Weekly: Cannabis + late-night talk shows
CT Governor signs Cannabis Legalization into Law. PharmaCann — $85M, 12% Senior Secured Notes. High Tide — Acquires Daily High Club for $10M. Michigan adult-use Cannabis sales ($104M) down 1% in May.
A few updates:
Changed domain from dai.substack.com to www.highlyobjective.com, new logo to go along with it (any feedback on this would be appreciated)
Launched LinkedIn page, which you should follow for more regular updates, putting efforts on LinkedIn vs. Twitter (for now)
Daily newsletter launched this past week (see below), which pretty much includes 90%+ of relevant stories on the day that may not make the weekly newsletter
Monday: The Valens Company completes acquisition of Leading US CBD Company, Green Roads
Tuesday: Connecticut Governor Signs Cannabis Legalization Into Law
Wednesday: Jimmy Kimmel & Conan O'Brien both run Cannabis segments
Thursday: United Nations calls for global ban on cannabis advertising
Friday/Saturday: GTI CEO expects Americans will be able to purchase/consume cannabis products in lots of different places by 2025
🌿Industry
Jimmy Kimmel Segment on Emjay features LEUNE, WYLD, Cann, and Wunder. Jimmy Kimmel Live! reached out to Emjay after the Company received 1,100+ applications for its summer intern — to test products.
Conan O'Brien smokes with Seth Rogen on CONAN.
United Nations calls for global ban on cannabis advertising. The United Nations on Thursday called for a global ban on all advertising that promotes cannabis products, in a move that it said could mimic its efforts to lead a global effort to limit tobacco marketing and use.
Connecticut Governor Signs Marijuana Legalization Into Law. The governor of Connecticut on Tuesday signed a bill to legalize marijuana—making it the 19th state to enact the reform. Connecticut is the fourth state to legalize cannabis for adult use this year alone, following New York, Virginia and New Mexico.
The CEOs of two of the biggest US cannabis companies break down the future of the industry to an exclusive audience of Wall Street’s most powerful investors. GTI CEO Ben Kovler and Trulieve CEO Kim Rivers spoke at JP Morgan’s Robin Hood Investors Conference, a yearly conference of investors, policymakers, and academics on June 16th. Trulieve’s Rivers said she expects the demand for legal cannabis to skyrocket, likening it to investing in alcohol before the end of prohibition, according to information provided by a person in attendance. She said that companies and investors have an opportunity to build the industry from the ground up. Kovler said that by 2025, he expects that Americans will be able to purchase and consume cannabis products in lots of different places — potentially in restaurants, bars, and grocery stores — rather than just dispensaries.
Michigan Adult-Use Cannabis Sales Down 1% Sequentially in May as Prices Plunge. The Michigan Marijuana Regulatory Agency breaks out sales by medical and adult-use, with medical sales falling 1.5% from a year ago to $44.5 million, down 8% sequentially, and adult-use sales increasing 165.6% to $104.4 million, down 1% sequentially. As supply continues to expand, flower pricing for adult-use has seen a dramatic decline. In May, the average price of $3539 per pound fell 10% from April and 46% from a year ago.
Rhode Island Senate Approves Bill to Legalize Marijuana for Adults. With little time remaining in the regular legislative session, the Rhode Island Senate has approved a bill to legalize the possession, purchase, and cultivation of cannabis for personal use for adults 21 and older. The original proposal was introduced in March and amended last week by the Rhode Island Senate Judiciary Committee.
Other highlights:Lessons from California’s Pot Industry Bailout
Former officers and directors of CannTrust charged with Securities Act Offences
Leafly “Seeds of Change” report rates states on cannabis equity, finds most lacking
90+ Cannabis Delivery License Applications Begin in Massachusetts
Lemon Grove (San Diego County) approves recreational cannabis sales
Not all THC analysis is created equal
New Report Finds First-Time Cannabis Use Surging Among Women And Gen Z
Maine’s mom and pop weed scene sweats corporate “gentrification”
Two convicted in Eaze bank fraud case sentenced to prison
💵Deals
PharmaCann — Completes $85M, 12% Senior Secured Notes Offering due June 30, 2025. The net proceeds from the offering were ~$79.9 million, after the original issue discount and other estimated offering expenses, and will be used for strategic growth opportunities and general corporate purposes.
High Tide — Continues to Expand U.S. E-Commerce Presence Through Acquisition of Daily High Club. Daily High Club's consumption accessories subscription box model has 15,000+ active monthly subscribers. Total consideration to Daily High Club shareholders will be $10M and Daily High Club is expected to have approximately $800K of cash on closing. The consideration will be comprised of: (i) $6.75M in common shares of High Tide (based on 10-day VWAP) and (ii) $3.25M in cash.
The Valens Company — Completes Acquisition of Leading US CBD Company, Green Roads. The cash and share transaction consideration totaled $40 million (~1.8x 2020 revenue), plus up to an additional $20 million in contingent consideration payable upon the purchased business achieving certain EBITDA milestones. If all the Milestones are met in 2022, the transaction represents ~4.5x fiscal 2022E EBITDA.
Little Green Pharma — Accelerates Growth Strategy with Acquisition of World-Class Production and Manufacturing Facility in Denmark for C$20M from Canopy Growth. Little Green Pharma Ltd (ASX: LGP) has acquired a world-class, fully-operational, GMP medicinal cannabis cultivation and manufacturing facility in Denmark from Canopy Growth Corporation (TSX:WEED, NASDAQ: CGC). The C$20M acquisition of the 21,500 m2 cultivation and 4,000 m2 GMP manufacturing facility positions LGP as the leading Australian medicinal cannabis producer and owner of one of the largest and highest-quality cannabis production facilities in Europe.
House of Wise — Raises $2M; Launches Full Line of Organic CBD Products to Help Women Take Control of Sleep, Sex, and Stress. The series seed round was led by Sugar Capital, with participation from Selva Ventures, Max Ventures, Dream Ventures, and notable strategic angels NBA Star Baron Davis, Fabletics Co-founder Jack McCue, Former President & COO of Focus Brands, Kat Cole, and leading millennial women's podcast platform Dear Media.
Mile High Labs and Brightfield Group Launch Innovation Platform to Fuel Next Generation of Novel Consumer Products. Mile High Innovation Lab is a product development platform purpose-built to give brands the confidence to develop, launch and scale new products in the health and wellness industry. Select Partners join the Innovation Lab to leverage Mile High Labs' R&D and manufacturing expertise, Royal DSM's global library of unique vitamin and mineral combinations and Brightfield Group's in-home consumer surveys to bring innovative product concepts to life.
Canopy Growth -- Completes Acquisition of Supreme. Canopy issued ~9,013,400 Canopy Shares (valued at $212M) and made a cash payment of ~$84K. The acquisition of Supreme further strengthens Canopy’s overall leadership position within the Canadian recreational market and creates a pro forma Q4 FY 2021 market share of 18.1%
AFC Gamma — Raises $56.4M @$20.50/Share. AFC Gamma priced its public offering of 2,750,000 shares of its common stock at a public offering price of $20.50 per share. AFC Gamma anticipates total gross proceeds of ~$56.4 million. The Offering is expected to close on or about June 28, 2021.
Fire & Flower -- Exercise of Series A-3 Warrants by Alimentation Couche-Tard. Exercise of warrants brings Circle K owner, Alimentation Couche-Tard to 22.35% ownership of Fire & Flower.
Other highlights:Trulieve — Expiration of HSR Act Waiting Period for the Proposed Acquisition of Harvest Health & Recreation.
Mercer Park Brand Acquisition Corp. — Sets Closing Date of June 29th for Merger with Glass House Group.
Binske — Licensing Deal with Michigan Cannabis Cultivator, Six Labs.
Agrify — Expands Relationship with Current Customer Nevada Holistic Medicine, Further Increases Presence in Attractive Nevada Market.
The Green Organic Dutchman (TGOD) — Closes $27M Sale of its Quebec Facility to Cannara Biotech.
📄Earnings / Corporate Updates
Body and Mind — Q3 2021 Financial Results
Revenue: $7.2M, a 13% increase over Q2 FY2021 ($6.3M), and a 580% increase over Q3 FY2020 ($1.05M)
Adjusted EBITDA: $1.5M, an improvement of 133% over Q2 FY2021 ($0.7M)
Cash: $1.3M (as of April 30, 2021)
Australis Corporation — Changes Name to Audacious Brands and Operationalizes Missouri Asset. The Company has decided to rename its operations focused on the U.S. adult use market to Audacious Brands. The operation in Missouri, which the Company is acquiring as part of the Green Therapeutics transaction, has received its license to operate. Once the license transfer is complete, Audacious will own 25% of a processing and manufacturing license. Missouri is a medical market that has been operational since October 2020.
🧔People
Charlotte's Web — appoints former Canopy Growth Executive, Tim Saunders, to Board of Directors. During his tenure at Canopy, he oversaw more than C$6.4 billion in financings, 31 acquisitions, and an increase in market capitalization from ~C$100 million to C$20 billion.
Tetra Bio-Pharma — CFO Departs. Jean-François Boily has resigned as CFO of the Corporation effective July 16th, 2021 to pursue another business opportunity.
🏬Retail
Curaleaf — Expands Presence in New Jersey with New Dispensary and Cultivation Facility. Curaleaf Edgewater Park, the Company's second dispensary in New Jersey and 107th dispensary nationwide is a 7,640 square foot dispensary conveniently located off the Burlington Pike at 4237 Route 130 South.
Trulieve Expands Winter Park, FL Location. The dispensary (85th in FL) expands access throughout Central Florida, joining four locations throughout nearby Orlando.
Cresco Labs — Opening of Sunnyside Philadelphia, Its Fourth Dispensary in Pennsylvania and 33rd Operating U.S. Store. Sunnyside Philadelphia is 5,500+ sq ft and will feature 10 POS.
Ayr Wellness — Opens Third Pennsylvania Dispensary in Gibsonia, PA. The 8,000 sq. ft. facility has 45 parking spaces and is designed to fit up to 30 point-of-sale (POS) stations.
Ayr Wellness — Launch of Big Pete’s Cookies, Opens New Dispensary in Spring Hill. Big Pete’s is the first of many edibles brands Ayr will bring to the Florida market following the approval and opening of its industrial kitchen and manufacturing facility earlier this month. The Company also opened Liberty Health Sciences (Liberty) in Spring Hill, FL, the Company’s 36th open dispensary in the state. The Spring Hill dispensary is located at 2356 Commercial Way, Spring Hill, FL 34606.
Planet 13 — adds Select and STIIIZY Store-in-Stores at Orange County SuperStore. The first two partners that the Company will host at P13 OC are Select and STIIIZY— two of California's most prominent brands. The Orange County SuperStore is located at 3400 W Warner Ave Santa Ana, CA and set to open on July 1, 2021. The SuperStore has been planned as a 55,000 square-foot consumer experience, with 16,500 square-feet devoted to the dispensary retail area. The remaining areas in the complex, to be built as phases 2 and 3, are expected to include memorabilia sales, ancillary retail and a cannabis consumption lounge, all enhanced by additional immersive experiences.
STIIIZY — Wildomar, CA (9th store).
COOKIES — Santa Ana, CA Store Opens.
New Standard Cannabis — Flagship Hazel Park Location wins First Place in Detroit Design Awards. New Standard opened its first provisioning center in Hazel Park in April of 2020. Expanding across Michigan with current locations in Grand Haven, Hazel Park, Edmore, Nunica and Sand Lake.
Lume Cannabis Co. and 313 Presents — Exclusive Cannabis Partnership for Michigan's legendary DTE Energy Music Theatre. Per the five-year agreement, DTE Energy Music Theatre will include Lume branding throughout the venue, including widespread signage, a dedicated 6,000 square-foot "Tree House" lounge and satellite activations throughout the venue.
🌱Product
CannaCraft — Gem + Jane in California. Gem + Jane is a women-focused sparkling botanical beverage that blends simple ingredients with microdoses of rare cannabinoids, including THCV, Delta-8 THC and CBD. The beverage will be available exclusively at Sweet Flower dispensary locations throughout greater Los Angeles beginning June 17th.
🎙️Interviews
High-Rise: Cannabis MSOs, Products & Market Analysis— The state of the cannabis capital markets, cannabis 2.0 and what’s next for 3.0 w/ Todd Harrison (CB1Capital).
CannaInsider — A Wave of Capital Is Heading for Cannabis, Insider Gives Details. Is cannabis the largest investment trend of this generation? Here to tell us why we’re about to see a wave of capital move into the industry is Todd Harrison of CB1 Capital.
Cannabis Investing Network — Why We're Bullish on Limited License States (ft. Andrew Semple of Echelon Wealth Partners)
Gage Growth CEO Fabian Monaco. Dominant players have yet to emerge in markets like California and Colorado. Gage is aggressively pursuing the opportunity to be a dominant player in the Michigan market in the near term. After achieving that goal, the company will be looking to expand into other states and become an MSO.
New York’s Big Marijuana Moves. Jeremy Berke (Business Insider) joins host Ben Larson to talk about the rumored embrace of cannabis companies by the Toronto Stock Exchange, the substantial cannabis reform enacted in New York and the business opportunities soon to flow, and the latest news out of international cannabis.
Cannabis Cocktails Will Be Everywhere—But Are They Even Any Good?
💻Hiring
Power REIT — Head of Acquisitions (Remote)
Curaleaf — Director, Strategy and Business Development (LA)
Cookies — Senior Vice President Operations (SF)