🏪 Canopy Growth Divests Canadian Retail Operations four years after $205M acquisition of Tokyo Smoke (July 2018).
🏪 Canopy Growth Divests Canadian Retail Operations four years after $205M acquisition of Tokyo Smoke (July 2018).
Sanity Group raises $37.6M Series B. Northern Lights Acquisition Corp. completes Business Combination. Battery charge dropped against Abner Kurtin. AWH names Co-CEOs. Adult-use sales start in Vermont.
👥 If you will be at Hall of Flowers early, please join myself and friends at Paradise Club and Alpine IQ for drinks tomorrow (Tuesday, 10/4) from 5-8p. You can just show up but it would be helpful for planning purposes if you RSVPed here.
🌿 Industry
Battery charge dropped against former Ascend CEO, Abner Kurtin. A battery charge against Abner Kurtin, Co-Founder and former CEO of Ascend Wellness Holdings, was dropped on Friday after neither the alleged victim nor the witness agreed to cooperate with the police and prosecutor, according to the Miami-Dade State Attorney’s Office. The two also refused to give statements for use in court, according to a spokesperson for the office.
Adult-use Cannabis Sales Start in Vermont.
The line at Ceres — the only store in Chittenden County licensed by the state to sell adult-use cannabis and one of a handful licensed to date in Vermont — was long but quiet. Ceres staff walked the queue to let people know they’d need to show identification upon entering the store, but things were calm and orderly. There was no police presence nor any traffic jams.
New York Attracts 903 Applicants for Cannabis Retail Licenses. The 903 applications were submitted during a one-time, one-month window that closed Sept. 26, with OCM officials planning to approve up to 150 CAURD licenses they plan to distribute to 14 regions throughout the state. The number of licenses in each region is based on population. Applications were limited to those criminalized under prohibition or those who have a direct family member convicted of a cannabis-related offense prior to March 31, 2021 (the date former Gov. Andrew Cuomo signed the Marijuana Regulation and Taxation Act into law). OCM officials are also limiting CAURD licenses to those who have experience owning and operating a successful business in the state.
Tapping the Power of Media to Normalize Cannabis Use, Cannabis Media Council Forms to Drive Education & Awareness through Mainstream Advertising. Cannabis entrepreneurs and brands from coast to coast have joined forces to create the Cannabis Media Council, an organization that will tap the power of mainstream media to drive education and acceptance of the plant. The Council also intends to enlighten and encourage the mainstream outlets around the importance of making inventory available for cannabis-focused advertising. The Cannabis Media Council will launch its first national, multi-channel ad campaign this fall, amplifying the many ways using cannabis has a positive impact on our lives in an effort to normalize consumption. The Council aims to drive larger media inventory through connecting with publishers and educating on the opportunity to evolve their media and associated ad inventory.
CLIO Cannabis Awards — 2022 Winners. Cann won the Brand of the Year Award. CLIO Grand winners included Cann, Weedmaps, Missouri’s Own Edibles and Berliner Verkehrsbetriebe (below). List of other winners here.
💵 Deals
Sanity Group — $37.6M Series B with investment from BAT (British American Tobacco), Redalpine and Casa Verde. Sanity Group was founded in 2018 and has ~120 employees in the medical, consumer health and science sectors now. BAT is leading a $37.6M investment in Berlin-based cannabis company Sanity Group, with existing investors Redalpine and Casa Verde Capital are also participating. Additional investors include Will.I.Am, Alyssa Milano, Scooter Braun, HV Capital, Calyx, TQ Ventures, Atlantic Food Labs, Cherry Ventures, Bitburger Ventures, SevenVentures, GMPVC, Navy Capital and SOJE Capital. This is Europe’s largest cannabis investment round to date. Total funds raised by Sanity Group exceed $100M.
Canopy Growth — Divestiture of Canadian Retail Operations. The Company has entered into agreements to divest its retail business across Canada which includes the stores operating under the Tweed and Tokyo Smoke retail banners. The Company has reached an agreement with OEG Retail Cannabis (OEGRC), an existing Canopy Growth licensee partner that currently owns and operates the Company's franchised Tokyo Smoke stores in Ontario. As part of this agreement, OEGRC has agreed to acquire all of Canopy Growth's corporate stores outside of Alberta as well as all Tokyo Smoke-related intellectual property. The Company has also reached an agreement with 420 Investments Ltd. (FOUR20) pursuant to which FOUR20 has agreed to acquire the ownership of five retail locations in Alberta. Canopy Growth previously acquired Tokyo Smoke (Hiku Brands) for $205M in July 2018.
Northern Lights Acquisition Corp. — Completes Business Combination. With the transaction now complete, the Company has changed its name to "SHF Holdings, Inc." Its Class A Common Stock and warrants will continue to be listed for trading on the Nasdaq Capital Market. The Company also closed on September 28, 2022 a PIPE in the amount of $20.5M of convertible preferred stock and warrants. To offset the reduced PIPE amount, Partner Colorado Credit Union, Safe Harbor's indirect parent (PCCU), agreed to a further amendment to the Unit Purchase Agreement to provide for the deferral of approximately $57M of the $70M due to the Seller at the closing of the business combination. The increase in the Deferred Cash Consideration will provide the Company with additional cash to support its post-closing activities.
House of Puff — Raise Led by Merida Capital. The NY-based luxury smoking accessory company which has been nominated for awards at Benzinga and MJ Unpacked has raised an undisclosed amount from Merida Capital.
Cann — Acquires Sweet Reason, Targeting Mainstream Alcohol Alternative Space. Sweet Reason is a Toronto-based CBD drink maker. According to Cann co-founder Luke Anderson, the company intends to position Sweet Reason as a functional non-alcoholic adult beverage that can scale in mainstream retail channels and is exploring removing CBD from the formulation in order to avoid regulatory hurdles. Beyond M&A, Cann is also looking to bring THC drinks to the mainstream through its own innovations. This summer, the brand launched a version of its core social tonic line made with 2 mg of hemp-derived Delta-9 THC in Minnesota after the state legalized the compound. Although products have only been on sale for a little over a month, Anderson said the line has been off to a strong start in liquor and convenience stores.
The Parent Company — Completes The Acquisition Of Calma. The 3,250 square foot dispensary is one of only eleven stores in the West Hollywood area that is licensed for storefront retail and is surrounded by cultural destinations and tourist attractions in every direction. Since the first closing, the Company has rolled out its full brand offering and recently debuted its Monogram "store within a store" concept, providing consumers a curated experience of the Monogram brand and line of products. In connection with the final closing of the acquisition, The Parent Company issued in aggregate $1.5 million common shares of the Company to equity holders of Calma.
📄 Company Updates / Earnings
Planet 13 — First Harvest Underway at Nevada Cultivation Expansion. Planet 13 has received the necessary approvals to operate its 22,000 square foot Nevada cultivation expansion and the planting of the first harvest from new grow rooms ahead of the previously forecasted timeline of Q4 2022.
4Front Ventures — Launches California Cannabis Brand "Island" in Massachusetts. Following the Company's acquisition in April 2022 of Island, a California-based producer of pre-rolls, flower and concentrate products, the Company began cultivating 11 new Island flower strains at its state-of-art flower facilities located in Holliston, Georgetown and Worcester, Massachusetts. Each strain has been hand selected for its unique genetic lineage, terpene profile, potency, and nose.
MedMen — Rent Contracts Illegal Under Federal Law. MedMen blames Thor Equities for renting to a federally illegal cannabis company and does not want the courts to move its unpaid rent dispute with Thor Equities to a state court from a Federal court. Thor had originally filed the case in New York Federal court because Thor Equities is mostly based in New York. Now the company has said it wants to move the case to California, where MedMen is mostly based.
🏬 Retail
TerrAscend x TRP — Partnership to bring Cookies into PA Market. Strains from Cookies premium genetics will be made available at TerrAscend dispensaries across the Commonwealth and Cookies stores owned and operated by TRP to open in the coming months. Under the terms of the multi-year agreement, TerrAscend will cultivate and manufacture Cookies products in the Keystone State. TerrAscend will launch Cookies products at each of the Company's Apothecarium and Keystone Canna Remedies dispensary retail chains across Pennsylvania (Plymouth-Meeting, Lancaster, Thorndale, Bethlehem, Allentown and Stroudsburg).
Trulieve x Khalifa Kush — Launches in Florida Through Exclusive Partnership. The Khalifa Kush product line will expand to all statewide locations in the coming months. Khalifa Kush products are also available in Trulieve owned and operated locations in Arizona.
Trulieve — Opens Dispensary in Sierra Vista, AZ. The new location will offer a wide variety of popular products including Trulieve brands such as Alchemy, Avenue, Co2lors, loveli, Modern Flower, Muse, and Roll One.
Eaze / Green Dragon — Adds Six Medical Cannabis Dispensaries in Florida, and Launches Vapes and Concentrates. The new dispensaries are in Fort Pierce, Orange Park, Pensacola, Palatka and Tallahassee, continuing its rapid expansion in the Florida market with the goal of opening 30 locations by the end of the year. The vertically integrated company is now offering vape cartridges and concentrates to medical cannabis patients at all stores, in addition to expertly cultivated cannabis flower strains and pre-rolls. Pills, tinctures, and topicals will be arriving in stores by October.
Schwazze — Opens R.Greenleaf in Ruidoso, NM. This store opening kicks off Schwazze's deliberate expansion throughout the state of New Mexico. This new store in Ruidoso brings R.Greenleaf's number of New Mexico retail dispensaries to 11.
SLANG Worldwide — Opens Ceres Collaborative Dispensary in Burlington, VT. Operating under the Company's Ceres Collaborative cannabis group, which brings together SLANG Worldwide and CeresMED, the storefront is located in the heart of Vermont's capital at 190 College Street, adjacent to the Church Street pedestrian mall in downtown Burlington. Centrally located in the city to benefit both local consumers and tourists with its 1,500-square-foot dispensary supported by 20 full-time employees, the dispensary is well-positioned to play a leading role in Vermont's evolving recreational cannabis market which is estimated to reach $265M in annual sales by 2025.
🌱 Product
Heavy Hitters — Launches California’s First THCV-Infused Energy Gummies.
Lights On Energy Gummies are designed to create a clean, energetic high without the edge. The edibles come in a delicious kiwi melon flavor with hints of sour apple—if energy were a flavor, it would taste like this. In addition to producing a perfect high, THCV may produce a less hungry cannabis experience than THC alone: finally, no munchies! Gluten, dairy and nut free, these gummies contain the same world-class cannabis oil found in the Company’s premium vape cartridges because the best extracts create the best edibles.
Lowell Farms — Commences Sales of Its New Preroll: the Lowell 35. Every pack of 35's includes 10 Tall Smokes, each containing a perfect .35g of premium, whole flower. The Company’s entire manufacturing process is fully automated—resulting in a completely redesigned pre-roll format that promises a superior roll every time.
Headset — Launches Bridge Signal, Adding Menu-Sourced Data. Building upon Headset's existing platform, which is powered by transaction data from over 26 POS integrations, the addition of menu-sourced data provides a new layer of real-time competitive intelligence conveniently designed for on-the-go users in a mobile friendly interface. Headset's latest data tool, Bridge Signal, simplifies the cluttered landscape of online menus and limits the time companies spend scraping and collating menu data. Bridge Signal features a social media-like activity feed that tracks stock-outs, price changes, promotional activity and product arrivals throughout a specific region in real-time. The activity feed is accompanied by a retailer overview feature that allows users to dig deeper into the product assortment of nearby stores. CEO Cy Scott noted that, on average, 2377 new products are introduced per market, per month. In California alone, there are 1197 brands competing across 971 stores.
Leafly — Introduces New Ad Products, Homepage Marquee and Strain List Marquee. Each new ad placement provides unique ways for retailers to reach the millions of consumers visiting Leafly each year. The Homepage Marquee and Strain List Marquee ad placements are Leafly’s biggest and boldest ad placements to-date, providing retailers maximum visibility on the company’s coveted homepage. And with its new Strain Page Feature ad, Leafly will use new technology and features to inject its first-party strain data into its retailer ad products to connect retailers with active shoppers via effects-based product matching for the first time. The introduction of these new ad placements also comes with updated creative templates and new customizable features, providing advertisers with flexibility, ease, and more creative control.
🧔 People
Ascend Wellness Holdings — Daniel Neville, CFO, and Frank Perullo, President, Named Interim Co-CEOs; Board Commences Search for CEO. The Board has retained Russell Reynolds, a leading executive search firm, to support this effort. In connection with this announcement, Chairman and Founder Abner Kurtin will transition to Executive Chairman of the Board.
Dutchie — Former HubSpot General Counsel John Kelleher Company as General Counsel. Previously, Kelleher served for ten years as the general counsel for HubSpot (NYSE: HUBS), and eight years as general counsel for Endeca Technologies.
🎙️ Interviews
Safe Harbor Financial, CIO, Paul Penney (Highly Objective Podcast)
Respect My Region's Mitch Pfeifer on the New World of Cannabis (CLIO)
Tim Seymour On Constructive Pessimism In Cannabis (Cannabis Investing Podcast)
👋 Highly Objective is curated by Dai Truong, who leads Cannabis Investment Banking at Arlington Capital Advisors. 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.