📈 TerrAscend $20M Private Placement + $25M Commercial Loan as it receives conditional approval to list on the TSX
📈 TerrAscend $20M Private Placement + $25M Commercial Loan as it receives conditional approval to list on the TSX
Ispire raises $8M. Green Acre invests additional $2M into US Distribution JV with Humble & Fume. AYR Wellness likely able to defer ~$69M of debt. Canopy overstates BioSteel revenue. Treez adds COO.
🌿 Industry
MSO footprints mapped out in a new feature. MJBizDaily has mapped out the MSOs, creating a series of visuals illustrating the states where each company is operating.
The digital version, part of which was initially published in the 2023 MJBiz Factbook, also includes information about recent activity and future plans
New York Enforcement Actions Have Resulted in Seizure of 1,000+ Pounds and ~$11M in Illicit Products Through Coordinated Interagency Effort. New York State Office of Cannabis Management and Department of Taxation and Finance began inspecting unlicensed shops in early June. — NY Governor
Since June 7, the OCM and DTF have jointly conducted inspections at 33 storefront businesses in NYC, Ithaca, and Binghamton not licensed to sell cannabis
To aid in these continuing actions, the FY 2024 Budget also provides $5M for an additional 37 OCM staff to carry out enforcement
Judge preserves chance to appeal denials of Alabama medical marijuana licenses. A Montgomery judge issued an order preserving the opportunity for companies denied a license by the AMCC to appeal that decision. — AL.com
Montgomery County Circuit Judge James Anderson issued a temporary restraining order at the request of license applicants Alabama Always LLC and Hornet Medicinals LLC. The AMCC did not oppose the order
Alabama Always said it has spent more than $4.5M to build a cultivation and processing facility and leased stores in 5 cities
Sydney’s First Cannabis Dispensary Isn’t Far Away. Sydney is one approval away from getting its first cannabis dispensary as medicinal cannabis use booms—but there’s a race to be the first on the market. — VICE
Medicinal cannabis is legal Australia-wide for anyone with a prescription, which can be obtained easily from a GP to treat anything from anxiety and sleep disorders to general “pain”. Cannabis scripts can legally be filled in pharmacies
The number of cannabis prescriptions handed out has grown from fewer than 3000 in 2018 to more than 120,000 in 2021 and all industry estimates say it has continued to boom in 2022 and 2023
New York’s small cannabis farmers will soon be competing with medical operators for shelf space. As the state’s Cannabis Control Board considers proposed regulations that will control New York’s legal market, some growers may soon have to start competing with these medical operators for shelf space. — Syracuse.com
Registered Organizations (ROs) can run large indoor grow operations, while proposed regulations severely limit the number of indoor grow lights that conditionally licensed cultivators may use
A Adult-Use Conditional Processor (AUCC) license may have 20 artificial grow lights. And an outdoor canopy of up to 43,560 sq ft or 25,000 sq ft of greenhouse
Registered Organization Non-Dispensing (ROND) are much more permissive. With up to 100,000 sq ft of canopy space, all of which can be indoor operations
Evermore (Temescal Wellness) granted proverbial stay of execution. A Baltimore Circuit Court judge approved a temporary restraining order that halted a planned auction of the company’s assets. — GMR
Temescal Wellness won the reprieve after filing a last-minute lawsuit against two of its creditors who had been pushing for the auction
The auction had been scheduled after Evermore defaulted on a $15.5M Senior Secured Credit Facility from AFC Gamma and an affiliate, Ascend Maryland 2
Nevada eases marijuana consumption lounge rules, issues first licenses. Nevada regulators this week approved loosening air-ventilation standards for marijuana consumption lounges in Las Vegas and other parts of the state while granting the first three conditional licenses for such venues. — MJBizDaily
Planet 13, Common Sense Botanicals Nevada, and Cheyenne Medical were the three to receive license approvals
Operators are still far from launch. When pressed to lay out Planet 13’s vision, a company representative told regulators that plans remain in the concept phase
Missouri will soon require “plain packaging” for products so they don't appeal to kids. Cannabis packages sold in the state must have limited colors and can't resemble commercially-sold candy after July 30th. — Missouri Independent
Missouri will become one of few states that require plain packaging in the adult-use cannabis market, according to the Network for Public Health Law. The others include Connecticut, Massachusetts and New Jersey
💵 Deals
TerrAscend Upsizes Previously Announced Offering to $20M and Closes $16M Initial Tranche. The closing of the initial tranche of the Private Placements consists of an aggregate of 4,071,577 units of the Company at a price of $1.50 per Unit for aggregate gross proceeds of ~$6.1M and 9,905 senior unsecured convertible debentures of the Company at a price of US $1,000 per Debenture for aggregate gross proceeds of $9.9M. The net proceeds from the Private Placements will be used to qualify for the Company’s proposed TSX listing, to fund Maryland dispensary acquisitions, and for working capital and general corporate purposes.
The Company also closed on a $25M Commercial Loan with Stearns Bank. The proceeds from the Loan will be used to pay down the Company’s higher interest rate debt, thereby lowering overall interest expense. The Loan carries an interest rate of prime plus 2.25%, which is currently 10.5%, and matures in December 2024.
Ispire Technology Raises ~$8M in Private Placement. The company sold 1,117,420 shares at a purchase price of $7.1318 per share, which was completed on June 26, 2023. Ispire intends to use the net proceeds for working capital and general corporate purposes, which may include, but not be limited to, the development of manufacturing operations in Vietnam and California, research and development activities, and marketing and promotion.
Group opposes “fire sale” of troubled cannabis retailer Fire & Flower. A syndicate of parties including the second-largest shareholder of Fire & Flower Holdings Corp. is opposing a proposed stalking-horse agreement between the cannabis retailer and its largest shareholder, an affiliate of convenience store operator Alimentation Couche-Tard. Fire & Flower entered bankruptcy protection earlier this month. In an affidavit filed with the Ontario Superior Court of Justice, the major shareholder, Shawn Dym, co-founder and director of Green Acre, called the proposed sale and investment solicitation process (SISP) “truncated” and a “fire sale.”
Humble & Fume raises additional $2M from Green Acre, investing $1.9M in HCI, their US Distribution Joint Venture. With this latest investment, Green Acre's ownership stake in HCI has increased from 50% to 50.2%, while Humble retains 49.8% ownership. Similar to Green Acre's previous investments totalling $10M in HCI, this additional $2.0M was funded through an option agreement with Johnson Brothers, a U.S.-based distributor of wine, spirits, and beer.
Tilray Brands Completes Acquisition of HEXO Corp. From a Canadian category perspective, Tilray becomes #1 in Flower (40% market share), Oils, and Concentrates, and #2 in Pre-Rolls (29% market share), #4 in Vape, and Top 10 in all other categories.
📄 Company Updates
TerrAscend Receives Conditional Approval to List on the TSX. Final approval of the TSX Listing is subject to the Company meeting certain customary conditions required by the exchange. The Company will issue a press release once the TSX confirms the date that trading will commence on the exchange. In connection with the TSX Listing, the Company has submitted a request to voluntarily delist its Common Shares from the Canadian Securities Exchange (CSE). The CSE Delisting is expected to be effective on or shortly after the date the Common Shares commence trading on the TSX.
AYR Wellness Reaches Contingent Agreements to Defer ~$69M of Promissory Note Payments. As a result of the collective amendments to the vendor notes, promissory notes, and earn-out payments, the Company has now successfully extended the payment terms of a cumulative of $96.9M of obligations. The effectiveness of the maturity and amortization deferrals referenced above is contingent on an amendment to the Company’s 12.5% senior notes (the “Senior Notes”) to extend the maturity date of the Senior Notes to December 10, 2026 or a later date (or an exchange of the Senior Notes for a new series of notes with a maturity date of December 10, 2026 or a later date). For clarity, the amendments to the Sira and GSD earn-out payment terms were effective immediately and are not contingent on an amendment to the Senior Notes.
Canopy Q4 FY 2023 and FY 2023 Financial Results. Net revenue of $88M in Q4 FY2023 declined 14% as compared to Q4 FY2022. Reported GM in Q4 FY2023 was (103%) as compared to (166%) in Q4 FY2022. Net Loss in Q4 FY2023 was $648M, which is a $59M increase as compared to Q4 FY2022. Adjusted EBITDA loss in Q4 FY2023 was ($96M), a $36M improvement in Adjusted EBITDA loss as compared to Q4 FY2022. Free Cash Flow in Q4 FY2023 was an outflow of $143M, a 13% increase in outflow as compared to Q4 FY2022. Cash and short-term investments were $783M at March 31, 2023, representing a decrease of $589M from $1,372M at March 31, 2022. Notably: the company overstated BioSteel revenue by $10M for FY2022 and $14M for the 9 months ended 12/31/22.
StateHouse extension of Series A debt obligations to July 3rd, 2023. The Company continues to engage in discussions around future financing options.
Greenlane Regains Compliance with Nasdaq Listing Requirements. The company effected a one-for-10 reverse stock split of its Class A common stock on June 5th, 2023 to help maintain a minimum closing bid price of $1.00 or more for at least 10 consecutive trading day.
🏬 Retail
Viola Brands opens the first of two dispensaries in Chicago. Viola Chi is led by Dan Pettigrew, a Hyde Park cannabis industry veteran, and business partner Al Lomax. Pettigrew co-founded Viola Brands with Al Harrington in Denver in 2011. After the Broadview dispensary, they plan to open another later this year in Lincoln Park.
GTI to Open RISE Dispensary Danville, its 6th in VA and 83rd Nationwide. GTI entered the Virginia market in 2021 and currently operates a production facility in Abingdon where the Company produces its branded products, including incredibles gummies, Dogwalkers pre-rolls, Good Green flower, Doctor Solomon’s tinctures, and &Shine vapes and flower. RISE Dispensary Danville joins the Company’s existing stores in Abingdon, Bristol, Christiansburg, Lynchburg, and Salem.
🌱 Product
MariMed’s Betty’s Eddies™ Introduces Limited-Edition THC and CBG Infused Beachtime Betty’s. Available this summer at select cannabis retailers throughout Massachusetts, Maryland, and Delaware, each Beachtime Betty is infused with a relaxing combination of THC (5mg or 10mg, depending on the state) and the minor cannabinoid CBG (5mg) that may deliver both calming and energizing effects. Beachtime Betty’s celebrates summer’s iconic flavors by melding tart and refreshing lemonade with real, organic, just-picked strawberries. Vitamins C and D are added as essential vitamins to promote skin health and create an easy, energized feeling for a true summer vibe.
Cova Launches Its Own Cannabis Payment Solution in Canada. Cova Pay is a modern payment processing solution for cannabis stores. Cova Pay integrates seamlessly with Cova Point of Sale and enables cannabis retailers to accept and process debit and credit card payments directly through the POS provider, eliminating the need for third-party payment contracts.
Jetty Extracts Expands Into Colorado. Following a recent launch in New York, California's #1 Solventless Vape will be available to Colorado consumers in a variety of strains, including Sour Mash (S) Red Delicious (S) El Pastel (S) Grape Cake (I) Food Fight (I), and Tally Ho (I). The Solventless product line is developed in partnership with Leiffa, an innovative cannabis cultivator, solventless extractor, and Colorado retailer.
🧔 People
Treez adds Suresh Khanna as President & COO. Khanna joins the company after several years as an executive advisor. Previous roles include CRO at Pilot, CRO and President at NextRoll, where he grew revenue from $3M to $150M, and Director of Inside Sales at Google.
🎙️ Interviews
Cannabis Scheduling, HERBL, Surviving a Shakeout | High Rise
Venterra Farms Keeps Its 5th-Generation Family Legacy Alive With Cannabis | Forbes
From $0 to $100M: How MJBiz & Wana Brands Grew Without Outside Funding | GMR