Hitting it Out of the Park – Cresco Labs Acquires Gloucester and Lists on Frankfurt Stock Exchange

Cresco Labs (CSE: CL) have been firing on all cylinders this week, after the company made a series of announcements, starting with the receival of regulatory approval for its acquisition of 100% of the membership interests of Gloucester Street Capital, LLC—the parent entity of Valley Agriceuticals, LLC—via a merger between Gloucester and an indirect subsidiary of Cresco Labs.

Valley Ag holds one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health. Each license gives the operator the right to operate one cultivation facility and four dispensaries in New York. Valley Ag's license was recently renewed for a two-year period. The acquisition is expected to close by the end of August.

Valley Ag's assets include four licensed dispensaries with operating locations in Bardonia and New Hartford along with new dispensaries scheduled to open in Williamsburg, Brooklyn and Huntington, Long Island within the next 14 days

The same week, Cresco announced that its Euro-denominated shares are now listed on the Frankfurt Stock Exchange and are trading under the symbol "6CQ."

The Company's shares continue to be listed on the Canadian Securities Exchange under the symbol "CL" and on the OTCQX under the symbol "CRLBF."

"We are pleased to further expand access to Cresco Labs shares with our listing on the Frankfurt Stock Exchange."

– Cresco Labs CEO & Co-Founder Charlie Bachtell.

The company also provided comments on the signing into law of legislation that makes Illinois' medical-use cannabis program permanent, expands the list of qualifying medical conditions, and allows for nurse practitioners and physician's assistants to certify a patient's eligibility for the program in addition to doctors.

The new law signed by Illinois Governor JB Pritzker on August 12, 2019 takes effect immediately and adds debilitating illnesses such as chronic pain, migraines and irritable bowl syndrome to the list of qualifying medical conditions.

Cresco CEO Charlie Bachtell discusses branding, distribution and the company's recent acquisition of Origin House.

 

 

Ignite International Brands (UK)—a wholly owned subsidiary of Ignite International Brands Ltd (CSE:BILZ)—announced that WHSmith has submitted a purchase order and will begin to offer, under exclusive contract, Ignite's leading CBD products at 276 retail travel stores in the United Kingdom starting August 2019.

Under the agreement, WHSmith will launch with the Ignite ONE device, a rechargeable vape pen compatible with Ignite CBD pods and Ignite branded tinctures.  Both WHSmith and Ignite will coordinate future product introductions, including additional vape and health and beauty applications, in concert with Ignite's product roadmap.

Retail sites featuring the Ignite products include Heathrow Terminals 2 through 5, Gatwick North and South, Birmingham Airport, Liverpool Airport, London City Airport, Manchester Airport (Terminal 1), and Kings Cross Station. These sites offer exposure to a total of approximately 192 million travel passengers per year.

"We are excited to be partnering with WHSmith to give Ignite a strong retail presence throughout the United Kingdom."

– President of Ignite International Brands, Jim McCormick

 

 

Harvest Health & Recreation Inc (CSE: HARV) reported the company's second quarter fiscal year 2019 financial results. Harvest has continued to be successful in winning licenses in non-competitive and competitive application processes throughout the country and has announced several significant strategic acquisitions and mergers.

Harvest's ability to combine size, scale, capital, regulatory expertise and operational excellence are paramount to its success. Total revenue was $26.6 million, an increase of 39%, compared to $19.2 million in the first quarter of

On a pro forma basis, Harvest along with completed and pending disclosed acquisitions, generated $78 million of revenue in the second quarter, or over $310 million annualized. Second quarter pro forma revenue increased 53% over first quarter pro forma revenue of $51 million.

"During the second quarter, Harvest continued to execute on its strategy by adhering to our four core initiatives: building a world class team, expanding our retail and wholesale footprint across the U.S., building and acquiring brands and distributing them across our footprint and continuing on a path of profitable growth we believe that we can fulfil our objective of becoming the most valuable cannabis company in the world."

– Harvest Health & Recreation CEO, Steve White

The company also announced the opening of its second North Dakota compassion centre, Harvest of Bismarck, for qualifying patients and caregivers. The first location, Harvest of Williston, opened last month.

Harvest of Bismarck is located at 1207 North Memorial Highway and is open from 10:00am to 8:00pm Monday through Saturday and will be closed on Sunday.

It will operate under North Dakota Century Code and offer products direct from registered North Dakota manufacturing facilities under the Medical Marijuana Program.

Harvest Health and Recreation CEO Steve White discusses 2018 revenue and plans for 2019.

 

 

Bhang Inc (CSE: BHNG), announced that it has signed an agreement to import and distribute Bhang's full suite of hemp-derived cannabidiol (CBD) products in key markets across Europe, with distribution into Spain, France, Italy, Belgium, Luxembourg and the U.K.

The 3-year agreement was struck with Barcelona-based CHK Solutions, a leading distributor of premier hemp and CBD products who will distribute Bhang CBD products into Spain, France, Italy, Belgium and Luxembourg. Bhang is also supplying its award-winning CBD products to Winchester MD, a UK-based online provider of CBD products. The value of the agreement will depend upon the distributor orders received.

In addition, Bhang is evaluating distribution opportunities in Asia where Prohibition Partners estimates the medicinal and recreational cannabis markets could be worth over $8.5 billion by 2024.

"The Bhang brand continues to draw attention from cannabis markets around the world.  As the European Union opens its doors to cannabis and hemp-derived CBD products and demand for award-winning cannabis products increases, there is a significant opportunity for Bhang to further establish its presence in the global cannabis landscape."

– Bhang Chairman & CEO, Scott Van Rixel

 

 

Tilray Inc (Nasdaq: TLRY) reported financial results for the second quarter ended June 30, 2019. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated.

Revenue increased 371.1% to $45.9(C$60.9) million, compared to the second quarter of last year, driven by the Manitoba Harvest acquisition, the legalization of the Canadian adult-use market, and growth in international medical markets, particularly in Europe. Excluding excise tax, revenue was $42.0(C$55.8) million.

Total kilogram equivalents sold more than tripled to 5,588 kilograms from 1,514 kilograms in the prior year period. Average net selling price per gram decreased to $4.61(C$6.12) compared to $6.38(C$8.36) in the prior year period.

The average net selling price excluding excise taxes was $3.92(C$5.20) per gram for the second quarter of 2019. The decrease was due to a reduced mix of higher priced extract products and a greater mix of adult-use revenue, which are at lower prices per gram compared to other channels.

Tilray CEO Brendan Kennedy discusses the company's recent earnings report.

 

 

Spectrum Therapeutics—the medical division of Canopy Growth Corporation (TSX: WEED)—announced that it has entered into a five-year service agreement with Canada's largest specialty pharmacy that services residents in long-term care, retirement homes and other settings, Medical Pharmacies Group Limited.

Under the agreement, Spectrum Therapeutics will be the preferred medical cannabis education partner to Medical Pharmacies and the seniors it serves in over 500 residences and care facilities.

The agreement will also see Apollo Cannabis Clinics support patient access and provide ongoing comprehensive medical support to all pharmacists, nursing staff and medical directors in order to ensure utilization of medical cannabis that maximizes safety and efficacy. Apollo is a leading evidence-based cannabis clinic with physical locations in Toronto and virtual access to its clinical team available country-wide.

"However with the knowledge and support of trained pharmacists along with Apollo Cannabis Clinics and our full-spectrum range of medical cannabis which includes Softgels, a consistent dosing format of ingestible medical cannabis, we're ensuring the highest degree of standardization and quality control of medical cannabis is available to this patient population."

– Chief Medical Officer of Canopy Growth, Dr Mark Ware

 

 

MedMen Enterprises Inc (CSE: MMEN) announced unaudited systemwide revenue figures for the fiscal fourth quarter 2019, which ended on June 29, 2019. The company also provided an update on several corporate initiatives, including efforts to optimize SG&A and raise capital, the status of the pending PharmaCann transaction and retail store expansion.

The company plans to announce financial results for Fiscal 2019 after market close on October 28, 2019. For the fiscal fourth quarter 2019, systemwide revenue across MedMen's operations in California, Nevada, New York, Arizona and Illinois, excluding pending acquisitions, totaled US$42.0 million (CA$55.5 million), up 15% sequentially.

This growth represents the company's third consecutive double-digit sequential revenue increase since going public in May 2018. For the fourth quarter, gross margins across retail operations were 50%, compared to 51% in the previous quarter. Pro forma systemwide revenue, which includes pending acquisitions that have not yet closed, totalled US$61.3 million (CA$81.0 million) for the quarter.

MedMen CEO Adam Bierman discusses the company's acquisition of PharmaCann.

 

 

MediPharm Labs Corp (TSX: LABS) announced its financial results for the three and six months ended June 30, 2019, including strong growth in revenue, EBITDA, net income and earnings per share.

Revenue was $31.5 million, a 43% increase over Q1 2019, reflecting the company's leadership of the Canadian cannabis extraction-only industry and ramp up of new committed contracts. Gross profit was $11.3 million, a 65% increase over Q1 2019, while gross margin was 36% compared to 31% in Q1 2019, reflecting increased production and production efficiency that continues to improve as the company realizes economies of scale

Adjusted EBITDA was $7.7 million, 79% higher than Q1 2019, while Adjusted EBITDA margin was 24% compared to 20% in Q1 2019. Net income before tax was $4.1 million compared to a net loss of $0.3 million in Q1 2019.

"The significant momentum we've gained through important new customer and procurement relationships, and the successful ramp up of our Canadian and Australian facilities will drive growth and value for the remainder of this year and well beyond."

– MediPharm Labs CEO, Patrick McCutcheon

 

 

The Supreme Cannabis Company (TSX: FIRE) announced its expected revenue for the fiscal fourth quarter ended June 30, 2019 and provided guidance for fiscal 2020. Supreme Cannabis' expects to release the Company's audited fourth quarter and annual results on September 17, 2019.

The company anticipates that revenue from the fourth quarter will be approximately $19 million net of excise tax. Based on preliminary results, fourth quarter 2019 revenue is expected to mark an increase of approximately 449% over Q4 2018 revenue ($3.55 million) and is expected to be an approximately 97% increase over Q3 2019 revenue ($9.9 million), thereby expecting to nearly double revenue quarter over quarter.

Supreme Cannabis expects continued revenue growth throughout 2020 as 7ACRES scales production, new and higher-margin products are introduced, and additional brands begin generating material revenue. As a capital-efficient operator, Supreme Cannabis also anticipates reporting positive Adjusted EBITDA on a consolidated basis for fourth quarter 2019.

"Our Company has taken deliberate steps to grow in a focused, responsible and compliant manner, building a strong core business and an authentic brand and then expanding into new lines of business and international markets."

– Supreme Cannabis CEO, Navdeep Dhaliwal

 

 

Finally, Canopy Rivers Inc (TSXV: RIV) announced that it has received conditional approval from the Toronto Stock Exchange to graduate from the TSX Venture Exchange and list its class A subordinated voting shares on the TSX.

Final approval of the listing is subject to Canopy Rivers meeting certain standard and customary conditions required by the TSX.

Upon receipt of final TSX approval, Canopy Rivers' Subordinated Voting Shares will be voluntarily delisted from the TSXV and commence trading on the TSX under the ticker symbol "RIV".

Canopy Rivers President Narbe Alexandrian discusses the company's recent agreement with LeafLink Inc.

 

 

Watch this space for future 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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