Reefer Gladness – Cronos, CWEB, and CVSI Publish Eye Catching Q1 2019 Results

It's been a watershed week for Charlotte's Web Holdings (CSE:CWEB), as the company appointed a new CEO, Adrienne "Deanie" Elsner—the former President of U.S. Snacks division at Kellogg Company—effective May 15, 2019, published financial results for Q1 2019, and announced the pricing of its underwritten public offering of an aggregate 7 million common shares.

Elsner previously served as President of Kellogg's $3B Snack Business Unit—the largest business unit in the Kellogg Global portfolio—where she transformed that business by leading the exit out of the direct store delivery distribution system, established a portfolio investment strategy and shifted to occasion-based marketing.

Prior to joining the Kellogg Company, she served more than 20 years in various leadership roles at the Kraft Foods Company including Executive Vice President and Chief Marketing Officer, where she was named by Forbes as one of the 50 Most Influential Global CMOs.

"Deanie's appointment is timely and aligns perfectly with our corporate evolution from the early stage organization we were just two years ago into a professionally managed public company with top-tier executive talent."

– President of Charlotte's Web, Hesaam Moallem.

The company's previously announced underwritten public offering of 7 million common shares will be priced at C$20.00 per share, for total gross proceeds of approximately $140 million.

All of the common shares in the offering are to be sold by certain current shareholders while underwriters will be granted a 30-day option to purchase up to an additional 15% of the common shares offered in the proposed public offering.

Charlotte's Web reported organic consolidated revenue of almost $22 million for Q1 2019, with gross margins sitting in a range of 70-75 percent. The company had an adjusted EBITDA of approximately $4.5 million, while their net income reached almost $2.5 million.

The company also expanded its canine-focused pet product line with the launch of the all-new 12 SKU line-up comprised of hemp-extract infused chews, flavoured and unflavoured oils, and a topical balm.

Charlotte's Web has said it intends to increase its market share in the rapidly growing market segment for hemp-derived CBD pet products with the launch of its new expanded pet product line.

"So many of our customers share amazing stories about the noticeable improvements in their dog's lives when incorporating our hemp-extract into their diets. We applied a thoughtful scientific approach to animal health, expanding from our single oil extract offering to twelve SKUs enhanced with additional botanicals to support your dog's mind, body and soul."

– Charlotte's Web Associate Director of Product Development, Kelsey Morrison

 

 

The Cronos Group Inc (NASDAQ: CRON) expanded its global infrastructure network and innovation capabilities with the opening of a cannabinoid device R&D facility in Israel.

Cronos Device Labs—which is equipped with an experienced team of product development talent, advanced vaporizer technology and analytical testing infrastructure— will serve as the global centre of R&D for the Company's vaporizer devices.

The facility will significantly enhance Cronos Group's technology and development capabilities, and is expected to enable the company to deliver expanded product offerings to customers that are specially tailored to cannabinoid use.

The Cronos Group also published Q1 2019 results, ending the quarter with $6.5 million in net revenue, which represents a 120 percent increase from $2.9 million in Q1 2018. This growth was primarily driven by the launch of the adult-use market in Canada, which saw a 122 percent increase in kilograms sold when compared to the previous year.

The company also experience continued growth cannabis oil sales, which represented 23% of net product revenue in first quarter 2019.

 

 

CV Sciences, Inc. (OTCQB:CVSI) also announced its financial results for Q1 2019, reporting increased retail distribution by over 1000 stores.

The company recorded $14.9 million in revenue, representing an increase of 85 percent over the same quarter in 2018, while gross margin managed to reach 70.8 percent.

CV Sciences' retail distribution also expanded to 3,308 stores as of March 31, 2019, leading the company to end the quarter with an increased cash balance of $13.6 million.

"We continued to expand retail distribution of the PlusCBD Oil™ brand and drive sales growth during the first quarter. We generated 85% revenue growth over prior year, achieving another record quarter, with strong gross margin performance. The PlusCBD Oil™ brand is now available in over 3,300 stores nationwide, including national food, drug and mass merchandiser accounts."

– Chief Executive Officer of CV Sciences, Joseph Dowling,

 

 

The Ohio-based cannabis company, Green Growth Brands Inc (CNSX: GGB), partnered with Abercrombie & Fitch Co to sell its CBD-infused bath bombs and other body-care products in a limited number of stores.

The deal will see Seventh Sense Botanical Therapy body scrubs, bath bombs, cleansing oils, lotions and lip balms sold in 10 Abercrombie & Fitch stores in Massachusetts, California, Colorado and Nevada.

The products are made with CBD derived from hemp, which was legalized with the U.S. farm bill in December and is said by its proponents to help with health issues ranging from insomnia to pain and inflammation.

 

 

CannPal Animal Therapeutics (ASX:CP1) filed a patent for a CBD-Based Canine Pain Treatment for companion animals, building on an earlier provisional patent application for the CPAT-01 formulation.

The filing will strength CannPal's portfolio of Intellectual Property (IP), and comes hot on the heels of recognition of the company's extensive research at the 2019 AVA Innovation, Research and Development Symposium in Perth.

"It was a pleasure to share some of the exciting data that CannPal is generating with the wider scientific community, which we believe can help contribute to the advancement of cannabinoid-derived therapeutic research across all species."

 – Head of research and Development at Cannpal, Dr. Margaret Curtis

 

 

Meanwhile, Tilray Inc (NASDAQ:TLRY)—a global pioneer in cannabis research, cultivation, production, and distribution—secured an investment of $32.6 million to increase the company's Canadian cannabis production and manufacturing footprint by 203,000 square feet across three facilities.

This investment will expand Tilray's total production and manufacturing footprint from 1.1 million to 1.3 million square feet worldwide.

 

 

Indiva Limited (TSXV:NDVA) released Q4 2018 results, reporting $58,307 of net revenue, versus nil in 2017 and nil in Q3 2018. This revenue was derived almost entirely from wholesale sales of cannabis flower and clones.

Operating expenses for Q4 were $2.77 million, with the increase being attributed to higher employee count and facility costs as operations and production grew, as well as higher marketing, investor relations and public company costs.

"We are delighted with the positive reception and early market share garnered by INDIVA pre-rolls in Ontario. In particular, we are very excited about the expected introduction of Indiva's derivative products, and subject to amended regulations, producing and distributing edible cannabis products in the Canadian market."

– President and CEO of Indiva, Neil Marotta.

 

 

CannTrust Holdings Inc. (TSX:TRST) announced the pricing of its previously-announced underwritten public offering of 36,363,636 common shares at a price to the public of US$5.50 per share.

In connection with the offering, CannTrust will grant underwriters a 30-day option to purchase up to an additional 4,636,363 and 818,182 common shares, respectively, at the public offering price, less the underwriting discount. The offering is currently expected to close on or about May 6, 2019.

CannTrust intends to use the net proceeds of the offering for general corporate purposes, including cultivation and facility expansion, expanded outdoor growing, international expansion, enhanced extraction capacity, upgrades for GMP Certification and biosynthesis development.

 

 

The world leader in the science, development and commercialization of cannabinoid prescription medicines, GW Pharmaceuticals (NASDAQ: GWPH) announced financial results for the first quarter ending March 31, 2019.

Revenue for the Q1 2019 was $39.2 million—compared to $3.0 million for same period last year—while net losses were $50.1 million. The company's cash and cash equivalents were sitting at $521.7 million as of 31 March 2019.

"We are pleased to report a strong launch of Epidiolex in the US and continue to be encouraged by the level of support for this medicine from patients, caregivers and healthcare professionals. As the first and only plant-derived CBD medicine approved by the FDA, Epidiolex offers a novel treatment option for patients with Lennox-Gastaut Syndrome and Dravet syndrome, two highly treatment-resistant forms of childhood-onset epilepsy"

– CEO of GW, Justin Gover.

 

 

One of California's top edible brands, Plus Products Inc (CSE: PLUS), released impressive audited financial results for Q4 2018, which showed soaring annual revenue of $8.4 million in 2018, 681% over 2017 revenues of $1.1 million.

4th quarter revenues reached a record $3.1 million, 31% higher than the 3rd quarter and 770% over the 4th quarter of 2017. Revenue growth was driven by sales of Plus Products' concentrated brand portfolio of four full-time SKUs and one rotating seasonal.

Additionally, the company continued to increase its production capacity, which allowed its distributor to build up inventory to better service over 300 dispensary customers throughout California.

 

 

Alcanna Inc (TSX: CLIQ) today announced that it has entered into a new senior secured $70 million asset-based revolving credit facility with Canadian Imperial Bank of Commerce acting as the sole lender.

The facility will have a term of three years, and also includes. At the time of closing, there were no draws on either the new Credit Facility or the prior credit agreement.

"This new credit facility was designed to fit our company's needs as we execute on transforming Alcanna to a growth company. Using an asset-based loan structure provides maximum flexibility to invest in both capital and margin initiatives targeted at strengthening the business on many fronts,"

– James Burns, Vice Chair and CEO of Alcanna.

 

 

GrowGeneration Corp. (OTCQX: GRWG), one of the largest chains of specialty hydroponic and organic garden centres, reported financial results for Q3, 2019.

The company recorded an adjusted EBITDA of $615,509, and net income of $229,421. The company secured $13.1 million in revenue during the quarter—up $8.7 million or 199% over Q1 2018—while gross profit margins reached 28.2 percent.

As of March 31, 2019, the Company has working capital of $17.4 million, compared to working capital of $21.6 million at December 31, 2018.

 


Creso Pharma Limited
(ASX:CPH) managed to lock down an exclusive Distribution Agreement with Burleigh Heads Cannabis—one of Australia's foremost medicinal cannabis distribution companies—to geographically expand the distribution of its innovative therapeutic medicinal cannabis products into the Australian market.

Creso and Burleigh Heads Cannabis have received the necessary regulatory acceptance for the first shipment of Creso's flag-ship medicinal cannabis product, cannaQIX® 50, to be imported in Q3 2019 as a therapeutic product for sale via approved channels.

The two companies have also agreed to explore the introduction of additional therapeutic/medicinal products from Creso's pipeline of new products to be produced at its production facilities globally.

 

 

Zelda Therapeutics Ltd (ASX:ZLD) will use the $769,000 cash refund it received under the Federal Government's R&D Tax Incentive Scheme to accelerate current clinical trials as well as a pre-clinical program.

The R&D Tax Incentive Scheme is an Australian Government program where companies receive cash refunds of 43.5% if eligible expenditure is on research and development.

In March 2019 Zelda was awarded a patent to detect breast cancer, which details a method for detecting levels of expression of a novel receptor complex containing HER2 and CB2.

 

 

Canopy Growth Corporation (TSX: WEED) signed an offtake agreement with PharmHouse Inc, which will see PharmHouse allocate high quality cannabis flower to the company from an additional 20 per cent of the flowering space available at its Leamington greenhouse facility over the next three years.

PharmHouse will leverage Canopy Growth's genetics—selected and supplied by the Company—and the flower generated will be returned to the company and sold under Canopy Growth's diverse brands and banners.

Under the terms of the new offtake agreement, PharmHouse is committed to producing GMP-certified, high quality cannabis flower within 18 months of its cultivation license and the flower must comply with the Canopy Growth's high standards for cannabis quality.

"We have witnessed Canopy Rivers and its joint venture partner pour their hard work into the PharmHouse facility in Leamington and couldn't be more satisfied with how it has turned out."

– Chairman & Co-CEO of Canopy Growth Corporation, Bruce Linton.

 

 

Khiron Life Sciences Corp (TSXV: KHRN) announced that it had entered into an agreement with Cannaccord Genuity Corp and BMO Capital Markets—on behalf of a syndicate of underwriters—to purchase, 8,621,000 common shares on a "bought deal" basis.

The agreement will be pursuant to a short form prospectus offering, subject to all required regulatory approvals, and set at a price per Common Share of $2.90 for gross proceeds of $25,000,900.

The company intends to use the net proceeds of the offering to expand its operating capacity and for working capital requirements and other general corporate purposes.

 

 

Ignite International Brands, Ltd (CNSX: BILZ)the global super-premium cannabis and CBD investment company owned by Dan Bilzerian—signed a definitive agreement with Taylor Mammon & Nathan Limited for the manufacture and distribution of CBD products in the United Kingdom.

Under the agreements, Taylor Mammon will, manufacture, package and distribute a wide array of premium Ignite branded CBD products to select wholesale and retail channels.

The deal also includes an option for the company to expand into other strategic European markets, while Taylor Mammon will serve as Ignite's fulfilment partner for the launch of its rest-of-world e-commerce platform in Q3 2019.

"We look forward to the power of this partnership to drive CBD market leadership in this emerging UK hyper-growth category."

– Eddie Mattei, Chief Financial Officer of Ignite International Brands, Ltd.

 

 

Securities owned by MMJ Group Holdings Ltd (ASX:MMJ) (OTCMKTS:MMJJF) gained 5.25% on highlighting it's $25 million in carrying cash and plans to close the gap between its asset value and market capitalisation with a performance driven-approach investors hope will help build portfolio and shareholder value.

The company has also started a campaign to present its investment case to shareholders, with CFO Jim Hallam detailing the company's investments in a finance interview earlier this week.

MMJ shared a summary of Hallam's comments with the market yesterday in an investment update, after the CFO profiled both the company's investments and upcoming investment management approach in the interview on Monday.

 

 

Watch this space for future weekly updates.

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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