THC Global Limited (ASX:THC) announced game changing news this week, after the company revealed that it has been granted the "most significant cannabis Manufacture license in Australia" for its Gold Coast-based Southport Manufacturing Facility.
This is a huge development, as the site—which houses the largest bio-pharma extraction facility in the Southern Hemisphere—is now capable of producing more than 12,000 kg of Good Manufacturing Practices (GMP) compliant Active Pharmaceutical Ingredient (API) isolate per year. THC Global is now positioned to undergo significant growth, as these isolates— or equivalent quantities of full and broad spectrum extracts the company also produces—are experiencing extremely high global demand.
This is because the majority of suppliers are currently inadequately equipped to meet the rigorous requirements of GMP standards. Compounding this is the fact that the Extract Market is expected to experience exponential growth in the near future, as regulatory and legislative changes improve both cannabis accessibility and product quality standards.
These factors mean that THC Global are in a strong position to become an industry-leader in both the Asia Pacific region and the broader global cannabis export market.
The Supreme Cannabis Company (TSX: FIRE) and Blissco Cannabis Corp. (CSE: BLIS) (OTCQB: HSTRF) announced that the Supreme Court of British Columbia has issued a final order approving the previously announced plan of arrangement the companies.
Subject to the terms of an arrangement agreement between Supreme Cannabis and Blissco dated May 16, 2019, Supreme Cannabis will acquire all of the issued and outstanding common shares of Blissco not already owned by Supreme Cannabis. Having received the Final Order, Supreme Cannabis and Blissco intend to close the Arrangement on July 12, 2019.
As announced on May 16, 2019, under the terms of the Arrangement Agreement, each Blissco Shareholder will receive 0.24 of a common share of Supreme Cannabis for each Blissco common share held, as further described in Blissco's management information circular (the "Circular"), which is available under Blissco's profile on SEDAR.
"With the closing of this acquisition, Supreme Cannabis will expand its portfolio to include a consumer focused brand that specializes in products for the premium global wellness category."
– Navdeep Dhaliwal, CEO of Supreme Cannabis.
Bhang Corporation, a cannabis house of brands with an extensive, award-winning portfolio of products, has announced that, further to its news release on July 9, 2019, that it will begin trading on the Canadian Securities Exchange (CSE) as Bhang Inc under the stock symbol "BHNG" on July 11, 2019.
Founded in 2010, Bhang has continued to build on its award-winning edibles product line and today has an expansive portfolio of over 100 cannabis, hemp-derived cannabidiol (CBD) and terpene products (which are sold through its licensees and/or by Bhang directly). International distribution and expansion to more geographies is anticipated in 2019.
Bhang also has a robust pipeline of new products ready to be launched in the next 12 months as it builds a powerful "House of Brands."
CannTrust Holdings Inc (TSX: TRST) announced an update on its outdoor cultivation operation in British Columbia and its first shipment of capsule and dry flower products to Australia.
After closing the purchase of its first 81 acres of land in British Columbia for outdoor cannabis cultivation, CannTrust immediately invested in fencing, security, irrigation and other land preparation activities and applied for Health Canada approval to plant and cultivate on the land.
Based on its estimate of yields and projected date of permitting at the time, CannTrust predicts that 75,000 kg of cannabis could be produced from this property in 2019. A crop of up to 15,000 kg is expected if planting is completed in the first half of July 2019 and yields will diminish if a crop is planted in the second half of the month. If a crop is not planted by August 5, 2019, there will be no outdoor harvest in 2019.
Last week, CannTrust also completed its first shipment of CBD, THC and 1:1 CBD THC vegan capsules and dry flower products to Australia. These products will be resold by its partner Cannatrek Ltd to medical patients in Australia. These shipments are expected to continue until Cannatrek's operations achieve commercial production. CannTrust now has nine products available to medical patients in Australia.
"The first steps to build CannTrust's global footprint were established last year through partnerships in Europe and Australia. We continue to make excellent progress with our partners in these regions as they build their operations and through our regular shipments of our award-winning products to both Denmark and Australia.
– CannTrust CEO, Peter Aceto
Innovative Industrial Properties, Inc (NYSE: IIPR), announced that it has commenced a public offering of 1,250,000 shares of its common stock. The company expects to grant the underwriters a 30-day option to purchase up to an additional 187,500 shares of its common stock. All of the shares are being sold by the company.
Innovative Industrial Properties intends to use the net proceeds from this offering to invest in specialized industrial real estate assets that support the regulated cannabis cultivation and processing industry that are consistent with its investment strategy, and for general corporate purposes.
BTIG, LLC, Compass Point Research & Trading, LLC and Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS), are acting as joint book-running managers for the offering.
IIP also announced this week that it closed on the acquisition of a property in Lansing, Michigan, which comprises approximately 145,000 square feet of industrial space.
"We are excited to team up with AWH again as their long-term real estate partner in Michigan. AWH is very well-positioned, with a strong management team and balance sheet, as it ramps up its operations in Massachusetts, Illinois, Michigan and Ohio, each of which presents a tremendous market opportunity."
– President and CEO of IIP, Paul Smithers
The purchase price for the Michigan property was approximately $4.8 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with a subsidiary of Ascend Wellness Holdings, LLC (AWH), which intends to operate the property as a licensed medical-use cannabis cultivation and processing facility upon completion of redevelopment.
AWH is expected to complete tenant improvements for the building, for which IIP has agreed to provide reimbursement of up to $15.0 million. Assuming full reimbursement for the tenant improvements, IIP's total investment in the property will be approximately $19.8 million.
This Michigan property represents IIP's second real estate transaction with AWH. In December 2018, IIP acquired a 75,000-square-foot industrial facility in Illinois and entered into a long-term, triple-net lease agreement with AWH for use as a medical cannabis cultivation and processing facility, with IIP's total investment in the property, assuming full reimbursement for tenant improvements, expected to be $25.0 million.
MGC Pharmaceuticals Ltd (ASX: MXC)—a European based 'Seed to Pharmacy' bio-pharma company focused on developing and commercialising cannabinoid derived medicines—announced its Appendix 4C cashflow report for the three months ended 30 June 2019, and an overview of its operational highlights for the period.
The company saw a substantial increase in sales and revenues delivered in the June quarter, as the commercialisation strategy advanced on the Company's Seed-to-Pharmacy strategy.
MGC's operations are now fully focused on its core EU pharma divisions of Research & Development, Manufacturing and Distribution. The company saw increasing commercial activity in the quarter resulting in delivery of additional revenues, with $763k received during the quarter.
Pharma distribution agreements were also signed with five new partners providing access to major new patient markets globally: United Kingdom, Germany, Austria, Switzerland, Brazil and Australia.
"We only see this as the beginning for the Company delivering on our core business expertise, and shareholders should look forward to similarly productive September and December quarters as we continue to work to advance our company into becoming a leading international cannabinoid focused pharmaceutical business."
– Co-Founder and Managing Director of MGC Pharmaceuticals, Roby Zomer
KushCo Holdings, Inc (OTCQX: KSHB) also reported financial results for its third fiscal quarter ended May 31, 2019.
Net revenue increased 221% year-over-year to $41.5 million, compared to the same quarter a year ago and 17.9% on a sequential basis versus the second fiscal quarter of 2019. On a GAAP basis, gross profit increased to 17.8%, compared to 12.9% during the second fiscal quarter of 2019.
On a Non-GAAP basis, excluding the impact of certain non-recurring items, gross profit was approximately 22.8%. Net losses were approximately $10.6 million on a GAAP basis., compared to a net loss of approximately $9.2 million during the third quarter of fiscal 2018.
Loss per share improved from negative $0.14 during the third quarter of fiscal 2018 to negative $0.12 during the third quarter of fiscal 2019.
The company also announced it has filed an application to list KushCo's common shares on the NASDAQ Global Select Market ("NASDAQ").
Nick Kovacevich, Chairman and Chief Executive Officer of KushCo, commented, "Listing on the NASDAQ Global Select Market, the highest and most prestigious NASDAQ tier, will raise the company's profile by diversifying our shareholder base and enhancing share liquidity in support of our company's long-term goals and objectives."
The listing of the company's common shares on the NASDAQ remains subject to the approval of the NASDAQ and the satisfaction of all applicable listing and regulatory requirements. In the interim, the company will continue to trade on the OTC Markets under the current symbol "KSHB."
CV Sciences, Inc (OTCQB:CVSI)—a preeminent supplier and manufacturer of hemp cannabidiol (CBD) products through its industry-dominating brand, PlusCBD™ Oil—announced the commencement of its domestic hemp sourcing initiative, including a commitment to more than 500 acres of U.S.-based hemp production for 2019.
The company has completed supply agreements with hemp farmers in Wisconsin, Illinois, Indiana and Kentucky to meet growing retailer and consumer demand for PlusCBD™ Oil products, as well as increased interest in U.S. grown hemp CBD following the passage of the 2018 Farm Bill.
This new supply of domestically produced hemp-based CBD will be extracted in the U.S. through CV Sciences' supply chain partners and refined at the company's San Diego production facilities, broadening the company's global supply chain and raw material supply while reducing transportation and logistics costs.
"We believe establishing and building the U.S. hemp industry will ensure a global supply chain of the highest quality hemp, while also driving job creation and economic development for rural communities – a primary goal of the 2018 Farm Bill."
– CEO of CV Sciences, Joseph Dowling
MedMen Enterprises Inc (CSE:MMEN) announced that it has signed a binding term sheet in respect of certain amendments to the definitive agreements for up to US$250,000,000 senior secured convertible credit facility led by Gotham Green Partners, an investor in the global cannabis industry.
Concurrent to the amendments, Gotham Green Partners, with participation from Wicklow Capital, has agreed to an additional US$30,000,000 equity commitment, bringing the total financing commitment to US$280,000,000. To date, Gotham Green Partners has funded US$100,000,000 of the total commitment.
In addition, Gotham Green Partners and Wicklow Capital have committed to a US$30,000,000 non-brokered financing of Subordinate Voting Shares at a price equal to US$2.37 per share. The Equity Placement is conditional upon the satisfaction of customary conditions, including but not limited to the receipt of all necessary approvals.
"MedMen's strategy, brand and performance makes them the clear leader of cannabis retail in the U.S. and we are supportive of management's vision and plan for growth and profitability."
– Managing Member of Gotham Green Partners, Jason Adler
Harvest One Cannabis Inc (TSXV: HVT) and Delivra Corp (TSXV: DVA) announced that they have completed the previously announced plan of arrangement under the provisions of the Business Corporations Act (Ontario), pursuant to which Harvest One acquired all of the issued and outstanding common shares of Delivra.
Pursuant to the terms of the arrangement, each former shareholder of Delivra received 0.595 of a common share of Harvest One for each Delivra Share held prior to the deal. All outstanding options and warrants of Delivra have similarly been exchanged, or have become exercisable, for corresponding securities of Harvest One based on the same exchange ratio.
As a result of the completion of the arrangement, Delivra has become a wholly-owned subsidiary of Harvest One. It is anticipated that the Delivra Shares will be delisted from the TSX Venture Exchange as of the close of trading on or about July 4, 2019.
Finally, Sundial Growers Inc announced that it has filed a Registration Statement with the U.S. Securities and Exchange Commission ("SEC") and a preliminary prospectus in Canada with the securities regulatory authorities in each province of Canada other than the Province of Quebec for a proposed initial public offering of its common shares.
The number of shares to be offered and the price range for the offering have not yet been determined. In connection with the proposed offering, Sundial has applied to list its common shares on the Nasdaq Global Select Market ("Nasdaq") using the ticker symbol "SNDL". Listing on Nasdaq is subject to the company satisfying applicable regulatory requirements, including fulfilling all Nasdaq listing requirements.
Cowen and BMO Capital Markets will serve as joint book-running managers for the proposed offering. Barclays is also serving as a bookrunner for the proposed offering. The offering will be made only by means of a U.S. prospectus and a Canadian prospectus. A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.
The company also announced the acquisition of UK-based Bridge Farm Group this week, as part of its plans to produce and sell high-quality CBD products globally.
Bridge Farm is a market-leading producer of ornamental plants, flowers and herbs in the United Kingdom. It currently operates three growing facilities with 1.5 million square feet and plans to expand to 3.5 million square feet by the end of 2021.
Using a phased approach, and subject to necessary regulatory approvals, Sundial intends to use parts of these facilities to cultivate hemp and cannabis.
The Bridge Farm acquisition will establish Sundial's presence in Europe and represents an important milestone for its international expansion.
"This is a significant acquisition for Sundial, taking us one step closer to our goal of being one of the leading cannabis companies in the world. We recognize that expedient global expansion requires a combination of organic growth and strategic acquisitions. Bridge Farm's experienced management team, strong market position and operational excellence made it an ideal acquisition."
– Sundial Growers CEO, Torsten Kuenzlen
Watch this space for future updates.
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