compared to $6.1M in Q3 2020

  • During the year ended December 31, 2020, the Company incurred a net loss of $18.6M vs $12.5M in 2019. The increase in net loss of $6.1M was mainly attributable to the net effect of a number of non-cash items, including an increase of $15.3M in depreciation and amortization, a one-time listing expense of $31.7M, a $9.8M provision in G&A for a possible contingent earn-out payable and an offset in part by a gain of $53.6M on the revaluation of the Company’s put/call agreement with PharmaCo.

  • Raised in excess of $110M, in both debt and equity since January 1, 2020 and has cash on hand of ~C$41M as of July 2, 2021. RWB has funded $75M to PharmaCo, a Michigan based licensed operator that has acquired 18 provisioning centers (dispensaries) and multiple cultivation centers. PharmaCo sales in 2020 were ~C$70M with 8 stores operating as of the end of 2020

Jushi Holdings — To Transition to Domestic Issuer Status in United States Effective January 1, 2022. Since more than 50% of the Company's issued and outstanding subordinate voting shares were directly or indirectly owned by shareholders of record domiciled in the United States on June 30, 2021, Jushi no longer meets the definition of a "foreign private issuer" under United States securities laws. As a result, the Company will be deemed a U.S. domestic issuer under United States securities laws and will be subject to SEC reporting requirements applicable to U.S. domestic companies no later than January 1, 2022. These U.S. reporting requirements will require Jushi's financial statements and financial data to be presented under U.S. GAAP. Jushi has established a task force of internal and external resources to manage the transition.

Plus Products — Releases Preliminary Unaudited Q2 2021 Revenue

  • Reached $4.8M in net revenues for Q2 2021, up 92% Q/Q


🏬Retail

Parallel/goodblends — $25 million medical cannabis facility to bring “Budding Industry” to San Marcos, TX. On April 19, 2021, construction began on three buildings, one retail and two industrial, totaling approximately 63,000 square feet. Goodblend expects to complete the project near the beginning of next year. At the end of the last legislative session, Texas Governor Greg Abbott signed multiple bills that expand who qualifies for medical cannabis. Effective September 1, patients who have Post Traumatic Stress Disorder or any form of cancer now qualify to access medical cannabis. The legislation also doubles the amount of THC concentration allowed, from 0.5% to 1%.


🌱Product

Houseplant — Pocket Case.

Meet Rose, the Edibles Brand Championing a New Kind of Cannabis Ecosystem. Known for its produce-driven delights and culinary collaborators, Rose has its sights on sustainability from the ground up.

Sunderstorm — Introduces First-of-Its-Kind Scientifically-Backed Personal Dosing with NANO5 DNA. NANO5 DNA, a premium line of sublingual products scientifically tailored to match a consumer's unique DNA. Getting the ideal experience from cannabis is more than just choosing the right strain. Everyone experiences cannabis products differently based on their own unique endocannabinoid system. For some, the active compounds in the plant exert relaxing, calming effects. For others, cannabis can be a stimulant or in some instances cause anxiety. NANO5 DNA is the first THC product to scientifically align with a consumer's unique genetic makeup to maximize the ability to enjoy an ideal experience with cannabis. To personalize the process of selecting an ideal cannabis product, Sunderstorm partnered with EndoCanna Health, the creator of the patented EndoDNA Test. Leveraging the latest advances in the DNA testing industry, the EndoDNA test analyzes more than 700k SNPs (Single Nucleotide Polymorphisms) that are specific to or associate with the endocannabinoid system. Upon analyzing a consumer's DNA, EndoCanna Health issues a secure, in-depth report that identifies their unique genotype, maps potential risks and positive outcomes, and aligns their DNA with the latest research to predict how they will respond to specific cannabinoids and terpenes. Then, EndoCanna Health matches them to the ideal NANO5 DNA formulation.


🧔People | 💻Hiring

TILT — adds Dana Arvidson as COO. Arvidson joins TILT with more than 20 years of experience in a broad set of roles focused on achieving growth objectives and enhancing operating results. Most recently, Arvidson served as VP Corporate Development for PhyNet, a physician practice management company. In this role, he led acquisition, practice valuation, negotiation of terms, and integrating practices into PhyNet’s operating platform. Previously, Arvidson was VP Capital Markets and Investor Relations for The First Marblehead Corporation, where he executed securitization transactions, developed the company’s equity and debt investor base and helped facilitate the successful sale of non-core assets.

Cronos Group — Senior Director, Financial Reporting (remote)


🎙️Interviews

How It Started: Problem Solving with Raymond Nobu Chang, CEO of Agrify


👋 Highly Objective is curated by Dai Truong. Third-party information presented here and links to third-party content are for informational purposes only and are not intended as a recommendation, offer or solicitation for the purchase or sale of any financial instrument, security or investment.  The information provided is not warranted as to completeness or accuracy and is subject to change without notice. Linking to third-party sites in no way implies an endorsement or affiliation of any kind between Arlington Capital Advisors, LLC, or its affiliates and any third party.  The information in this blog constitutes my own opinions (and any opinions posted by guest bloggers from time to time) and it should not be regarded as a description of services provided by Arlington Capital Advisors, LLC or any affiliate.