The cannabis industry was rocked this week when Canopy Growth Corporation (TSX:WEED) announced the shocking exit of co-CEO and company board member, Bruce Linton, who has agreed to step down from his role within the organisation.
Mark Zekulin has agreed to become the sole CEO of the company and will work with the Board to begin a search to identify a new leader to guide Canopy Growth in its next phase of development, which will include both internal and external candidates. Rade Kovacevic, a long-serving member of the team currently leading all Canadian operations and recreational strategy will assume the role of President. These changes are effective immediately.
The Board has also appointed John Bell as its Board Chair, to be reviewed at the Board's annual meeting in September when new board members are elected. Bell has served on the board as lead director for 5 years.
News of Linton's departure has caused Canopy Growth stock to enter a decline, with shares trading for 52.63 apiece as of 5 July, representing a decline of -0.44 on the previous day.
The Australian medicinal cannabis company, Creso Pharma Limited (ASX:CPH), disclosed the commencement of cannabis sales from its new Nova Scotia-based Mernova Medical facility. Sales of dried flower from the first harvest are part of a multi-year agreement that the company has signed, which will see revenue from the facility increase from C$150,000 to more than C$5 million by the end of 2019.The milestone was achieved following Creso Pharma's receipt of the necessary cultivation licenses in mid-February 2019, which will allow for the official commencement of commercial cultivation and B2B sales.
To meet the growing demand for high quality cannabis products, Creso Pharma has confirmed that it will produce two specific strains for wholesale B2B clients at its Halifax facility. This will be complimented by an additional five strains—pending sales license approval—that will be aimed purely at the retail market.
The company's management is confident in its ability to facilitate a commercial offering on this scale, as its purpose-built Mernova facility is predicted to generate approximately 700,000 grams of dried flower by the end of 2019. Results from the Mernova facility show that the company is also capable of producing some extremely high-quality cannabis. Recent harvests have been delivering spectacular results, with THC levels of 22.6% and 23.2% reported.
"Commencing sales at our Mernova facility in Canada marks an important milestone. We are now generating revenue in multiple markets. Canadian demand is rapidly growing and we are well positioned to help meet this demand."
– Co-Founder and CEO of Creso Pharma, Dr. Miri Halperin-Wernli
iAnthus Capital Holdings (CSE: IAN)—which owns, operates, and partners with best-in-class regulated cannabis operations across the United States—revealed that its US subsidiary has closed the previously announced acquisition of CBD For Life, a top-ranked, national CBD brand in the US.
CBD For Life has experienced accelerating revenue growth, from both existing customers and new account additions—representing approximately 50% quarter over quarter growth. Since announcing the Urban Outfitters relationship in mid-April 2019, the retailer has expanded the line-up of CBD For Life products it carries and the number of retail locations in which it offers them. CBD For Life's CBD-infused wellness, self-care, and beauty products have been featured in a wide range of cable, online, and print publications—including on NBC's Today Show and Telemundo47.
CBD For Life plans to leverage the iAnthus platform to launch additional product lines in the second half of 2019, including a luxury skincare line and an adult product line. Furthermore, iAnthus plans to expand CBD For Life's existing wholesale and retail platform to give more consumers access to its growing range of products—including international distribution planned for Q4 2019.
KushCo Holdings Inc (OTCQX: KSHB), announced that it has partnered with C.A. Fortune, a leading full-service national consumer products sales and marketing agency focused on lifestyle brand partnerships, to provide viable CBD companies access to large scale, conventional retail channels.
The groundbreaking partnership will be the first large scale go-to-market operation focused on helping compliant CBD brands achieve mass distribution across legal markets in the U.S. The combination of KushCo's extensive network of brands and specific hemp industry knowledge paired together with C.A. Fortune's industry-leading reach into all retail channels, will offer KushCo clients an additional avenue to activate their CBD products.
Since its launch in 1977, C.A. Fortune has grown into a national sales and marketing agency supporting major consumer packaged goods brands. Through its platform, C.A. Fortune works with brands to help them achieve nationwide coverage across the grocery, natural, big box, and e-comm channels.
"One of the challenges of building a national CBD brand is obtaining mass distribution into mainstream retailers across the U.S. and this partnership immediately upgrades the go-to-market plans for CBD brands."
– KushCo Holdings Chief Revenue Officer and President, Jason Vegotsky
High Tide Inc (CSE:HITI) filed its financial results for the second fiscal quarter of 2019, with revenue for the three months ending April 30, 2019 increasing by 325%, to $6,596 from $1,554 for the same period in the previous year.
Revenue for the six-month period ending April 30, 2019 also increased by 159%, from $4,477 to $11,596. The increases are primarily due to the acquisition of Grasscity, the retail cannabis operations of Canna Cabana which began generating revenue on October 27, 2018 and sales made to new customers in the company's Wholesale Segment. For the six months ended April 30, 2019, the Company generated a loss of $7,140 (2018 – loss of $71) and had net operating cash outflows of $7,104 (2018 – outflows of $10,552).
The loss and cash outflows are primarily driven by start-up costs to incorporate and staff High Tide and Canna Cabana, as well as from an increased amount of professional fees and rent paid. High Tide had a working capital surplus of $16,163 for the three months ending April 30, 2019 (October 31, 2018 – $14,920), mainly due to an increase in liabilities resulting from expanded operations as Canna Cabana began to operate and Grasscity was acquired.
Next Green Wave Holdings (CSE: NGW) announced the launch of its next exclusive cannabis product line with influential illustrator and artist Junkyard, through its subsidiary SDC Ventures LLC. The launch is part of the Company's strategic plan to secure distribution and introduce its brands and products to the California market as it enters into revenue.
Junkyard is a well-known illustrator and street artist with an established social and digital reach of enthusiasts who follow his artwork throughout California and the United States.
The first product to launch will be an oil extraction with limited release collectable packaging designed by the artist himself. Additional apparel releases and live painting appearances catering to craft cannabis culture will be announced throughout Southern California this summer.
"We're thrilled to be working with Junkyard and believe his loyal fanbase and individual brand will add further strong impetus to our growth and give us wider access potential to a niche consumer looking for distinguished and quality-based cannabis products."
– Next Green Wave CEO and Executive Director, Leigh Hughes
Tilray Inc (NASDAQ:TLRY), expanded its European leadership team with the appointment of Arne Wilkens as Vice President, Business Expansion, Europe; José Tempero as Medical Affairs Director, Europe; Maike Gerlach as Vice President, Marketing, Europe; and Nadja Frenzel as Vice President, Commercial Development, Europe.
In addition, Natalie Bucceri joins Tilray's international team as Director, Global Portfolio Expansion. The new senior appointments will work collaboratively with Tilray's robust team of experts across the globe to accelerate the company's aggressive European and international expansion strategy.
Tilray's multi-faceted EU Campus in Portugal, which recently received its manufacturing license and Good Manufacturing Practices (GMP) certification, will serve as the primary hub for the cultivation, processing, research and distribution of branded Tilray products throughout Europe and other international markets.
GrowGeneration Corp (OTCQX:GRWG) one of the largest specialty retail hydroponic and organic gardening stores, announced that it has completed an upsized, private placement totaling $12.8 million.
The company issued 4,123,254 shares at a price of $3.10 and 2,061,632 warrants exercisable at $3.50 per share. All of the company's strategic institutional investors participated in the offering, including $4.0 million investment from lead investor Gotham Green Partners, $2.0 million from Merida Capital Partners and $1.3 million from Navy Capital.
In addition to the company's three strategic investors, funds advised by JW Asset Management, LLC participated with a $3.0 million investment in this offering. These acquisitions, when completed, are expected to propel the company to over $100 million in annual sales.
"With the completion of our oversubscribed offering, the Company now has over $16 million of cash on the balance sheet to execute on multiple acquisitions, with several planned to close in the 3rd and 4th quarters of 2019."
– Co-Founder and CEO of GrowGen, Darren Lampert
Finally, Impression Healthcare Limited (ASX:IHL) announced that it has executed an exclusive research and supply agreement with Boxing Australia. Impression will supply BA with the FitGuard 'by Gameday' head impact monitoring platform, which will be used during training and competition by key elite Australian boxing athletes.
The agreement extends until June 2023 and the first delivery of FiTGuard units for year one of the agreement will be provided to the team of Olympic qualifiers for the 2020 Tokyo Olympic Games. The FiTGuard system will allow the sport's administrators to use a new set of data to further monitor the safety and performance of elite Australian boxers.
The agreement represents a significant brand-building and marketing opportunity for Impression, which has a growing oral devices business and a planned clinical trial for the use of pure Cannabidiol (CBD) oil to investigate the remediation of concussion and traumatic brain injury in sportspeople; scheduled to commence in Q3 of CY2019.
"With our CBD concussion clinical trial imminent, we're also delighted to have Boxing Australia on-board for our concussion research program"
– Impression Healthcare CEO, Mr Joel Latham
The company also announced this week that it had entered an agreement with Myoderm North America for the supply of Dronabinol and applied for an import permit from the Office of Drug control ('ODC') for its first batch of Dronabinol product for the trial. The company expects delivery of the batch within coming weeks; post receipt of permits.
Part of the Dronabinol shipment will be used in conjunction with other pharmaceutical ingredients to create a uniquely formulated product for the potential treatment of Sleep Apnoea. And, a portion of the Dronabinol will remain unaltered and retained for immediate sale under the Special Access Scheme for Dronabinol's traditional indications, being loss of appetite in people with HIV/AIDS and nausea and vomiting caused by chemotherapy.
Following the completion of a successful clinical trial, IHL can assess the potential for further trials and apply for special access scheme ('SAS') sales authorisation for any person with severe Sleep Apnoea in accordance with the rules of the SAS, as outlined by the Therapeutic Goods Administration.
Watch this space for future weekly updates.