Dai Truong's Weekly Newsletter - Issue #4


The most interesting news from this past week beyond the typical financings in the space is Greenlane’s S-1 filing (see below for link). Greenlane and Kush Supply Co. compete on the packaging side, but Greenlane has impressive distribution to head shops, smoke shops, and dispensaries. It’ll be interesting to see what valuation premium the Company gets for operating in the Cannabis space as distributors often trade closer to 1.0x revenue.


Cannabis

CBD is being sold at the largest drugstore chain in the U.S.

U.S. cannabis retailer Curaleaf Holdings Inc. (+20% following announcement) disclosed that CVS will carry its line of CBD products. CVS said that it has already started to sell CBD products in eight states as of last week, including creams, sprays, roll-ons, lotions and salves.

Two Cannabis Startups in Y Combinator’s Latest Demo Day

~200 companies are in Y Combinator’s current cohort, but two of them are “plant-touching” cannabis businesses whose presence in the program signals a shift in Silicon Valley. Nabis is a leading distributor of cannabis brands to retail dispensaries. Flower Co provides memberships for cheaper weed sales and delivery. They currently sell $200,000 in marijuana per month to 700 members, charging $100/year for membership, and take 10% on product sales. I expect both of these companies to garner interest from the tech community looking for exposure to Cannabis.

5 Big Predictions for Cannabis This Year

Ryan Smith, CEO @ LeafLink provides his predictions for 2019: 1) Big Pharma gets into Cannabis 2) Micro-dosing becomes a big market 3) CBD becomes a market in its own right outside of Cannabis 3) Inter-state commerce gains momentum 5) Public companies mature like mature counterparts

Michigan Medical Marijuana Board Inundated With Applications Before Deadline

There was a mad scramble at the Michigan Medical Marijuana Licensing Board meeting on March 21 as about 50 unlicensed medical marijuana businesses have just 10 days before the state orders them to shut down.

White Glove Cannabis Delivery Service, Emjay, Officially Launches In Los Angeles

Emjay launches today in Los Angeles as a premier cannabis delivery service. Emjay customers can expect to have their products delivered to their door within an average of 30-minutes, and all at the same price as going to a dispensary.

L.A. County expands smoking ban to vaping tobacco and smoking pot in public - Los Angeles Times

Los Angeles County updated its definition of “smoke” and “smoking,” expanding a longstanding ban on using tobacco at beaches, parks and government buildings to include pot and e-cigarettes in beach parking lots, outdoor bars and county-owned golf courses.

Cannabis Investors Eye Uruguay in Push for Global Weed Exports - Bloomberg

Serious marijuana money is starting to show up in Uruguay.

Deals

MedMen Announces US$250 Million Investment From Gotham Green Partners

MedMen announce that it has signed a binding term sheet for a senior secured convertible credit facility of up to $250M from funds managed by Gotham Green Partner

Grassroots Cannabis Announces Closing of US $90M Capital Raise

Grassroots Cannabis, a cannabis company that grows, processes and sells cannabis through its multi-state, vertically integrated business model announces the successful completion of its first capital raise of $90M.

Cansortium Completes $53M IPO

Cansortium, a global medical cannabis company operating in highly populous markets with a mission to deliver the highest standards of cannabis care from nursery to lab to shelf. Headquartered in Miami, FL and operating under the brand Knox Medical, the Company through its subsidiaries operates 4 cultivation facilities and 11 dispensaries across Florida, Texas, Puerto Rico and Pennsylvania, with licensing pending in Michigan and Canada. The Company also has a licensed cultivation facility in Colombia.

Valens GroWorks Announces $30M Bought Deal Financing & Acquisition of Strategic Assets

Valens GroWorks (CSE: VGW), a multi-licensed provider of cannabis products and services focused on various proprietary extraction methodologies, distillation, cannabinoid isolation and purification, as well as associated quality testing announced a bought deal to raise C$30M.

MPX International Closes $20M Private Placement

MPX International Corporation announced that it has successfully closed its previously announced non-brokered private placement offering. The Company intends to use the net proceeds from the Offering to fund capital expenditures in Owen Sound, Ontario as well as potential future acquisitions and for working capital and general corporate purposes.

Greenlane Files Registration Statement for IPO

Greenlane Holdings, Inc. (“Greenlane”), a leading distributor of premium vaporization products and consumption accessories, announced that it has filed a registration statement on Form S-1 with the SEC related to a proposed initial public offering of Class A common stock. Cowen and Cannacord are joint-bookrunners.

Vireo Health Begin Trading on CSE Under Ticker Symbol “VREO”

Vireo Health International, Inc. is America’s leading science-focused, multi-state cannabis company. Vireo’s physician-led team of more than 250 employees is dedicated to providing best-in-class cannabis products and customer experience. Vireo cultivates cannabis in environmentally-friendly greenhouses, manufactures pharmaceutical-grade cannabis extracts, and sells its products at both company-owned and third-party dispensaries. The Company currently has operations in six states including Minnesota, New York, Pennsylvania, Maryland, Rhode Island, and Ohio.

DionyMed Brands acquire Cannabis Campus from MMAC for $19M

DionyMed Brands, a multi-state cannabis brands platform acquired select MMAC assets, including the 1.83 acre Los Angeles cannabis campus that includes a dispensary storefront, distribution facility, manufacturing hub and D2C fulfillment center. The acquisition includes all property, leaseholds, equipment and licenses for a purchase price of $19M ($13M cash, $6M stock) and enhances DionyMed’s brands distribution and direct-to-consumer footprint in Southern California.

Connect

I evaluate investment and acquisition opportunities for MedMen, an LA-based vertically integrated Cannabis retailer. Would love to hear your thoughts, feedback or insights. Get in touch at dai.truong@medmen.com. Or find me on:

Twitter: @dai_truong

LinkedIn: https://www.linkedin.com/in/truongdai/