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🌿Industry

Aurora Cannabis leads Canada in market share decline while smaller companies gain, report says. Aurora surrendered a greater share of Canada’s recreational market last year compared to rival licensed producers – with Canopy Growth not far behind – as the companies look to get back on track after a woeful 2020 that brought major financial losses. Data compiled by ATB Capital Markets, an investment banking and financial services firm, and digital retail platform Hifyre – details a shake-up among Canadian producers of all sizes in terms of adult-use market share. Aphria and Tilray, once united in a merger deal, will control ~19% of the Canadian recreational cannabis market, according to the report. That’s down from a previous estimate of 22%. Aurora led all licensed producers with 18.2% overall market share in Q1 2020, but that share fell to 7.4% in the Q1 2021. The report attributed the fall to a declining share of dried flower sales for Aurora.

Border weed: How the hometown of tater tots became a cannabis capital. Ontario, Oregon, has nine dispensaries for 11,000 residents. But most of their customers are coming from Idaho. The small agricultural town — best known for Ore-lda’s creation of the tater tot in the 1950s — is just a 50-minute drive from Boise, Idaho. It sits at the edge of the Treasure Valley, where more than 700,000 people — 40% of Idaho’s population — reside. Marijuana remains illegal in Idaho. In fact, it is one of only two states left in the nation that bans all forms of cannabis, including hemp and CBD products. In the year and a half since Ontario began allowing weed sales, nine dispensaries have opened. It’s estimated that the city will generate $120—$130M in annual sales when the cannabis industry is fully up and running — that’s more than 10% of Oregon’s sales in 2020.

After “Green Rush,” Canada’s Legal Pot Suppliers Are Stumbling. Most marijuana producers in Canada are still reporting staggering losses two and a half years after legalization. Analysts say one reason the sunny projections have failed to materialize is the tightly regulated distribution system introduced by Canada, which largely bans advertising and marketing. The halting roll out of stores in some provinces — particularly Ontario — is also a factor. Plus, surveys have suggested that many Canadians are simply not interested in adopting a new vice.

Largely disappointed at home, some of the larger growers in Canada have pointed to foreign markets, particularly for medical marijuana, as their next great hope. But many analysts are skeptical. Mexico’s recent move toward creating the world’s largest legal market could doom most marijuana growing in Canada, said Brent McKnight, a professor at the DeGroote School of Business at McMaster University in Hamilton, Ontario. Trade agreements will likely make it impossible for Canada to stop imports from Mexico while Mexico’s significantly lower labor costs and warmer climate potentially give it a competitive advantage.

Americans overwhelmingly say marijuana should be legal for recreational or medical use. As more states, including Virginia and New York, continue to legalize marijuana, an overwhelming share of U.S. adults (91%) say either that marijuana should be legal for medical and recreational use (60%) or that it should be legal for medical use only (31%). Fewer than one-in-ten (8%) say marijuana should not be legal for use by adults. The new survey, conducted by Pew Research Center from April 5-11, 2021, comes as congressional Democrats consider legislation that would decriminalize marijuana nationally. Views of marijuana legalization have changed very little since 2019.

Illinois Gets More Tax Revenue From Marijuana Than Alcohol, State Says. Illinois took in more tax dollars from marijuana than alcohol for the first time last quarter, according to the state Department of Revenue. From January to March, Illinois generated about $86,537,000 in adult-use marijuana tax revenue, compared to $72,281,000 from liquor sales. If the trend keeps up, Illinois could see more than $1 billion in adult-use marijuana sales in 2021. Last year, the state sold about $670M in cannabis and took in $205.4Mn in tax revenue.

Subleasing likely to provide a path for out-of-state companies into Arizona’s recreational cannabis market. With the January launch of Arizona’s adult-use marijuana market, insiders predict strong growth in the number of out-of-state companies using a backdoor method to enter the burgeoning recreational industry there: subleasing space in large cultivation or manufacturing facilities. The practice will allow out-of-state brands – and, to a lesser extent, Arizona marijuana startups – to tap into what is expected to be a large and rapidly growing market. Under Arizona’s cannabis regulations, the 130 existing marijuana business license holders – and the upcoming 26 social equity licensees – can apply for recreational permits to run both cultivation and manufacturing facilities to supply their storefronts. Those cultivation and manufacturing centers don’t have size limits, meaning each license holder can build them out as large as they want – and then sublease space to other companies wanting to grow cannabis, manufacture their own edibles lines or produce other products. To be sure, this isn’t a new phenomenon in Arizona: Multistate operator Harvest has been subleasing space at some of its facilities since 2017.

LivWell running Colorado’s first-ever marijuana retail ads on TV. Marijuana retailer LivWell Enlightened Health is running a television advertisement on Denver NBC affiliate KUSA, marking a key step toward cannabis promotions in mainstream media. The commercial is a first for Colorado, according to the Denver Business Journal. The ads, which portray positive testimonials about Denver-based LivWell by paid spokespeople, do not use the words “cannabis” or “marijuana” and do not include images of cannabis products or LivWell stores. The promotions comply with Colorado marijuana regulations by ensuring that no more than 28.4% of the broadcast audience will be younger than the legal age to purchase cannabis, according to the Business Journal. Lord told the news outlet that the promotion was an attempt to build LivWell’s brand and reach consumers in the fast-growing, 55-and-older segment.

Fire & Flower Releases World's First Non-Fungible Toke in Celebration of 420. Fire & Flower Holdings (TSX: FAF) in collaboration with artist Amr Elkouedy, Angry Butterfly, has created an original piece of digital art using Non-Fungible Token (NFT) technology. The piece is titled Non-Fungible Toke, in playful reference to 420, the annual celebration for cannabis enthusiasts on April 20. The digital artwork is a looping billow of multi-coloured smoke encased in glass, similar to a display case found in an art gallery or museum. The bidding will start at $4.20 today on Rarible and close on April 20, 2021 at 4:20 p.m. EDT. All proceeds from the sale will be donated to Second Harvest, the largest food rescue charity in Canada, and Less to purchase a carbon offset and help neutralize the carbon footprint of blockchain technology. The highest bidder of Non-Fungible Toke will have ownership of the digital artwork and it cannot be replicated or reproduced, due to the Ethereum blockchain network that supports it.

Reimbursed sales of medical cannabis in Germany grew by 34% in 2020. The National Association of Statutory Health Insurance Funds (GKV), whose members insure 90% of the German population have released the data on reimbursed medical cannabis usage covering the entirety of 2020. The new data reveal that the reimbursed sales of medical cannabis were worth €165M in 2020. The GKV have released data showing that the market for medical cannabis in Germany continued to grow in 2020, increasing by 34% compared to 2019 excluding the newly added product Epidiolex. Sales reached a new record in Q4 albeit by a slim margin, totaling €43M. This does not include the sales of cannabis which were paid for privately.

Other highlights:

Uber CEO says company could get into cannabis delivery

Denver Poised to Approve Cannabis Delivery & Social Lounges

Michigan marijuana sales reach record $115.4M in March

Canada Cannabis Sales Doubled In 2020, Hitting $2.6B: Here’s What’s Next

280E is a political weapon targeting marijuana companies, but there may be a fix

New Mexico Governor Signs Marijuana Legalization Bill

Majority Of Connecticut Residents Back Marijuana Legalization And Expungements, Poll Finds As Reform Bills Advance

In March, patients spent an average of $880,000/day on medical marijuana purchases

Overwhelmed by all the non-THC cannabis compounds? Our weed guru breaks it down

💵Deals

Trulieve — Acquires Three West Virginia Dispensary Permits, Solidifying Position in the State. Trulieve acquired Solevo Wellness West Virginia LLC (Solevo) and its three West Virginia dispensary permits for $650,000. Solevo was awarded two permits in Morgantown and one in Parkersburg in January 2021 as part of the West Virginia application process.

Jushi — Acquires Dalitso LLC Facility and Land in Prince William County, VA. The acquisition includes a 93,000 sq. ft. facility, operated by its wholly-owned subsidiary and Virginia-based pharmaceutical processor, Dalitso, together with approximately nine acres of surrounding land in Prince William County, Virginia, for ~$22M. The Acquisition, together with Dalitso’s planned buildout of the Facility, will enable Dalitso to efficiently produce a consistent supply of medical cannabis products as patient access improves and as the medical cannabis program matures and expands.

Connected Cannabis — raises $30M to bring its designer weed strains to more states. The company raised $30M in debt and equity financing. This comes after the company raised a $25M Series A in 2019. The new round was led by existing investors including Navy Capital and One Tower Group. Emerald Park Capital, an affiliate of Bryant Park Capital, and Presidio View Capital also participated. Currently, Connected Cannabis Co. operates cultivation and retail facilities in California and Arizona. With the additional financing, it intends to expand elsewhere. The company says it plans to focus on states with robust cannabis cultures and promising outlook for growth, such as Nevada and Michigan.

LEUNE — raises $5M from Casa Verde, Rich Paul, Carmelo Anthony and John Wall. National Basketball Association stars John Wall and Carmelo Anthony are new investors in a cannabis company. The pair helped California-based LEUNE raise roughly $5 million in a round that includes NBA agent Rich Paul, entertainer La La Anthony, music manager Anthony Saleh (whose clients include Future and Nas) and venture capital firm Casa Verde Capital. In addition to expanding its products, LEUNE said it wants to enhance its social justice initiatives. The firm will use the new investors to raise awareness around inequality and injustices throughout the sector. LEUNE has partnerships with organizations including The Last Prisoner Project, Eaze Momentum and the Floret Coalition.

Jaleel White x 710 Labs. Actor Jaleel White, known for playing Steve Urkel on the 1990s sitcom "Family Matters," is partnering with 710 Labs on his new line, itsPurpl. It's set to launch in California on April 20, or 4/20, and includes variants of the strain Purple Urkle. White said the project comes after 20 years of hearing about his fictional TV character displayed on cannabis products. He wrote on the new brand's website that he met his eventual business partner on a flight to Oakland in 2018.

Toast / Topricin — Strategic Partnership. Topical BioMedics, Inc. secures exclusive partnership with Toast. This partnership will introduce the wellness benefits of Full Spectrum Hemp CBD to customers of Topical BioMedics, who rely on Topricin, the company’s line of topical, homeopathic pain relief creams to help manage and treat their pain. Topricin is available in over 40,000 locations nationwide.

Boston Cannabis Delivery Company, Zip Run, Secures $2.3M Seed Funding. The round is being led by Mollitiam Capital. Zip Run is on track to become the first adult-use cannabis delivery company in Boston. Zip Run is completing the final approvals for adult-use delivery of cannabis in Boston, making the startup the first licensed delivery service in the city limits. The company will hold both marijuana courier and marijuana delivery operator licenses in Massachusetts – only available to social equity applicants in the state. With both licenses, Zip Run can pick up and deliver through dispensary partners and buy wholesale products from cultivators for delivery through its Boston warehouse opening this summer.

Keef Brands — Expands to Missouri, Ohio and Maine. Along with this most recent expansion to Ohio, Maine and Missouri, Keef Brands is widely available at more than 1,000 dispensaries and delivery services in California, Colorado, Arizona, Oklahoma, as well as Puerto Rico.

Forian (Nasdaq: FORA) — $12M PIPE. Forian, a provider of software and technology-enabled services for the healthcare and cannabis industries, has entered into a securities purchase agreement with a select group of institutional and accredited investors to raise gross proceeds of $12M resulting from the sale of 1,191,743 shares of its common stock at an average purchase price equal to $10.21/share. The Company expects to use the proceeds of the PIPE financing for data acquisition, working capital and general corporate purposes, including potential acquisition or investment in technologies, intellectual property or businesses that complement the Company's business.

HEXO — Filing of $1.2B Preliminary Base Shelf Prospectus. “We made the decision to file this new base shelf prospectus and registration statement to provide maximum flexibility as we continue to pursue strategic initiatives in both the United States and Canada. We have now started to deploy capital in the United States, are remaining active in M&A and are in ongoing discussions with potential non-beverage CPG partners which we expect will require additional capital as we continue to execute on our growth and expansion strategy.” — HEXO CEO and co-founder Sebastien St-Louis

The Flowr Corporation — Formation of Strategic Review Committee and Corporate Update with Refocused Business Strategy. Strategic Review Committee has commenced process of rightsizing headcount for immediate cost reductions, reducing annual operating expenses by ~$2M, excluding restructuring charges. The Company maintains a strong liquidity position with ~$23.5M in cash and cash equivalents as of March 31, 2021 with a $100M base shelf prospectus available. Flowr has disposed of non-core licenses and operations in offshore jurisdictions (Australia, Uruguay and Spain). The Company expects ~$5M from non-core asset sales, including approximately 4 acres of industrial land located in Kelowna. The Company focused on being an ultra-premium and premium dry flower producer in Canada and the E.U.

Other highlights:

Lowell Farms and Ascend Wellness Holdings (AWH) — Strategic Licensing Agreement, Bringing Lowell Smokes to Illinois and Massachusetts

Cresco Labs — Closes Acquisition of Bluma Wellness, Expands Into Florida

Vireo Health — Completes Expansion of Cannabis Cultivation Facility in New Mexico & opens two Green Goods dispensaries in Albuquerque and Las Cruces

Calexo’s “Watercolors” Cannabis Beverages to be Produced at Tinley’s Long Beach Facility

📄Earnings

TILT Holdings — Q4 and CY2020 Financial Results

Q4 — Revenue of $42.3M, up 8.1% Q/Q and 35.4% Y/Y. 26.7% GM, down 460 bps Q/Q and up 200 bps Y/Y. Positive Adjusted EBITDA for the fourth consecutive quarter at $4.5M. Cash and cash equivalents of $7.4M, a $3.1 million increase Q/Q.

🏬New Store Openings / New Product Launches

Columbia Care — Launches Medical Cannabis Capsule in UK; Provides More Precise Dosing Option and Longer Lasting Therapeutic Benefits for Physicians and Patients. The patent-pending, proprietary capsules were first developed and successfully commercialized in the United States by Columbia Care. They incorporate a portfolio of primary and secondary cannabinoids and are available in a number of formulations with various THC and CBD doses. These dosing options enable prescribing physicians to offer proven, cannabis-based medical solutions with a degree of precision previously unavailable in the UK market.

Cresco Labs — Expands Branded Edibles Portfolio With Launch of Wonder Wellness Gummies. The new low-dose edibles are enhanced with botanicals to complement the overall cannabis experience, and their simple packaging communicates desired effects so wellness-minded category newcomers can consume with confidence to add cannabis as a part of their daily lifestyles.

Verano — Opening of Second Zen Leaf Dispensary in New Jersey, Cultivation Expansion Underway. Zen Leaf Neptune is the Company’s first new retail storefront to open in New Jersey since the signing of adult-use cannabis reform bills by the Governor, second overall in the state. Verano has one additional Zen Leaf dispensary location in development, which it plans to open Q2 2021. Verano is actively expanding its state-of-the-art 120,000 sq. ft. cultivation facility in Readington NJ.

Houseplant — Launches at The Apothecarium's California Dispensaries. The Apothecarium is offering cannabis from Houseplant, the cannabis lifestyle brand founded by Seth Rogen and Evan Goldberg, at its five California dispensaries. The Apothecarium has three San Francisco locations (Castro, SOMA and Marina) and one each in Berkeley and Capitola (outside of Santa Cruz). Houseplant is launching with three flower strains, all of which will be available at The Apothecarium, including: Diablo Wind (sativa), Pancake Ice (sativa) and Pink Moon (indica). Like their founder's groundbreaking film "Pineapple Express", Houseplant strains are named after weather phenomena. Each strain will be sold in a custom tin.

GTI — Launching Cann in Illinois Ahead of 4/20. Cann is now available at all Rise™ Illinois dispensary locations (excluding Mundelein), as well at Ascend, Moca and MedMen retail stores. Rise Joliet (Colorado), Rise Lake in the Hills and Rise Niles will also host a Cann pop-up store through August with an on-site Cann brand ambassador to answer questions about the newly available cannabis social tonics.

Truss Beverage Co. (Molson Coors Canada and HEXO JV) — launches new cannabis-infused beverage category with new products for summer. House of Terpenes™ Valencene & Sparkling Tonic, XMG™ Citrus and XMG™ Watermelon, Veryvell™ Honey Green Iced Tea, Little Victory™ Lemonade, Mollo™ 5 Lime.

Look Inside The New Cannabis Consumption Tasting Room And Spa From Papa & Barkley, Humboldt Social. Papa & Barkley Social is the new weed consumption space from the minds of cannabis wellness brand Papa & Barkley and Northern California restaurant group Humboldt Social. Expect a soft opening party on April 20, 2021, with a grand opening on May 6, 2021. Patrons 21-and-up will find a unique cannabis hospitality concept with a curated dispensary plus luxury day spa, food truck, and yes, a legal, social-distanced outdoor cannabis consumption lounge. The 7,000-square-foot lounge and dispensary is located inside Papa & Barkley’s massive production and manufacturing space. The space was a labor of love: Papa & Barkley reconstructed a shuttered K-Mart, turning it into a high-tech, flourishing cannabis production facility. And now, a dispensary storefront and tasting room.

💻Hiring

Amuse — DevOps Engineer (Culver City, CA)

Pacific Dutch Group — Brand Manager (Los Angeles, CA)

Pax Labs — Controller (San Francisco, CA)

Kings Garden — In-House Counsel (Palm Springs, CA)

👋 `Newsletter curated by` `Dai Truong.`

Highly Objective

🌴CA Brands Secure Funding – Connected…