Aces Wild – GTI Confirms Cultivation License and Q2 Revenue of $44.7 Million

GTI secured a cultivation license and published Q2 results, Next Green Wave completed its first harvest, Aphria announced a strategic partnership and more.

 

The good news from Green Thumb Industries Inc (CSE: GTII) was piling up this week, after the company confirmed that it has been awarded a cultivation license by the Ohio Department of Commerce following an appeal. The cultivation operation will be located in Toledo as part of a processing and manufacturing facility that will also produce GTI's branded product portfolio.

The cultivation license supports GTI's processing facility currently under construction in Toledo and three Rise™ stores that opened earlier this year in Cleveland, Toledo and Lorain. Two additional Rise™ stores in Lakewood are on track to open later this year.

"We are grateful the Ohio Department of Commerce has awarded GTI the cultivation license we applied for in 2017 based on exemplary scores and look forward to further serving the people of Ohio as they seek relief with medical cannabis."

– GTI Founder and Chief Executive Officer, Ben Kovler

The company also reported its financial results for Q2 2019 this week, recording revenue increases of 228% year-over-year to $44.7 million.

Quarter-over-quarter revenue increased 60%, a record sequential growth for GTI. Revenue growth was driven by organic growth across the company's consumer products and retail businesses, strategic acquisitions and increased store traffic.

Gross margins before biological adjustments for the second quarter 2019 improved to 52% from 46% in the previous year—and from 47% in the prior quarter—due to increased operating efficiencies as the business continues to scale.

Additionally, GTI announced the launch of its Illinois Social Equity License Application Assistance Program (LEAP), which will help educate applicants about the adult-use cannabis business application process and prepare them to apply for the available categories of licenses.

They will also advise on accessing the Cannabis Business Development Fund's low-interest loans and grants for Social Equity Applicants and on obtaining application fee waivers. These services will be provided for free and GTI will not seek any type of fee, ownership or remuneration in exchange for its services. All information shared with GTI will remain confidential.

Green Thumb Industries CEO Ben Kovler discusses 'credentializing' cannabis stocks.

 

 

Cronos Group Inc (TSX: CRON) entered into a credit agreement—as administrative agent and lender—with Cronos Growing Company Inc, in respect of a $100 million secured non-revolving term loan credit facility.

Cronos Growing Company intends to use the funds available under the Credit Facility to fund the construction of the previously announced custom-built greenhouse and for general operating purposes. Completion of construction of the Facility is subject to obtaining the relevant building and occupancy permits and other customary approvals. Commencement of operations at Cronos Growing Company will be subject to obtaining the appropriate licenses under applicable law.

The Credit Facility is secured by substantially all present and after acquired property of Cronos Growing Company and its subsidiaries. The Greenhouse Partners have also provided a limited recourse guarantee in favour of the Company, secured by the Greenhouse Partners' shares in Cronos Growing Company.

"The management team at GrowCo have been great partners, and we value the expertise they continue to bring to this project."

–  CFO of Cronos Group, Jerry Barbato

 

 

Next Green Wave Holdings Inc (CSE: NGW) announced that it has successfully completed its first premium cannabis flower harvest and hit all major milestones to become fully operational this month. All 14 flower rooms have now been stocked with plants, 6 of which are in the flowering stage nearing harvest.

This future output will allow the Company to execute on its four revenue segments; nursery, cultivation, extraction and product distribution. The company's first harvest has passed strict California category three compliance testing and received a Certificate of Analysis (COA)* free of any microbial, mycotoxins, pesticides, heavy metals and foreign materials.

All the strains tested met premium quality industry standards for sale in California. The lack of licensed premium flower for sale in California opens the door for producers to take advantage of the underserved market.

Next Green Wave Chairman and CEO Leigh Hughes discusses NGW's purchase of SD Cannabis.

 

 

Impression Healthcare (ASX:IHL) has strengthened its Medical Advisory Board and announced a deal to supply Air Liquide Healthcare Australia with Sleep Apnoea devices.

Impression Healthcare will now supply Air Liquide Healthcare (ALH) with its Sleep Guardian 'Silensor' and 'Dorsal' mandibular advancement devices, which will then be distributed to ALH's to a network of 180 sleep clinics located throughout Australia. The deal gives Impression Healthcare exclusivity over all devices—that make use of dental impressions—that are used within AHL clinics.

The company has also made two key clinical appointments to its management team, adding Dr Rondhir Jithoo—a leading neurosurgeon based at the Alfred hospital in Melbourne and research fellow at the National Trauma Research Institute—and Dr Simon Hinckfuss, a leading periodontal specialist who is an experienced clinician, educator, researcher and celebrity TV dental specialist.

These appointments should prove advantageous for the company, as both Jithoo and Hinckfuss are considered to be key opinion leaders in their respective fields of Traumatic Brain Injuries and Periodontal Disease.

"We're delighted to enter such an impactful partnership with Air Liquide Healthcare Australia to further grow the partnerships and revenue potential of our oral devices division. This agreement demonstrates our commitment to ameliorating sleep apnoea and ALH is the perfect partner for us due to its extensive collective experience and networks related to the treatment of sleep apnoea in Australia, and we are now a strong part of ALH's product mix."

– Managing Director and CEO of Impression Healthcare, Joel Latham

 

 

Tilray Inc (NASDAQ:TLRY) announced that its wholly-owned subsidiary—Tilray Portugal Unipessoal Lda—has completed a successful harvest of medical cannabis at the Company's European Union (EU) Campus in Portugal.

Tilray's EU Campus in Portugal is a multi-faceted production facility that includes indoor, outdoor and greenhouse cultivation sites, as well as research labs, processing, packaging and distribution sites for medical cannabis and cannabinoid-derived medical products. To date, Tilray has invested approximately €20 million in the facility, which totals nearly 250,000 square-feet with additional room to expand.

Tilray's EU Campus also serves as a hub supporting Tilray's clinical research and product development efforts across Europe. Tilray's EU Campus currently employs 100 people, and that number is expected to double by the end of 2019, with production ramping up and multiple harvests anticipated in the coming months.

Tilay CEO Brendan Kennedy discusses the company's profitability outlook and plans to export medical cannabis from Portugal to Germany.

 

Green Growth Brands Inc (CSE: GGB) announced the closing of its previously announced "bought deal" short form prospectus offering of units of the company for aggregate gross proceeds of C$50,225,000.

Under the offering the company sold a total of 20,500,000 Units at a price of C$2.45 per unit.  Each unit is comprised of one common share and one half of one common share purchase warrant of the company.

?The net proceeds of the offering are expected to be used by the company to fund the balance of the cash purchase price payable in connection with its acquisition of Nevada Organic Remedies LLC, the cash portion of the purchase price payable by the company to complete its acquisition of Henderson Organic Remedies LLC, the deferred cash compensation and certain other fees payable in connection with the company's acquisition of Spring Oaks Greenhouses.

 "We are pleased to announce the completion of our first equity raise as a public company since our October 2018 RTO."

– Green Growth Brands CEO, Peter Horvath

 

 

Aphria Inc (NYSE: APHA) and ParcelPal Technology Inc announced a strategic partnership for the delivery of the former's medical cannabis products.

The distribution and delivery will commence in Calgary, Alberta, but expansion into other areas is expected to follow shortly. Aphria will be providing the cannabis products and online point of sale, while ParcelPal will be in charge of distribution, leveraging its delivery apps. Patients will also be able to track their deliveries in real time.

Commenting on the deal, Brian Storseth, Chairman of the Board of ParcelPal, said, "We are thrilled to be working with Aphria, one of the largest LPs in Canada, and a major international player in the cannabis industry, by offering them and their clients access to deliveries starting with Calgary, Windsor and Toronto and expanding from there across Canada."

Aphria interim CEO Irwin Simon discusses the biggest opportunities in the Canadian market.

 

 

Canopy Rivers Inc (TSXV: RIV) released its financial results for the three months ending June 30, 2019.

During Q1 2020, Canopy Rivers generated operating income of $2.7 million, primarily driven by royalty, interest, and lease income generated from the following:

  • Royalty and debenture agreements with Agripharm, Greenhouse Juice, JWC, and Radicle;
  • A lease agreement with Spot Therapeutics Inc;
  • A shareholder loan agreement with PharmHouse;
  • An additional $1.5 million net increase in the fair value of certain financial assets that are reported at fair value through profit or loss.

Operating expenses for Q1 2020 were $5.8 million, of which $3.7 million (or approximately 64% of the total) related to share-based compensation.

"We continue to maintain financial focus and discipline while looking to seize on exciting opportunities during a period of operational ramp-up in our portfolio and the cannabis sector more broadly."

– Chief Financial Officer of Canopy Rivers, Eddie Lucarelli

 

 

Curaleaf Holdings Inc (CSE: CURA) reported its financial and operating results for the second quarter ending June 30, 2019.

The company reported record quarterly pro forma revenue of $110.9 million, managed revenue of $55.1 million and Adjusted EBITDA of $3.4 million. The quarter also saw Curaleaf announce the acquisition of Select—the leading cannabis wholesale brand in the U.S.—along with Glendale Greenhouse and Phytotherapeutics Management Services.

"We have made significant progress over the last few months in executing on our strategy to become the leading vertically integrated multi-state cannabis operator in the United States."

– Curaleaf CEO, Joseph Lusardi

This week the company also announced a sale-leaseback agreement with Freehold Properties valued at approximately $28.3 million for six of its properties in Florida, Massachusetts and New Jersey.

As a result of the transaction, Curaleaf will have sold a portion of its real estate assets while retaining use of the properties for cultivation, processing and retail, respectively. The sale price of $28.3 million for the six properties covers initial investment plus all tenant improvements made to date and the proceeds will go towards Curaleaf's continued expansion in the United States.

In addition, Curaleaf intends to access further real estate capital to finance additional operational facilities and certain current expansionary construction projects.

Curaleaf Chairman Boris Jordan discusses the company's growth prospects.

 

 

Cresco Labs Inc (CSE: CL) also released its unaudited financial results for the second quarter ending June 30, 2019.

The company reported second quarter revenue of $29.9 million, up 253% year-over-year and 42% quarter-over-quarter. Second quarter pro forma revenue increased 55% quarter-over-quarter to $52.7 million, which includes the impact of pending acquisitions and investments.

During the quarter Cresco also received regulatory approval for its acquisition of Valley Agriceuticals, LLC, providing the Company with one of 10 vertically integrated licenses granted in the State of New York.

"We delivered an outstanding quarter that reflects the leading positions we have established in some of the most attractive markets in the cannabis industry."

– Co-founder and CEO of Cresco Labs, Charles Bachtell

 

 

CV Sciences Inc (OTCQB:CVSI) announced that Terri Funk Graham has been appointed to CV Sciences' Board of Directors effective August 22, 2019.

Ms. Graham joins the Board of Directors with vast experience serving on the Board of Fortune 1000 companies. She is currently an Independent Board Director for Sprouts Farmers Market Inc, and also an Independent Board Director for Lumber Liquidators Inc.

She also served on the Hot Topic Inc and 1-800 Contacts Inc Boards before these companies were sold to private equity firms.

CV Sciences CEO Joseph Dowling discusses CBD's future in modern health care.

 

 

Finally, TerrAscend Corp (CSE: TER) reported financial results for the second quarter ending June 30, 2019.

The company  generated revenue of $17.6 million, an increase of 21% from $14.6 million in the first quarter of 2019 and compared with $0.01 million in the comparable second quarter of 2018.

As of June 30, 2019, the company held $17 million in cash and cash equivalents. On May 27, 2019, the company closed the previously announced private placement with total proceeds of approximately $69 million.

"We continue to focus on improving margins, which will be fueled by cost effective strategic supply agreements that provide access to bulk dry flower and extract-based cannabinoids while maintaining TerrAscend's standards for quality and consistency."

– TerrAscend CEO, Michael Nashat

 

 

Watch this space for further updates.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.

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