🧃 GTI Advances Hemp-Derived Legal THC (HDLT) Beverage Strategy (Agrify + Señorita)
Eaze $10M Series B. Statehouse Holdings assets up for sale. Coastal Sun Farm sues Gold Flora. Matt Gaetz brings optimism to Cannabis industry. Embarc opens 16th dispensary. Leaflink Plus.
🌿 Industry
Inside Attorney General Nominee Matt Gaetz's Complicated Pro-Cannabis Stance. Gaetz advocated for expanding medical marijuana access in Florida by allowing smokable marijuana products in 2019. In 2022, Matt Gaetz was one of few Republican House members to support the Democratic-led Marijuana Opportunity Reinvestment and Expungement (MORE) Act, which aimed to federally legalize Cannabis. He has co-sponsored a number of marijuana-related bills during his time in Congress. Among the issues he has touched on are facilitating research, granting access to veterans, and easing banking restrictions for marijuana businesses–all indicators of a continuing push for reform on marijuana. More recently, Gaetz raised concerns during an oversight hearing in June last year about the Drug Enforcement Administration’s (DEA) lack of a timeline to review marijuana’s federal classification. However, despite general support for marijuana reform, Gaetz also came out against Florida’s 2024 recreational marijuana ballot initiative–which Trump had endorsed–on the basis that such issues should not be decided through constitutional amendments.
Natalie Fertig (POLITICO) points out that Gaetz is one of the most pro-cannabis Republicans on the Hill and as AG will be overseeing the end of the rescheduling process. If Gaetz is confirmed, the industry is optimistic that he could do more than just shepherd through rescheduling. Reinstating Obama-era protections for the cannabis industry and beginning the process for full decriminalization are two steps some hope Gaetz would push for if he takes the role atop the DOJ
Boris Jordan (Curaleaf) posted two videos of Gaetz talking about Cannabis regulations: "Maybe I should serve as attorney general of the United States. I'd be easy on marijuana and tough on big tech," Gaetz said in the first one.
In the second video, Gaetz questioned why the Biden administration hadn't already removed marijuana off the list of Schedule I drugs. “That was the first good piece of news I got for cannabis in three years,” Jordan said of Gaetz’s nomination to POLITICO
New York cannabis office approves a 6-month extension for CAURD provisional licenses. The first cohort of provisional licenses is set to expire at the end of this month. This extension addresses delays due to issues such as the Social Equity Fund, litigation & the recent change allowing CAURD provisional licensees to relocate.
A New York state judge has ruled that hemp businesses can remove signs posted that describe them as “illicit cannabis” stores. Supreme Court Justice Arthur Engoron issued the temporary restraining order to two Manhattan hemp stores that sought to remove the signs proclaiming illegal activity without the businesses having received an administrative hearing or due process. The order could jeopardize ramped-up enforcement against hundreds of hemp shops that have been raided or closed since New York launched a statewide crackdown this spring.
Missouri’s double-tax practice on cannabis is unconstitutional, court rules. Local governments in Missouri can add a 3% local tax on cannabis products to state sales tariffs, but the law forbids cities and counties to “stack” local levies on top of one another. The ruling means about a $3M monthly tax cut for consumers.
Georgia’s medical cannabis program grows to 25,000 patients, spurs dispensary expansion. As a result, the six production companies licensed by the commission to grow and produce medical cannabis products now are operating 13 dispensaries across Georgia. Under Georgia’s MMJ law, each of the companies will receive an additional license with every increase in the registry of 10,000 patients.
Michigan price compression is largely attributed to product oversupply, but the illicit markets also plays a role. Michigan cannabis prices dropped another 6% in October, setting yet another record low. The average price for an ounce of cannabis flower in Michigan’s adult-use market has fallen ~21% YTD to $73.99 in October. Despite those low prices, operators sold ~35,000 more pounds of flower and 103,000 ounces more infused liquid in October than in September. Michigan cannabis sales for October rose 0.6% sequentially, at $268.6M, sales were up 2.2% YoY.
Missouri’s cannabis industry continues to thrive with monthly sales in October reaching $123.3M. This represents a ~5% increase from September’s $117.4M.
Arizona September sales of $83.1M. This is down 26% from March’s high of $113.7M and $92.6M in August.
New York OCM expects $800M in revenue for 2024. By comparison, New Jersey, where recreational sales started eight months before NY, raked in $673M last year.
💵 Deals
Eaze raises $10M Series B. The investment will fund the reopening of 70 Eaze and Green Dragon locations across California, Colorado, Florida, and Michigan, including 57 retail stores, 11 delivery hubs, and two production facilities. More on the raise below in an interview with CEO Cory Azzalino:
Agrify to Acquire the Señorita Brand of THC Beverages. Agrify will acquire certain assets from Double or Nothing LLC, the owner and creator of the Señorita brand of hemp-derived legal THC (HDLT) drinks, in exchange for 530,000 shares of Agrify (Note: ~$2.6M if we use prior’s day closing of $4.83/share, but this was likely lower based on deal likely being agreed to prior to the stock popping on GTI’s investment). Señorita was designed and formulated by best friends and world-class winemakers Charles Bieler and Joel Gott, who collectively produce over two million cases of wine sold annually across multiple North American distribution outlets. Recognizing a growing generational demand for adult beverage alternatives, they founded Señorita in 2022 and launched the brand in the U.S. in 2023. Marc Hauser (Cannabis Musings) points out that this acquisition + Agrify serves as a potential public vehicle for GTI to raise capital to build a hemp beverage business.
Statehouse Holdings assets up for sale. The assets are being sold by way of court ordered receivership and is subject to court confirmation. All assets sold from the Receivership Estate are done so free and clear of all liens.
Highsman merges with Frozen Fields, a North Carolina-based hemp derivative brand and sister company Abundant Labs, a hemp manufacturing facility. The combined entities has resulted in the formation of Top Seed Inc.
High Tide Closes Final Tranche of $15M Subordinated Debt Facility. The Debentures will mature on July 31, 2029, and bear interest at a fixed rate of 12% per annum on drawn amounts, payable quarterly. Pursuant to the terms of the subscription agreements, the Debentures were to be drawn in two tranches: (i) $10M principal amount which was previously drawn on July 31, 2024, and (ii) $5M principal amount which has now been drawn.
SNDL Renews Share Repurchase Program for C$100M. Under the Company's current share repurchase program, which commenced on November 21, 2023, the Company previously sought to repurchase up to C$100M or 13.1M shares. As of November 14, 2024, the Company had repurchased an aggregate of 727,829 shares for cancellation under its current share repurchase program at a weighted average price of ~$1.97 per share.
📄 Company Updates / Earnings
Coastal Sun Farm sues Gold Flora over nonpayment. The parties had a payment plan in place prior to Gold Flora going quiet on communication a month ago. After seeing Left Coast Ventures place the company into limited receivership and having gone through the HERBL receivership proceeding recently, Coastal Sun Farm felt the need to take action.
GTI Q3 2024. Revenue of $287M increased 4% YoY. Adjusted EBITDA of $89M or 31% of revenue. GAAP net income of $9M or $0.04 per basic and diluted share. Nine months CFO of $152M, net of $88M of tax payments. Cash and cash equivalents of $173.6M. Total debt outstanding was $255.6M.
Cresco Labs Q3 2024. Revenue of $180M, Adjusted gross profit of $95M (53% GM), a 250 bps improvement Y/Y. SG&A of $57M. Net loss of ($8M), Adjusted EBITDA of $51M, up 5% Y/Y (29% margin), a 280 bps improvement Y/Y. OCF of $49M and FCF of $43M. Retained the No. 1 share position in IL, PA and MA and improved to a top 3 position in OH. Cash, cash equivalents and restricted cash of $157M, debt of $390M and a mortgage loan of $18M.
Glass House Brands Q3 2024. Net Revenue of $63.8M, up 32% from $48.2M in Q3 2023 and up 18% from $53.9M in Q2 2024. Adjusted EBITDA was $20.4M, compared to $10.7M in Q3 2023 and $12.4M in Q2 2024. Equivalent Dry Pound Production2 was 232,295 pounds, up 128% year-over-year. Cost per Equivalent Dry Pound of Production was $103/pound, a decrease of 13% compared to the same period last year. Cash of $35.1M.
Jushi Q3 2024. Revenue of $61.6M, down (5.8%) YoY. Gross profit margin improved to 45.4%. Adjusted EBITDA of $10.3M (16.8% margin). Net loss of ($16.0M). Cash, cash equivalents, and restricted cash of $22.9M.
MariMed Q3 2024. Revenue of $40.6M, up 4.6% YoY. Adjusted EBITDA of $4.7M (12% margin). Cash and cash equivalents of $9.8M.
iAnthus Q3 2024. Revenue of $40.3M, down (6.3%) sequentially and down (6.1%) YoY. Gross profit of $18.1M (44.9%), down (12.6%) sequentially and up 35.5% YoY. Net loss of ($11.6M). Adjusted EBITDA of $5.3M.
Acreage Reports Q3 2024. Revenue of $39.6M (35% GM), Net loss was ($22.2M), Adjusted EBITDA was $0.6M. $13.8M in cash.
Planet 13 Q3 2024. Revenue of $32.2M, Gross profit was $16.7M (51.9% GM), Adjusted EBITDA of $1.3M, Net loss of ($7.4). Cash of $27.4M, debt of $177.6M.
Vireo Growth Q3 2024. Revenue of $22.4M, excluding discontinued operations and NY increased 6.2% YoY, Operating income of $3.9M. Cash of $7.3M, total current liabilities were $128.7M, including $88.4M in liabilities held for sale related to the Company’s businesses in New York.
Gold Flora Q3 2024. Revenue of $32.6M, Adjusted Gross Profit of $21.1M (65% Adjusted GM), Adjusted EBITDA of $2.8M, Net Loss of ($18.9M) . Cash of $10.2M. Closed a senior loan facility with J.J. Astor & Co. for up to $13.15M, with an initial draw of $7.15M and second draw of $2.0M now completed. Two additional $2.0M draws remain available to the Company.
C21 Investments Revenue of $7.5M, up 14% QoQ, Gross Margin of 43.5%, up from 31% in Q1, Adjusted EBITDA of $1.3M, Cash at the end of Q2 was down to $2.1M, driven by working capital items of $0.5M, Income Tax paid and $1.1M inventory build.
Springbig Q3 2024. Revenue was $6.4M, compared to $6.9M in the prior year. Adjusted EBITDA was $0.4M compared to a loss of $(0.9M) in the prior year. Cash of $847K, current debt of $7.7M.
Agrify Q3 2024. Revenue was $1.9M, Gross profit was $0.2M, Net loss was ($18.6M), primarily attributed to a $15M change in fair value of warrant liabilities.
NewLake Capital Q3 2024. Revenue of $12.6M, Net income attributable to common stockholders totaled $6.4M. Cash of $19.8M, with $12.2M committed to fund building and tenant improvements. Collected ~97% of contractual rent during the quarter.
Chicago Atlantic Real Estate Finance Q3 2024. Total loan principal outstanding of $362.3M, across 29 portfolio companies. Total gross originations of $32.7M, of which $24.0M and $8.7M was funded to new borrowers and existing borrowers, respectively. Subsequent to quarter end, the Company funded an additional $36.5M of gross originations, which included the advance of the unfunded commitment that existed on September 30, 2024 of $6.0M, as well as a $25.0M advance on a new credit facility to an operator in Illinois.
Chicago Atlantic BDC Q3 2024. Investment income of $3.2M, Investment portfolio of $55.8M at fair value. As previously announced, on October 1, 2024, the Company acquired a portfolio of loans from Chicago Atlantic Loan Portfolio in exchange for newly issued shares of common stock. As a result of the Loan Portfolio Acquisition, the Company had net assets of ~$302M and investments in 28 portfolio companies as of October 1, 2024. In connection with the Loan Portfolio Acquisition, the Company was renamed “Chicago Atlantic BDC, Inc.,” and its ticker symbol was changed to “LIEN.” The changes to the Company’s name and ticker symbol became effective in the market at the open of business on October 2, 2024.
🏬 Retail
Embarc opens San Bruno, CA’s first dispensary. This is Embarc’s 16th dispensary in California. Embarc was selected as the city’s only cannabis storefront in August 2023, beating out two competitors for the license.
Sweetspot Farms opens in Stamford, CT. This is Sweetspot’s second location in Connecticut, with a retail operation in West Hartford. There are other Sweetspot locations in Maryland, New Jersey, Rhode Island, and Vermont. Other cannabis dispensaries currently open in Stamford include Fine Fettle and Curaleaf.
Verano Opens 4th Cannabis Dispensary in New Jersey. The Zen Leaf dispensary in Mount Holly is the company’s 153rd retail dispensary nationwide. In addition to Zen Leaf Mount Holly, the Company’s New Jersey operations include dispensaries in Elizabeth, Lawrence Township, and Neptune Township, and a 120,000 sq ft cultivation and processing facility in Branchburg.
Bayside Cannabis Dispensary opens in Oakland Gardens, NY. Located at 224-15 Union Turnpike, the dispensary transformed three vacant storefronts into a spacious, modern outlet in the heart of the community.
🌱 Product
Jane Technologies launches MyHigh—proprietary AI-powered personalization engine. MyHigh will enable help dispensaries optimize their product selection, brands connect with the right consumers at the right time, and shoppers discover the ideal products for desired effects.
LeafLink launches LeafLink Plus. LeafLink Plus is a new membership plan that offers retailers tools to help run their cannabis business, make better decisions with data, and maximize profits. Two tools are currently included in the LeafLink Plus membership: Payment on Sell-Through, aka PoST. PoST is a fintech solution that’s designed to tackle the delinquent payments issues that plague the industry. With this tool, retailers only pay for products when they sell to the end consumer. It frees up badly-needed capital that’s usually tied up in inventory, allowing retailers to use it for other business activities. Inventory Insights, a brand new tool to help you make smart ordering decisions. We invest a lot of time talking to our customers; and our team is made up of cannabis veterans who bring an incredible wealth of knowledge to the work being done. Inventory Insights taps that knowledge to offer customers a new tool that integrates with your Point Of Sale system to analyze inventory and sales data, and give you actionable insights for better ordering decisions.
BLAZE Retail is available for iOS iPads. BLAZE Retail iOS app for iPads is built to streamline transactions, the intuitive iOS app enhances the customer experience by enabling faster, more reliable sales directly from the iPad. With sleek, modern interfaces and robust functionality, the BLAZE Retail® app simplifies the most frequent tasks all while delivering a seamless, mobile-friendly user experience.
The Cannabist Company Launches Partnership with COAST Cannabis Co. This new collaboration allows MA-based COAST to expand the reach of its premium, wellness-focused cannabis products into Maryland and New Jersey.
Illicit Gardens introduces Illicit Gemstones. These confectioner-and cannabis chemist-crafted sweet treats are an elevated take on rock candy and are designed to excite fans' tastebuds and bring them the nostalgic premium cannabis experiences they expect from Illicit Gardens.
Sweet Flower x A Golden State x 2nd Edition: Lava Flower x Woods. Sweet Flower and A GOLDEN STATE™ releases the second edition of the celebrated Sweet Flower strain. Since November 2019, Sweet Flower and A Golden State have collaborated to create some of California’s finest cannabis offerings—an impressive five-year journey in an industry as dynamic as California cannabis.
Old Pal Pantry launches Old Pal Provisions, hemp-infused gummies and crispies nationwide. The Old Pal extension brand will allow the company to reach more with 100mgs edibles for $30 and a 3-pack variety pack for $80.
Hara Supply Expands Premium Glass and Ceramic Filter Tip Offerings. The filter tips are made from 100% natural, non-toxic, single-sourced materials. Options include: Conical W Fold (often paired with direct printing for brand logos), Conical & Cylindrical Glass Tips (frequently used with a cigar band wrap), Conical & Cylindrical Ceramic Tips (1x-6x air holes), Spiral Twist Tip (customized air flow path).
🧔 People
Gold Flora Board Member Mark Castaneda resigns. Mark Castaneda was on the board of TPCO prior to its acquisition by Gold Flora. He served as Tilray’s CFO from March 2018–September 2020.
🎙️ Interviews
Missy Bradley: The Challenges and Triumphs of Innovation | CannabisNow
Unlocking Potential with Ascend CEO Sam Brill | Higher Exchanges
Eaze CEO talks about their latest financing update | Cultivated
Welcome back to the High-Rise! | High Rise
when will the canna bros stop relying on gop at the national level? (trump 1.0, mace, candidate desantis, etc...) unless you can get some guarantee via an outright bribe, forget it!
'hey, i know charlie manson has some other issues, but he is pro-cannabis and can help us get it across the line!'