š°Vireo Growth Closes Oversubscribed $81M Equity Offering
Agrify exits Cultivation Business to former CEO for $7M. PharmaCann defaults on all IIP Leases. FLUENT and RIV Capital complete merger. Standard Wellness Secures $10M Credit Facility at 9.25%.
Hope everyoneās 2025 is off to a strong start! I debated sending out the first newsletter of the year last Friday but news seemed light the prior two weeks.
So youāll see news that may be 2-3 weeks old but in the spirit of capturing everything newsworthy since the last newsletter (December 18), theyāre included below.
šæ Industry
Florida judge nixes plans for GTI dispensaries adjacent to convenience stores. State regulators didnāt do anything wrong when they rejected GTIās request to open dispensaries near or adjacent to convenience stores. ā WMNF
An October 2022 news release said GTI intended to launch a ātest and learn phaseā of the plan with 10 dispensaries adjacent to Circle Kās in various parts of Florida beginning in January 2023
GTI in early 2023 sought approval for a dispensary located adjacent to a Circle K in St. Petersburg, but the plan was nixed by Office of Medical Marijuana Use Director Christopher Kimball
Kimball also shot down GTIās proposals to open dispensaries located near Circle K stores in Ocala and Orlando, saying the plans did not comply with state law for a variety of reasons
Finance experts mixed on prospects of marijuana capital infusion post-rescheduling. Perspectives about the likelihood a tsunami of capital will hit the industry if and when rescheduling occurs are mixed. ā MJBizDaily
Rescheduling would likely ease banking restrictions, paving the way for institutional investors, PE and other funding sources that have been cautious
Cannabis investor sentiment is leaning negative, driven by significant barriers to entry due to financial institution restrictions
Since cannabis is irrationally overly punished on the downside, it stands to reason it can also rationally or irrationally benefit on the upside
Hemp Bill Backed By MSOs, Governor Fails In Illinois House In Lame-Duck Session. The Illinois hemp industry and the mayor of Chicago mobilized against the governor to block broad new state regulations on hemp-derived THC. ā Patch
A proposal to impose a series of new regulations on hemp-derived THC products failed to pass the 103rd Illinois General Assembly
Backed by Gov. J.B. Pritzker and the lobby for the state-regulated but federally illegal cannabis industry, the bill faced opposition from the hemp-derived and CBD product industry, which is federally legal but largely unregulated at a state and local level
Missouri cannabis regulators announce new rules to target āpredatoryā contracts. Of the 96 microlicenses issued so far, 41 have either been revoked or are currently at risk of being revoked. Another three are under investigation. ā Missouri Independent
A majority of those 44 licenses are connected to groups or individuals who flooded the lottery by recruiting people to submit applications and then offering them contracts that limited their profit and control of the business
By law, the state must award a total of 144 licenses to disadvantaged business owners, over the course of three lotteries. The state has already conducted two lotteries, but thereās not a definitive deadline to conduct the final round and meet the goal
Cannabis sales near a billion dollars since legalization in Montana in 2022. Montana Cannabis sales came in just under $300M from January through this November. Thatās the latest month data is available through the Montana Cannabis Control Division. ā Montana Public Radio
That brings total sales to over $920M since January 2022 ā the month recreational sales began. With ~$25M in average monthly sales, that positions the industry to cross the billion dollar threshold in the first quarter of next year
Delaware awards 15 retail licenses for dispensaries
Ohio sold $242M Worth Of Recreational Cannabis in 5 months in 2024
New York Office of Cannabis Management projects sales could exceed $1.5B in 2025
On Dec. 21, New Jersey surpassed $1 billion in combined medicinal and recreational sales for 2024, up 25% from the previous yearās total
After six years, Oklahoma's cannabis industry faces steep plunge in numbers. According to data published by the Oklahoma Medical Marijuana Authority, there were ~5,800 licensed as of December 2024. A year ago, there were over 8,700
šµ Deals
Agrify Closes Sale of Cultivation Business. The company has signed an agreement for and closed the sale of its cultivation business to CP Acquisitions, LLC (CP), an entity affiliated with Raymond Chang, the Companyās former Chairman and CEO. The Transaction involves the sale of the Agrify cultivation business and assets, the assumption of liabilities related to the cultivation business by CP, and the termination of two convertible notes held by CP totaling ~$7M. On December 31, 2024, Agrify signed an Asset Purchase Agreement for the Transaction with CP and simultaneously closed the Transaction. Under the Asset Purchase Agreement, CP agreed to acquire all assets related to the cultivation portions of the Agrify business from the Company, including but not limited to, the Companyās Vertical Farming Units (VFUs), the related Agrify total-turnkey (TTK) solution assets and Agrify InsightsTM software solutions (collectively the āCultivation Businessā).
Vireo Growth Closes Oversubscribed $81M Equity Offering. Investors who participated in the Offering subscribed for 129,536,874 Subordinate Voting Shares at a share price of $0.625, a 16.8% premium to the closing share price on the OTCQX on December 27, 2024. The Offering raised gross proceeds of ~$81 million, which includes a portion of the oversubscribed demand from the initially planned ~$75M equity raise. The Company intends to use the net proceeds from the Offering for business development, including organic and acquisitive growth investments, as well as working capital and general corporate purposes.
PharmaCann defaults on all IIP Leases. Innovative Industrial Properties (IIP), through indirect, wholly owned subsidiaries serving as landlords, previously entered into leases (collectively, the Leases) with PharmaCann and its affiliates (collectively, PharmaCann) as tenants for eleven properties that IIP owns, which represented 17% of IIPās total rental revenues for the three and nine months ended September 30, 2024.
FLUENT and RIV Capital complete merger. Under the terms of the Arrangement Agreement, RIV Capital shareholders received 1.245 of a common share of FLUENT in exchange for each RIV Capital Share held. As a result, shareholders of FLUENT hold ~51.25% of the combined business of FLUENT and RIV Capital and the RIV Capital Shareholders and The Hawthorne Collective, together, hold ~48.75% of the Combined Company, each on a fully diluted basis. The Combined Company will continue to operate under the FLUENT name and the FLUENT Shares will continue to trade on the CSE under the symbol āTIUM.Uā and on the OTCQB Venture Market under the symbol āCNTMFā. Under the terms of the Arrangement Agreement, Robert Beasley has been named CEO of the Combined Company.
Ascend Wellness Holdings Share Buyback Program. Pursuant to a normal course issuer bid (NCIB) commenced on January 2, 2025, the Company may repurchase up to the lesser of: (i) 10,215,690 shares of the Company's class A common stock, representing ~5.0% of AWH's outstanding Common Shares; and (ii) $2.25M worth of Common Shares, in the open market. As of December 24, 2024, there were a total of 204,313,808 issued and outstanding Common Shares.
iAnthus Acquires Lifestyle Vape Brand Cheetah. The purchase price of $1.5M in stock will be issued in three (3) tranches. The Shares are issued at a deemed price of $0.012, which is a premium to the current market price for the Shares. The Purchase Price also includes non-material cash payments in four (4) installments payable upon completion of certain performance benchmarks and additional earnout consideration based on EBITDA generated by the Brand after closing and certain other performance metrics, payable in cash at various intervals until April 1, 2028.
Standard Wellness Secures $10M Credit Facility at 9.25% Rate to Refinance Debt. The 10-year term loan amortizing over 20 years with a competitive 9.25% interest rate, will support the Company's continued growth initiatives and operational expansion. The facility also enabled partial repayment of higher-cost debt, which carries a 13.5% interest rate and matures in Q3 2026.
Body and Mind Divestment of cultivation and processing operations in Nevada reduced from $2M to $200K. The Nevada cultivation and production divestment was initially entered into on January 31, 2024 by way of a membership interest purchase agreement (MIPA) between DEP Nevada, Inc. (DEP), BAMās wholly owned subsidiary, and Vegas Brazil LLC (Buyer), whereby DEP shall sell all of the issued and outstanding membership interests in Nevada Medical Group, LLC (NMG) to the Buyer. Vegas Brazil LLC (the Buyer and the "Assignor") has elected to assign all of its rights and obligations under the MIPA to Fox Farms LLC (the "Assignee") with a first amendment to the MIPA (the "First Amendment"), including fully removing the Buyer/Assignor from the MIPA and all schedules and exhibits, modification of the purchase price from $2,000,000 to $400,000, of which $200,000 has been paid as a deposit by the Assignee to DEP. A further $200,000 (the "Loan") shall be delivered by the Assignee to DEP as a promissory note (the "Note") and such Note shall be secured by a personal guaranty given in favor of DEP by an affiliate of the Assignee.
š Company Updates
Klutch Cannabis to Rebrand Dispensaries and Launch Cookies Products in January 2025. The company will rebrand its dispensaries in Canton, OH and Lorain, OH from "The Citizen by Klutch" to "Klutch Cannabis" on January 15th, fully aligning its retail operations under the Klutch brand. Additionally, Klutch will begin selling Cookies-branded flower products at its dispensaries on Friday, January 17th.
Safe Harbor Financial Modifies Commercial Alliance Agreement with Partner Colorado Credit Union. As a result, the $1.2M of indemnity liability reported on the balance sheet as of September 30, 2024, has been eliminated, and went into effect on January 1, 2025. In addition, as Safe Harbor continues to facilitate loans for its clients with PCCU, the Company will no longer be required to record a loan loss reserve on its income statement.
Stiiizy customer records acquired during data breach when its PoS vendor experienced a security breach around Oct. 10-Nov. 10, 2024. Identifying details included on government-issued ID cards ā such as name, address, date of birth and signature ā were accessed during the breach, though Stiiizy said not all data was shared about every customer.
Keef Brands reports sales of $18.9M from JanuaryāAugust 2024āa 26% increase over the same period in 2023.
MariMed Commences Wholesale Operations in Missouri. This latest expansion increases MariMedās revenue-generating operations to six states, joining its established presence in Delaware, Illinois, Maryland, Massachusetts, and Ohio.
BLAZEĀ® POS Integrates with Sage to Streamline Accounting for Enterprise Cannabis Retailers. With this integration, cannabis retailers can complete daily accounting tasks with just a few clicks. The integration, facilitated by Alembic Computer Services, Inc.'s software connector, also provides detailed, store-level financial data across multiple states, empowering enterprise retailers to make informed decisions and scale effectively.
Organigram Q4 and FY 2024 Results. FY 2024 net revenue of $159.8M, up 17.6% Y/Y, Q4 adjusted GM of 37%, adjusted EBITDA of $5.9M (13% margin), cash flow from operations of $8.9M.
š¬ Retail
C3 Industries opens second dispensary in New Jersey (Somerdale)
Trulieve opens dispensary in Maricopa, AZ
Planet 13 opens 30th dispensary in Florida (Panama City) and 34th nationwide
The Flowery opens 4th dispensary in New York City (Williamsburg)
Terrapin opens 1st Pennsylvania Dispensary (Bellefonte)
The Cannabist Company opens third dispensary in NJ (Mays Landing)
š± Product
The Hemp Company by Curaleaf Celebrates Dry January with Debut of 2.5 mg Select Zero Proof Hemp Seltzer, New Flavors. Select Zero Proof Seltzer is a delicious, fast-acting beverage now available in 2.5 mg hemp THC, in addition to the 5 mg can, which was launched in Summer 2024. The new flavors and dosage options are now available via major retailers and on-demand delivery services in select states, as well as through the Company's online storefront, TheHempCompany.com. They can also be found at Curaleaf retail stores in New Jersey, Arizona, and Maine, with additional states coming soon.
FLUENT Unveils Bag-O: A New Value Brand for Florida Medical Marijuana Patients. Bag-O products will initially be available in 14-gram bags, each packaged in Floridaās new āpeekabooā mylar bags, giving customers a clear view of the flowerās quality, color and texture before making a purchase.
š§ People
Canopy Growth names current Board member Luc Mongeau as CEO. Mongeau most recently served as CEO of ESolutions Furniture, formerly Bestar-Bush, North Americaās leading e-commerce provider for residential and commercial furniture. He has previously held the role of President for Weston Foods, one of North Americaās premier bakeries, as well as President of Mars Petcare North America, the core business unit of the worldās largest pet care company.
Canopy USA Announces Appointment of Brooks Jorgensen as President. Jorgensen joins Canopy USA with more than 25 years of leadership experience in high-growth industries, including cannabis, wine, and spirits. Most recently, MrJorgensen served as President of Kiva Sales and Service, growing it to what is now the largest full-service distributor of cannabis products in the U.S.
WM Technology Names Sarah Griffis CTO. Prior to joining Weedmaps, Griffis spent three years as CTO at Cerebral, a digital healthcare company improving access to mental health support. Griffisā previous roles included engineering leadership at GoodRx (NASDAQ: GDRX), preceded by two years at Kindbody.
iAnthus Announces Justin Vu as CFO. Vu was appointed to serve as Interim CFO on April 5, 2024 after joining iAnthus in early 2023 as VP Finance. Prior to joining iAnthus, Vu was a financial consultant and worked in various senior finance and accounting roles with a large US-based media and entertainment company.
Grown Rogue Appoints Andrew Marchington as CFO & Corporate Secretary. Marchington joined Grown Rogue as SVP, Finance in June 2023. Prior to that, he served Chalice Brands Ltd as the Finance Chief and as Controller of C21 Investments.
Lowell Farms Appoints Philippe Faraut as CFO. Faraut most recently served as CFO of iAnthus. Prior to that, as CFO of Irwin Naturals, Managing Partner at Bastiat Partners, Chief Investment Officer at Knight Global, and senior positions at Merrill Lynch, The Sage Group, and Intrepid Investment Bankers.
Interim director of Minnesota's Office of Cannabis Management steps down. Charlene Briner has been in charge of laying the groundwork for Minnesota's recreational marijuana industry, which has been slow to gel and recently had another setback when a pre-approval process for licensing was recently thrown out by a judge over equity concerns. Governor Walz has named the Office's general counsel Eric Taubel as the new interim director once Briner leaves her post mid-January.
šļø Interviews
How Queen ZuluāDr. MaciasāLost Her Home, Then Built A Cannabis Empire And Inspired Brittney Griner | Forbes
Data Transparency in Cannabis Testing with Yasha Khan, MCR Labs | Noid Knowledge
Conbud $800K/month in Revenue | CNBC
there seems to be very little coverage of the following :
my perception is that hemp THC (usually drinks) is now selling in EVERY state that does not have full recreational cannabis status. and not just through mail order, but through big box wine&beer distributors.
the prices seem very elevated for now, but probably just a matter of time and competition.
has cannabis media missed this? seems like headline news with repercussions for many of the biggest companies.