Dai Truong's Cannabis Newsletter - Issue #21


Cannabis

Former Minnesota ER doctor leads Vireo Health

Kingsley in 2014 quit his $400,000-plus physician job to start Minnesota Medical Solutions (MMS), one of the first outfits licensed to grow, process and sell medical cannabis in the state. He invested $600,000 in savings and borrowed money in the new venture. Today, Kingsley is CEO of Minneapolis-based Vireo Health, the parent of MMS. It is a physician-, scientist- and-lawyer-led company of about 350 employees that grows cannabis in its own greenhouses, refines the product for specific medical and other uses, and sells it through company-owned and third-party dispensaries in 11 states and Puerto Rico that range from medical-use only to recreational use.

Harvest of Utah Selected for Utah Medical Cannabis Cultivation License as Top-Ranked Applicant

Harvest of Utah Selected for Utah Medical Cannabis Cultivation License as Top-Ranked Applicant. The extensive selection process rewarded only eight of 81 applicants supporting Utah’s newly approved medical cannabis program. Harvest of Utah received top recognition achieving outstanding scores within the strict criteria guidelines by showing proof of financial viability, expertise in cannabis operations and demonstrating its commitment to the local community.

Cannabis LPs investing in SPACs

Following Cannabis Strategies Acquisition Corp (CSAC) and MTech Acquisition Corp, more SPACs have been raised recently and are looking for Companies to invest $1B+ of capital.

Liquor Store Operator Alcanna Leverages Real Estate and Regulatory Experience for Cannabis Retail Opportunity

Currently, Alcanna has eight cannabis stores open for business in Alberta and one in Toronto, Ontario. The company has an additional 29 stores under construction in Alberta, which are slated to open by the end of this year or early next year.

Earlier this year, Alcanna entered into a $70 million revolving credit facility. The company’s balance sheet is strong, and Alcanna is well-funded for at least the next year to year and a half, according to Burns. If something, such as Ontario opening the market to private sector retail, happens, the company may access the capital markets sooner.

Ascend Wellness Goes Deep Rather than Wide

Ascend Wellness’s footprint extends across Ohio, Massachusetts, Illinois, and Michigan. In Ohio, a new market for the company, Ascend Wellness has a cultivation facility and flower in the market.

In Massachusetts, the company has three stores in the greater Boston area and a cultivation facility of more than 150,000 square feet, including 80,000 square feet of canopy. As these operations open next year, Kurtin believes the company is well-positioned to be a top-three player in the state.

In Illinois, the company purchased an existing asset: dispensary chain HCI. Ascend Wellness also has a 75,000-square-foot cultivation facility in the state, which is just coming online. The company is also pursuing additional acquisitions in the state.

The company has 12 municipally approved dispensaries, either owned or about to close, in Michigan. The first of these will open in Morenci, Michigan next week. A total of four are slated to open by the end of the year, with the remainder opening by spring of next year.

Green Thumb Industries Inc. (GTI) Expands Essence Brand in California with Third Retail License Award

Green Thumb Industries (GTI) (CSE:GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Essence and Rise™ retail stores, today announced that it is one of only three companies to be awarded a new retail license by Culver City, located in Los Angeles County, California.

Jushi Holdings Inc. Receives Approval For Retail And Delivery Permit in Culver City

Jushi Holdings Inc. (NEO: JUSH.B), a globally-focused, multi-state cannabis and hemp operator, announced that after an intensive vetting process, its subsidiary has been selected to move forward in the merit-based application process for a storefront retail (and ancillary delivery) permit in Culver City, California. The Company will proceed by preparing a conditional use permit application for submission to the city.

Life looking good for Santa Barbara cannabis operators

The agricultural community in Santa Barbara has embraced the marijuana industry, especially on the cultivation side of the business.

Deals

Auxly Cannabis signs $123M investment, research deal with Imperial Brands

Imperial Brands is the latest multinational company to step into the Canadian pot industry, signing a $123-million investment deal with Auxly Cannabis Group that includes a research and development partnership and gives the Vancouver-headquartered firm the global licences to the British tobacco giant’s vaping technology.

The deal announced Thursday would give London-based Imperial Brands a 19.9 per cent stake through a debenture convertible into Auxly equity, with a conversion price of 81 cents per share.

Green Growth Brands Announces CAD $50M Bought Deal

Green Growth Brands Inc. (CSE:GGB) (OTCQB:GGBXF) announced that it has entered into an agreement with a group of investment dealers, led by Canaccord Genuity, an aggregate of 20,500,000 units of the Company at a price of C$2.45 per Unit for aggregate gross proceeds of C$50,225,000.

The Flowr Corporation Announces $43.5M Bought Deal

Flowr, through its subsidiaries, holds cannabis production and sales licenses granted by Health Canada. With a head office in Toronto and a production facility in Kelowna, BC , Flowr builds and operates large-scale, GMP-designed cultivation facilities utilizing its own growing systems. Flowr expects to provide premium-quality cannabis to the adult-use recreational market and the medicinal market.

DionyMed Signs Definitive Agreements With Innovative Industrial Properties (IIP) to Finance SoCal Cannabis Campus Acquisition

DionyMed Brands Inc. (CSE: DYME)(OTCQB:DYMEF) signed a definitive agreement to acquire select assets from MM Esperanza 2 LLC, doing business as “MMAC,” and MMAC’s 1.83 acre Los Angeles cannabis campus. This acquisition marks the expansion of DionyMed’s operational capabilities in Southern California to effectively serve the entire state through its leading cannabis brands platform. Under the terms of the acquisition, DionyMed will pay MMAC $13M in cash and issue $6M in DionyMed Series A Multiple Voting Shares.

Zenabis Arranges $10M Non-Dilutive Financing via Supply Agreement with Starseed Medicinal Inc.

Zenabis Global Inc. (TSX:ZENA) announced that it has entered into an agreement with Starseed Medicinal Inc. (“Starseed”) (the “Supply Agreement”), pursuant to which Starseed will advance $10 million to Zenabis (the “Prepaid Amount”) in September 2019 in return for Zenabis supplying dried cannabis flower and trim.

​Couche-Tard steps further into cannabis with Fire & Flower stake

Alimentation Couche-Tard Inc. has agreed to make a strategic investment in Fire & Flower Holdings Corp. of Edmonton, which will use the funds to develop its Hifyre digital retail platform and expand its network of cannabis retail stores.

Harvest Health & Recreation Expands Footprint with Acquisition of Phoenix Operator Urban Greenhouse

Harvest Health & Recreation Expands Footprint with Acquisition of Phoenix Operator Urban Greenhouse. Harvest now operates 13 dispensaries and cultivation and manufacturing facilities in the state, pending acquisitions will add an additional six, strengthening its leadership position as the largest operator in the market.

People

Sunniva Announces Kevin Wilkerson Assumes Role As President

Kevin Wilkerson has been promoted to President of Sunniva Inc., the corporate parent entity. Mr. Wilkerson will also continue his role as President and CEO of Sun CA Holdings, Inc. (“Sun CA”), the Company’s main US subsidiary. Mr. Wilkerson originally joined Sunniva’s management team as Chief Operating Officer, Sun CA following the Company’s acquisition of LTYR Logistics, LLC in December 2018. Mr. Wilkerson will continue to be responsible for all of Sunniva’s California operations while taking on oversight of the Canadian operations through the current sales process of the Okanagan Falls property and the reviewing of strategic initiatives for all of the Company’s Canadian assets.

TILT Holdings Announces Tim Conder as COO

Conder was previously the Senior Vice President of Software and Services for TILT, having joined TILT through the acquisition of his cannabis delivery and supply chain services company, Blackbird Logistics Corporation (“Blackbird”), in January 2019.

Acreage Holdings Announces Hire of Laurence Wolfe As Senior Vice President of Manufacturing and Distribution

Mr. Wolfe joins Acreage from Gartner, Inc. where he was a Leadership Partner in supply chain advisory and consultancy. Prior to Mr. Wolfe’s position with Gartner, Inc., he was Senior Vice President of Operations of Heineken USA, where he was responsible for the end-to-end supply chain management across the U.S.