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🌿Industry

Uber Eats to allow orders for cannabis in Ontario.

Uber Eats started allowing cannabis retailer Tokyo Smoke to list on its marketplace last Monday. Customers can place orders from the Uber Eats app and then pick it up at their nearest Tokyo Smoke store. The partnership will help Canadian adults purchase safe, legal cannabis, helping combat the underground illegal market which still accounts for over 40% of all non-medical cannabis sales nationally, Uber said on Monday.

The new German government plans to legalize cannabis. The parties in the new coalition have agreed to legalize the sale of cannabis — as long as it is sold in licensed establishments that can tax it properly and ensure both quality control and that it is sold only to adults. After four years, the parties vow to re-evaluate the law and its effect on society. Legalizing cannabis could bring Germany annual tax revenues and cost savings of about 4.7 billion euros ($5.3B) and create 27,000 new jobs, a survey published last week found. The European market is projected to grow to 3.2 billion euros by 2025, up from 403 million euros at the end of 2021, according to research from Prohibition Partners. Such growth could boost big U.S. and Canadian cannabis firms, as well as the fledgling German industry. However, it would hard for Germany to become a big producer nation given high overheads and inclement weather.

German cannabis firm shares pop after new government pledges to legalize. Shares of German cannabis company SynBiotic rose sharply on Thursday shortly after the incoming government pledged to make the drug legal. The Munich-based company’s shares were up 33% to 29 euros ($33) on the Frankfurt stock exchange. The company now has a market cap of over 100 million euros. A deal was reached on Wednesday between the center-left Social Democratic Party, the Greens and the Free Democratic Party that will see them govern together in a three-way coalition for the first time. The so-called “traffic light” coalition agreed on plans to legalize the sale of cannabis for recreational use to adults in licensed shops. Led by Lars Muller, SynBiotic wants to use cannabis compounds to treat conditions like chronic pain, stress and sleep issues.

💵Deals

Cresco Labs — Closes Acquisition of Three Pennsylvania Dispensaries. The company closed the previously announced acquisition of Bay, LLC d/b/a Cure Penn. The three operational dispensaries are located in in Lancaster, Phoenixville, and Philadelphia. Cure Penn’s dispensary locations are incremental and complementary to Cresco Labs’ five existing Sunnyside dispensaries in Pennsylvania.

Goodness Growth Holdings — Closes Divestiture of Arizona Dispensary License for $15M. The transaction also includes related cultivation licenses for both medical and adult-use, only one of which is currently operational at the Company's 18-acre outdoor farm in Amado, AZ, south of Tucson. Goodness Growth also entered into a separate cultivation management services agreement with the acquirer, Copperstate Farms, LLC, which will allow the Company to continue cultivating and selling cannabis products through the medical and adult-use wholesale sales channels in Arizona. The cultivation management services agreement has an initial term of five years and will be subject to renewal for up to 20 years.

Goodness Growth Holdings — Closes Purchase of Charm City Medicus Dispensary in Baltimore, Maryland. The total consideration for the transaction at closing was $8.0M ($4.0M cash, $2.0M stock, and $2.0M promissory note). Goodness Growth shares issued in conjunction with the transaction are subject to a one-year lock-up agreement.

Gage Growth — $55M Senior Secured Debt Financing (Greater of 7.00% + prime and 10.25%). The Term Loan bears interest at a per annum rate equal to the greater of 7.00% plus prime rate and 10.25%, payable monthly in arrears, with a maturity date of November 30, 2022. The Term Loan is secured by a first lien on all Company assets.

📄Company Updates / Earnings

Ayr Wellness — Q3 2021 Results. Revenue up 111% Y/Y to $96.2M, up 5% sequentially. Adjusted EBITDA of $26.0M, up 40% Y/Y and down 5% sequentially. GAAP Operating Loss of $8.9M Included Non-Cash, One-Time Expenses, and Non-Operating Adjustments totaling $34.9M. Q4 2021 Guidance — 10% Sequential Revenue Growth with Adjusted EBITDA Flat Sequentially. Revising 2022 Adjusted EBITDA Target to $250-300 Million, and maintaining 2022 Revenue Target of $800 Million to reflect revised timing for capital projects and recent changes in Wholesale market conditions. The Company also unveiled a new corporate identity and will convert all retail stores to the “AYR” brand.

Planet 13 — Q3 2021 Financial Results. Revenue of $33.0M, up 45% Y/Y. Adjusted EBITDA of $3.5M (10.6% margin). Cash of $73.7M as of 9/30/21.

SLANG Worldwide — Q3 2021 Financial Results. Revenue $10.1M, compared with $7.9 million in Q3 2020. Cash of $3.5M as of 9/30/21 as compared to $9.7M at June 30, 2021. September cash balance is inclusive of $5.0M of transaction costs paid at closing of the HiFi acquisition.

Audacious — FY Q2 2022 Financial Results. Total revenues of $2.3M (53.5% GM), up 31% from $1.7M in FY Q1 2021. Net loss of $(4.3M), or $(0.02) per share, compared to a net loss of $(9.7M), or $(0.04) per share in FY Q1 2022. Cash of ~$1M as of 9/30/21.

Glass House Brands — Video Footage of SoCal Facility. Detailed video footage of its 5.5m sq. ft. cultivation facility currently under renovation in Camarillo, California (SoCal facility). Phase I expansion of the SoCal facility is expected to expand the Company’s greenhouse footprint by ~1.6 million square feet and increase annual biomass production by ~180,000 pounds annually. The targeted total Glass House Brands long-term footprint is 6 million sq ft and projected total biomass production of 1.7 million pounds.

Eaze — 135% increase in deliveries on Green Wednesday. As compared to a typical Wednesday in 2021. It was the Company’s second biggest day (which was 4/20) in 2021 by both number of deliveries and sales.

MedMen — Prevails in Lawsuit Against Former CFO James Parker. In 2019, Parker filed suit against MedMen, alleging wrongful termination, breach of contract and retaliation, seeking in excess of $20,000,000.00 in damages. MedMen has always maintained that the lawsuit and claims were baseless and without merit. The jury agreed, ruling in favor of MedMen on all claims and determining MedMen does not owe Parker any damages. MedMen also asserted affirmative claims against Parker. The jury found that Parker breached his contract, his fiduciary duty, his duty of loyalty, misappropriated trade secrets, and committed conversion, but that there was no harm/damage resulting from his misconduct.

Bloom Farms — Investor Loses Fraud Lawsuit After Destroying Evidence. A Bloom Farms investor lost his fraud and retaliation lawsuit against the cannabis company and its executives, when a Delaware judge threw out the case as a penalty, saying he repeatedly lied about electronic evidence, deleted relevant text messages, and violated court orders. Vice Chancellor Morgan T. Zurn dismissed the case from Delaware’s Chancery Court, nine months after she let Jeff Menashe advance claims that senior leaders of Bloom Farms defrauded him with cooked books and wrongly ousted him from the board for challenging its series E financing round. Menashe testified he didn’t know what a “litigation hold” was, falsely said certain laptops had been wiped and donated, and insisted he “did not text about business matters” until, caught red-handed, he admitted he had deleted texts, Zurn said in a Nov. 19 ruling.

🏬Retail

Curaleaf — Opens 9th AZ Location in Phoenix (112th total). Curaleaf has additional locations in the Phoenix-Metro area including Camelback, Central, Midtown and Pavilions with additional dispensaries in Glendale and Gilbert.

Curaleaf — Expands Retail Presence in Florida with Spring Hill Dispensary. This is the Company's 113th dispensary nationwide and its 38th in the sunshine state.

Trulieve — Opens 109th FL Location in Bradenton. The Bradenton location is Trulieve's 109th in the state.

Verano — Opens 39th MÜV dispensary in Melbourne, FL. The is the Company’s 90th location nationwide.

🌱Product

Trulieve — Launches TruTonic, Florida's First Edible Drink Mix. Created from the same process that created TruPowder, TruTonic combines tropical flavors, fast-acting relief, and mild carbonation – all in a conveniently pre-dosed 5mg package.

Trulieve x Bhang. In September 2021, Bhang and Trulieve announced an expanded licensing agreement to manufacture and distribute Bhang's THC-infused chocolate products in all Trulieve markets, rolling out first in Massachusetts, and now Florida.

TechCrunch — Gift Guide. Puffco Budsy, Dynavap, GPen Dash, Blazy Susan, OTTO Grinder, Storz & Bickel Mighty+, Puffco Peak Pro, Hitoki Trident V2, Stündenglass Kompact.

🧔👩People | 💻Hiring

MedMen — Michael Serruya as Chairman and Interim CEO. Serruya succeeds outgoing Chairman and CEO Tom Lynch, who held the position since 2020 and oversaw the Company’s operational turnaround. Serruya joined MedMen’s board in August 2021 as part of a $100 million investment in the Company by Serruya Private Equity to expand its operations in key markets and identify and accelerate further growth opportunities across the United States. Serruya is a seasoned cannabis investor with extensive retail expertise, having previously served as CEO of Coolbrands® (then home to CPG brands including Weight Watchers®, Eskimo Pie®, Tropicana® and Godiva® Ice Cream) and Kahala Brands® (home to global QSR brands including Cold Stone Creamery®, Taco Time® and Blimpie Subs®).

🎙️Interviews

CIN — Q3 2021 Financial Review of the Big 5 MSOs (ft. Nick Gastevich)

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🚙 Uber Eats lists Cannabis (Tokyo Smoke) on…