Match Point – KushCo Secures $50m Credit Facility and Strengthens Advisory Board

KushCo closed a $50 Million credit facility and appointed a new member to its advisory board. Tilray entered into an agreement with Cannamedical, and Curaleaf acquired Glendale Greenhouse.


KushCo Holdings Inc (OTCQX:KSHB) gained huge ground this week, after the company revealed that it has closed on a $50 million credit facility with Monroe Capital LLC, consisting of a $35 million revolving line of credit and an accordion of up to $15 million that will be available subject to covenant compliance and borrowing base availability.

The Facility will be for a term of five years and will be used for working capital and driving organic growth, as well as for potential acquisitions. Monroe Capital is a private credit asset management firm specializing in direct lending and opportunistic private credit investing.

"KushCo continues to execute on its less dilutive financing strategy that will provide the capital necessary to support our continued operations and acquisitive growth."

– KushCo Holdings CEO, Nick Kovacevich

The company also announced that it has added Pete Kadens, the former CEO of Green Thumb Industries, one of the largest publicly-traded cannabis operators in the United States, to its Advisory Board. Mr. Kadens will provide guidance and mentorship on the Company's strategic vision with corporate development and M&A activities to accelerate and maintain long-term profitable growth.

Pete Kadens holds 17 years of experience in various CEO, Board of Director and leadership roles. In August 2018, he retired from his position as CEO and Board Director of Green Thumb Industries, and has been focusing his efforts on philanthropic initiatives—specifically The Kadens Family Foundation—a charitable organization dedicated to closing the pervasive wealth and education gaps in the United States.

Additionally, Kadens is one of 25 current and previous cannabis industry executives currently serving on the board of directors of the Cannabis Trade Federation, an organization focused exclusively on federal cannabis policy reform.

KushCo CEO Nick Kovacevich discusses the company's expansion and banking.



Charlotte's Web Holdings (TSX:CWEB) reported financial results for the second quarter ended June 30, 2019. All amounts are expressed in United States dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures. Retail uptake in the natural health channel increased during the second quarter, along with a marked entry of large national brand chains within the food, drug and mass (FDM) retail segment.

Five leading national retailers such as CVS and Kroger are selling Charlotte's Web products, adding significantly to the Company's brick and mortar presence in the United States. To support the growing product portfolio and projected retailer demand, Charlotte's Web increased the total acres planted for 2019 to 862, an 187% increase from 300 acres planted in 2018. The hemp harvested from 300 acres in 2018 totalled 675,000 pounds.

During the quarter, Charlotte's Web introduced new products including new hemp extract infused CBD gummies in three flavours, and a new twelve SKU pet product line including functionally focused chews with synergistic ingredients to support specific health functions – Calming, Hips & Joints and Cognition.

"We are experiencing increased momentum with large retailers as consumer awareness and interest in CBD grows."

– CEO of Charlotte's Web, Deanie Elsner



Tilray Inc (NASDAQ:TLRY) announced it has entered into an agreement with Cannamedical Pharma GmbH through its wholly-owned subsidiary Tilray Portugal, to export a wholesale shipment of €3 million worth of medical cannabis from Portugal to Germany.

The shipment, which is expected to be completed in fall 2019, will be Tilray's first from its state-of-the-art EU campus in Portugal to supply patients in Germany. Founded in 2016 in Cologne, Germany, Cannamedical is fully licensed and GDP-certified (Good Distribution Practice) to import and distribute high quality medical cannabis products.

The privately-owned company is a leading independent supplier of medical cannabis products to 2,500 pharmacies and clinical facilities across Germany.

The CEO of Tilray, Brendan Kennedy, discusses the company's plans to export its first batch of medical cannabis from Portugal to Germany.



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 for the quarter 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 reached $11.3 million, representing 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

The company's annual dried cannabis processing capacity in Canada increased to 300,000 KG during this period, and with a new customized, large-scale extraction line set to open later this year at the Company's Barrie, Ontario headquarters, annual capacity is expected to reach over 500,000 KG.

"MediPharm Labs made tremendous progress in the second quarter with growth in all key value drivers."

– CEO of MediPharm Labs, Patrick McCutcheon



Curaleaf Holdings (CSE: CURA) announced that it completed the acquisition of Glendale Greenhouse, a vertically integrated cannabis business in Arizona. The signing was announced earlier on June 27, 2019, with the dispensary to be rebranded as Curaleaf.

Glendale Greenhouse operates a 20,000 square-foot, multi-level cultivation center capable of producing 3,600 pounds of flower annually. Its 1,500 square-foot dispensary, located directly off the Agua Fria Freeway with 90,000 cars passing daily, can be expanded to nearly 5,000 square-feet. The facility also operates a state-of-the-art CO2 extraction lab and a kitchen, which is already producing various edible lines such as mints, gummies, brownies and ice cream, with additional products expected to launch later this year.

Curaleaf has successfully completed three acquisitions in Arizona this year, increasing its operational footprint to 8 locations. With the largest footprint of single-branded retail stores in the U.S., Curaleaf continues to execute on its strategy of building a national brand in highly populated states. Earlier this year, the Company completed its acquisition of Eureka in California and continues to make considerable progress towards completion of the previously announced acquisitions of Acres in Nevada and OGT in Ohio, as well as Select and Grassroots.

Curaleaf CEO Joseph Lusardi discusses the company's multi-state operations.



The Green Organic Dutchman Holdings (TSX: TGOD) reported its financial and operational results for the three and six months ended June 30, 2019.

The company is nearing completion of construction at its Hamilton site and Phase 1 at its Valleyfield site, with investment amounting to $53.1 million in the second quarter of 2019, bringing the total additions year to date to $100.9 million. TGOD also achieved revenues of $2.9 million, a 20% increase over the prior quarter derived primarily from Europe.

In Canada, the company launched its pilot "Grower's Circle", which included sales to a small number of medical patients to test the market and the Company's distribution capabilities. The company launched two new products in Q2 and expects to start a similar pilot in the Ontario recreational market during Q3-2019.

"Q2 was pivotal for the Company as we began commercial production in the second phase of our Hamilton site and expanded our product line for the Grower's Circle."

– CEO of TGOD, Brian Athaide



Canopy Growth Corporation (TSE: WEED) announced that it has received a license from Health Canada for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. Including the Smiths Falls site and the recently licensed BC Tweed extraction site, Canopy Growth now operates three significant extraction assets to support the throughput required for large scale value-add product development.

Canopy Growth recently retrofitted the now fully licensed KeyLeaf facility in Saskatchewan, a company with over 50 years of experience in the extraction industry. This facility is expected to be online in the fall of 2019 and has the capacity to extract up to 5,000 kilograms of hemp or cannabis biomass per day. The application for the license was submitted under KeyLeaf's previous name, POS Management Corp. and will be updated in due course.

The newly-licensed extraction platform is located in close proximity to Canopy Growth's large-scale outdoor hemp and cannabis grow operations. The company looks forward to the additional capacity increasing production efficiency, augmenting output volume and ultimately reducing operational costs for value-add products set to be rolled out in the Canadian recreational and medical markets at the end of calendar year 2019.

Constellation Brands CEO Bill Newlands discusses the company's decision to remove Bruce Linton from his role as CEO of Canopy Growth.



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.

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



Auxly Cannabis Group (TSX.V:XLY) announced that it has entered into a hemp cultivation and purchase agreement, pursuant to which the company has agreed to act as the financial sponsor for the development of a hemp farming co-operative consisting of six individual hemp licence holders pursuant to the Cannabis Act located in Prince Edward Island.

To date, the company has funded $4.5 million of the approximately $6 million it will advance and the Hemp Farmers have planted nearly 300 acres of hemp, which is expected to result in approximately 100,000 kilograms of hemp biomass.

Pursuant to the Agreement, Auxly's wholly owned subsidiary, Dosecann Inc, is entitled to purchase all of the hemp cultivated by the Hemp Farmers in 2019 at a preferential price relative to current wholesale market rates; the funds advanced by Auxly toward the development of the project will act as pre-payment for any future hemp purchases by Dosecann. The company expects the initial hemp harvesting to commence later this fall, at which point the hemp will be tested, milled and stored pursuant to Dosecann specifications prior to delivery to Dosecann for extraction and manufacturing into final finished products.

"We are very excited to partner with experienced farmers in the province of PEI."

– President of Auxly, Hugo Alves



TerrAscend Corp (CSE: TER) announced that it has completed its first international shipment of dry cannabis flower to its German distribution partner iuvo Therapeutics GmbH.

The shipment was made from TerrAscend's EU GMP certified manufacturing facility in Mississauga, Ontario, Canada. As the company ships additional product to Germany in partnership with iuvo, it will continue to expand its footprint in Europe and other international markets. The company looks forward to providing investors with updates on such expansion activities.

It is expected that the German cannabis market will generate more than $5 billion in revenue by 2025. With more than 30,000 current medical cannabis patients in Germany and upwards of 7,200 kg in annual medical patient consumption, the TerrAscend-iuvo partnership presents an exciting opportunity to fulfil the growing needs of medical cannabis patients in Germany.

TerrAscend President and CEO Michael Nashat discusses the company's three subsidiaries.



MedMen Enterprises (CSE: MMEN) announced the launch of a state-wide delivery service in California, bringing the company's industry-leading retail experience to the consumer at home. The company will initially focus on California, where it has 17 retail locations, and expects a nationwide expansion in the near future.

MedMen will leverage its leading California retail footprint, robust supply chain and knowledgeable sales associates to offer customers shorter delivery times, excellent customer service and superior product knowledge.

The launch of MedMen Delivery follows the introduction of the company's new loyalty program, MedMen Buds. In addition to exclusive access to sales and discounts, members earn points for every purchase that lead to rewards. MedMen Buds, in just over 30 days, is currently live in 14 stores across Arizona, Florida, and California and counts over 40,000 members. Both MedMen Buds and MedMen Delivery cement the Company's commitment to continuously evolving the consumer journey.

"MedMen has always been at the forefront of shaping and defining the cannabis industry, and we are proud to be taking the next step in our evolution by now offering delivery service in California."

– MedMen Co-Founder, and CEO, Adam Bierman



Finally, PharmaCielo Ltd (TSXV:PCLO) confirmed it has successfully completed the company's first commercial export of CBD isolate to Europe.

The inaugural shipment of the high-quality CBD isolate—a key ingredient in various cannabis derived therapeutic, nutraceutical, topicals and lifestyle products—was delivered to the Swiss headquarters of Creso Pharma, a global pharmaceutical with expertise in cannabis- and hemp-derived products for human and veterinarian use.

The collaboration between PharmaCielo and Creso Pharma spans beyond the current and future supply of cannabis isolate and oil extracts. PharmaCielo recently announced a multi-country sales agreement with Uruguay-based Laboratorios Adler in which the Company will supply both PharmaCielo produced CBD isolate and Creso Pharma's veterinarian CBD complementary feed range of products to Adler for distribution in Uruguay, Paraguay, Bolivia and Southern Brazil.

"PharmaCielo's CBD isolate meets the highest purity standards in the industry, a critical element that aligns with our commitment to develop and produce the highest quality cannabis-based therapeutic and nutraceutical products for humans and animals."

– Co-Founder and Chief Executive Officer with Creso Pharma, Dr. Miri Halperin Wernli



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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