Monthly Archives: February 2020

CannTrust Provides Default Status Report

CannTrust Provides Default Status Report

CannTrust Holdings Inc. (“CannTrust” or the “Company”, TSX: TRST, NYSE: CTST) today provided a status update in accordance with its obligations under the alternative information guidelines set out in National Policy 12-203 – Management Cease Trade Orders (“NP 12-203”), which require the Company to provide bi-weekly updates until such time as the Company is current with its filing obligations under Canadian securities laws. As previously announced, the Company is subject to a management cease trade order (“MCTO”) issued by the Ontario Securities Commission. The MCTO prohibits the directors and executive officers of the Company from trading in or acquiring securities of the Company until two full business days after the Company files an interim financial report for the three and six month periods ended June 30, 2019, an interim management’s discussion and analysis for the corresponding period and certifications of interim filings. The MCTO does not affect the ability of investors who are not insiders to trade in the Company’s securities.

CannTrust Holdings Inc. (CNW Group/CannTrust Holdings Inc.)

CannTrust remains in default of its disclosure obligations under securities legislation, has no meaningful revenues, has terminated or laid-off a significant portion of its workforce, is facing a variety of regulatory investigations, and has significant contingent liabilities in both Canada and the United States, including for potential civil damages and potential criminal, quasi-criminal or administrative penalties and fines, which cannot be reasonably quantified.

As of January 31, 2020, CannTrust had a cash balance of approximately $167 million. CannTrust and its Board of Directors continue to monitor the Company’s cash balance and other factors carefully to, among other things, assess various strategic alternatives while pursuing the Company’s remediation work. CannTrust reiterated that the nature, timing, and outcome of the Board of Directors’ ongoing strategic review process will be influenced by, among other things, the Company’s ability to extend or renew insurance coverage on acceptable terms, whether or when Health Canada reinstates the Company’s licenses, how long it will take to restore operations and expectations regarding the resolution of the Company’s contingent liabilities, and potential civil, criminal, quasi-criminal, administrative and regulatory actions in both Canada and the United States.

CannTrust further noted that:

(i) 

Other than as disclosed above, there have been no material changes to the information contained in the Company’s August 16, 2019 news release, August 29, 2019 news release, September 12, 2019 news release, September 26, 2019 news release, October 10, 2019 news release, October 24, 2019 news release, November 7, 2019 news release, November 21, 2019 news release, December 5, 2019 news release, December 19, 2019 news release, January 2, 2020 news release, January 16, 2020 news release, January 30, 2020 news release, and February 13, 2020 news release;

(ii) 

The Company intends to continue to comply with the alternative information guidelines of NP 12-203; and,

(iii) 

Except as previously disclosed, there are no subsequent specified defaults (actual or anticipated) within the meaning of NP 12-203.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of Canadian Securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbor laws, and such statements are based upon CannTrust’s current internal expectations, estimates, projections, assumptions and beliefs and views of future events. Forward-looking information and forward-looking statements can be identified by the use of forward-looking terminology such as “believes”, “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or statements that certain events or conditions “may”, “would” or “will” happen, or by discussions of strategy.

The forward-looking information and statements in this news release include statements relating to the corrective actions being taken by the Company, and Health Canada’s pending determinations. Forward-looking information and statements necessarily involve known and unknown risks, including, without limitation: actions taken in respect of the Company’s products by its customers and regulators; results of Health Canada’s investigation, including orders and compliance measures required by Health Canada and their impact on the operations, inventory, assets and financial condition of the Company; the Company’s implementation of remediation plans and related actions; regulatory approval; the outcome of the Company’s contingent liabilities; the impact of potential regulatory investigations; the Company’s review of strategic alternatives; risks associated with general economic conditions; adverse industry events; loss of markets; future legislative and regulatory developments in Canada, the United States and elsewhere; the cannabis industry in Canada generally; and, the ability of CannTrust to implement its business strategies.

Any forward-looking information and statements speak only as of the date on which they are made, and, except as required by law, CannTrust does not undertake any obligation to update or revise any forward-looking information or statements, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for CannTrust to predict all such factors. When considering these forward-looking information and statements, readers should keep in mind the risk factors and other cautionary statements in CannTrust’s Annual Information Form dated March 28, 2019 (the “AIF”) and filed with the applicable Canadian securities regulatory authorities on SEDAR at www.sedar.com and filed as an exhibit CannTrust’s Form 40-F annual report under the United States Securities Exchange Act of 1934, as amended, with the United States Securities and Exchange Commission on EDGAR at www.sec.gov (the “March 2019 Form 40-F”). The risk factors and other factors noted in the AIF could cause actual events or results to differ materially from those described in any forward-looking information or statements. Readers are also reminded that CannTrust remains in default of its periodic disclosure requirements under applicable securities laws and stock exchange requirements, that its most recent AIF, Form 40-F and other disclosures do not reflect all risk factors that currently face the Company, and that the Company has not completed or filed the restatements of the financial statements included in the AIF or the March 2019 Form 40-F or otherwise filed an amendment to such Form 40-F.

The TSX and NYSE do not accept responsibility for the adequacy or accuracy of this release.

Cision

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SOURCE CannTrust Holdings Inc.

Published at Fri, 28 Feb 2020 12:54:06 +0000

Agraflora Organics International Inc (OTCMKTS:AGFAF) Pleased After Farmako’s Receives A Business License

Agraflora Organics International Inc (OTCMKTS:AGFAF) Pleased After Farmako’s Receives A Business License

Agraflora Organics International Inc (OTCMKTS:AGFAF) has disclosed the latest development regarding its subsidiary Farmako GmbH. The business guru says that Farmako will be free to engage in the distribution of medical cannabis flowers. These products have undergone the ionizing radiation treatment, and it seems great times lie ahead for this subsidiary.

The license and its impact

Agraflora has described the recent development as a major milestone for Farmako, saying that the German Federal Institute for Drugs and Medical Devices had done it a huge favor.

Reports indicate that the German medical cannabis marketplace has been encountering shortages in supply. A number of reasons have been cited to explain this undersupply, one of them being the scarcity of the EU-GMP certified cannabis flowers. What makes matters even worse is the fact that the exporting jurisdictions give tough conditions. One of them has been that one uses microbial sterilization before selling out products. Canada is one of these countries.

Eckmans and his perspective

The Chief Executive Officer of Farmako Katrin Eckmans says that it is a great achievement on their part to have secured the AMRadV license. He sees as a great stepping stone that will see them succeed in their quest to solve the major barriers that have been standing on their way to achieving massive business success.

Eckmans says that it feels great falling in the category of companies that can freely import and the sterilized cannabis flowers. The official believes that Farmako is on the right path, considering that it stands to benefit from the increased supply from various countries from around the globe.

The subsidiary is eyeing the significant growth in demand for the product and says that it will be taking full advantage of that.

Market observers say that Farmako stands to gain a huge deal from the German market. Reports indicate that the medical cannabis market in German may soon expand a great deal. It is projected that the expansion may get to the point of it becoming of the world’s biggest market places, focusing on the sale of cannabis products. Farmako says that it will uphold its efforts, which are targeted at making it more competitive as a licensed pharmaceutical wholesaler.

Published at Thu, 27 Feb 2020 13:05:03 +0000

Surfside Acquires Good Harvest Co.

Surfside Acquires Good Harvest Co.

With three adult-use cannabis legalization bills pending in the legislature and strong support from the governor, lieutenant governor and the public, Pennsylvania should have no problem legalizing this year, but advocates say leadership in the legislature will likely block any proposals from advancing before the current two-year session ends in December.

Gov. Tom Wolf announced his support for adult-use cannabis legalization last fall alongside Lt. Gov. John Fetterman. Wolf then attended New York Gov. Andrew Cuomo’s Regional Cannabis Regulation and Vaping Summit in October, where the pair met with the governors of New Jersey and Connecticut in an effort to coordinate the states’ approach to cannabis policy reform.

Fetterman embarked on a recreational marijuana listening tour last year to get public input on the issue from all 67 Pennsylvania counties, and reported that he found strong public support for legalization.

Lawmakers took notice of the momentum.

Pennsylvania Rep. Jake Wheatley has announced plans to introduce the state’s newest legalization proposal in the form of House Bill 2050. The legislation aims to lower the initial application and licensing fees in an effort to make the market more accessible for businesses, and would impose a 10% wholesale tax on business-to-business transactions, although cannabis growers and processors that have partnered with an existing Pennsylvania farm would be exempt from the tax.

H.B. 2050 also levies a graduated excise tax on cannabis, which would start at 6% and increase to 12% after two years and to 19% after four years. The tax revenue generated would be used for student loan reimbursement and after school programs, among other efforts.

Wheatley’s bill also includes criminal and social justice components that would decriminalize the possession of cannabis and expunge past cannabis-related offenses.

H.B. 2050 is a revised version of House Bill 50, which Wheatley introduced last year, and which has not gained any traction in the legislature. Once Wheatley’s new bill is formally introduced, its next stop will likely be the House Health Committee, where H.B. 50 was sent last year.

“It certainly sounds like it has a lot of great provisions,” Karen O’Keefe, director of state policies for the Marijuana Policy Project (MPP), tells Cannabis Business Times. “The money would go to things like mixed income housing and grants for women- and minority-owned businesses, and it would include expungement and release, all of which are things we support.”

Pennsylvania Sens. Daylin Leach and Sharif Street are spearheading a legalization proposal in the Senate this year in the form of Senate Bill 350, which also keeps small business development and social equity at the forefront of its regulatory provisions.

“Sen. Leach was one of the prime sponsors of our medical marijuana bill, so he’s been advocating for a while,” Patrick Nightingale, executive director of Pittsburgh NORML and partner of cannabis law firm Cannabis Legal Solutions, tells Cannabis Business Times.

H.B. 2050 and S.B. 350 both allow for smaller, Pennsylvania-owned start-ups to be commercially viable in an adult-use cannabis market, he adds.

“I think some of the pushback that we have gotten is … Pennsylvania’s medical program basically created a monopoly for a small number of cultivators and dispensary license holders with a very high price point,” Nightingale says. “It was very tough to get one of these licenses, and we saw that it basically squeezed Pennsylvania farmers or small businesspeople out. Both Rep. Wheatley’s bill and Sen. Street’s bill aim to address that with tiered licenses, micro licenses and some home-grow components so that people, if they so choose, do not have to only purchase from state-licensed distribution.”

Home grow is a must for any sort of adult-use cannabis market in the state, he says, adding that a home-grow provision should also be added to the Pennsylvania’s medical cannabis law to increase patient access.

“We have over 250,000 registered patients, but the prices of the cannabis products, generally speaking, are double [the cost], if not higher, than product … available on the black market. So, Pennsylvania patients, especially patients of limited means, have found themselves in a difficult position of not being able to afford their own medicine. If we have a full adult-use marketplace with regulated cultivation and distribution, we may or may not see some of these high prices and … home grow is something we will not budge on. We must have home grow.”

The criminal justice components of H.B. 2050 and S.B. 350 are also key, he adds. “Those would also call for restorative justice in the form of expungements for people convicted of cannabis possession or conduct that would be legal under the bills. So, if you’re busted growing a few plants, you could also have that expunged from your record.”

Nightingale is also encouraged by the allocation of cannabis tax revenue in the two proposals. “Instead of just letting the revenue raised from this disappear into the general fund, both bills would earmark that revenue to go to certain specific expenses—property tax relief is a big one.”

Rep. David Delloso has also proposed legislation in the House to legalize adult-use cannabis, although his bill, House Bill 1899, would distribute cannabis through state-run stores.

“That’s not something that has a lot of support among activists or even among legislators,” Nightingale says.

MPP also has concerns about a state-run model.

“If a bill is only state-run, then there are federal concerns because marijuana is still federally illegal,” O’Keefe says. “For example, we haven’t seen the federal government prosecuting people for involvement in marijuana for some time where it’s state legal, but that could be a barrier for many reasons to the state actually getting a program up and running. The state would have pretty severe legal risks if they had state workers openly committing state felonies every day.”

Utah originally proposed state-run cannabis businesses for its medical cannabis program, and MPP urged lawmakers then to at least include the option of privately-run businesses in its cannabis law.

“So, they did, [the bill included] both [models], and then last year, two DEA [agents] came out and said, ‘This is federally illegal [and] this will put people at risk,’ so [lawmakers] removed the state-run provision and now it’s only privately run, even though the state legislature really wanted to do [a state-run model].”

Also pending in the legislature this year is Senate Bill 527, which would place an adult-use legalization initiative on Pennsylvania’s ballot to let voters decide on the issue. Pennsylvania does not allow citizens to petition for ballot initiatives, so any legalization efforts must come from the legislature, O’Keefe says.

Although the leadership in the House and Senate seems unwilling to even kick the issue to the voters, O’Keefe says MPP will continue to monitor legalization efforts in the state and broadly support policy reform.

“Our goal is to remove cannabis prohibition and replace it with a sensible regulatory structure,” she says. “We do favor provisions to promote equity to make sure there’s inclusion and diversity in the industry and … that some of the funds go to the communities hard hit by the war on drugs. Those are all things that we favor, but we support a broad array of bills.”

Unfortunately, since adult-use cannabis legalization lacks the support it needs from the leadership in both the House and Senate, Nightingale says it is unlikely that any of these bills will advance this year.

“In Pennsylvania, much like the United States Congress, the majority party sets the legislative agenda,” he says. “The Republicans are in the majority, so they control committee assignments, they control the legislative agenda, and Republican leadership in both the House and the Senate has said, ‘Under no circumstances are we taking up adult-use legalization.’ We have no Republican co-sponsors. The chair of the House Judiciary Committee will not even have a hearing on a Republican-sponsored decriminalization bill. If we don’t have Republican leadership support, these bills will go nowhere, and I do not anticipate a hearing or a vote on … adult-use [bills] in 2020. I expect them to … die in committee.”

Without sufficient support for adult-use legalization, Nightingale is turning his attention toward decriminalization efforts this year. Two bills in the House and one in the Senate aim to address decriminalization, he says.

“We understand that, politically speaking, we don’t really have the support in order to pass [the adult-use] legislation, but we still are working hard to protect Pennsylvanians and we think that decriminalization would be an excellent opportunity in the short term because we do have bipartisan support,” he says. “We have a Republican-sponsored decriminalization bill in the House, we have bipartisan support for Sen. Street’s decriminalization bill pending in the Senate, and even Pennsylvania’s conservative District Attorneys Association has supported decriminalization. There’s no reason that 20,000 Pennsylvanians should find themselves in the criminal justice system every year over the small possession of marijuana.”

MPP has been putting its resources behind email alerts in the state to raise awareness and urge the public to support the bills, O’Keefe says, but the organization has not dedicated a lobbyist to the state this year.

“The leadership in both of the legislative chambers, which are Republicans, have not been supportive of the bills getting a vote,” she says. “They made it clear last year that there was no way legislation was going to get a vote, so it’s not looking all that likely that it will pass this year, but certainly, it helps move the conversation forward for the day when it is possible to pass.”

And it is an election year, O’Keefe adds, so control in the Senate and House could shift this fall. “If the legislature refuses to act on it, of course voters can keep that in mind in November and come 2021, they might have leadership that’s more in line with where voters are.”

Published at Wed, 26 Feb 2020 21:32:00 +0000

Auxly Announces Continued Strategic Partnership and Supply Agreement With Delta 9

Auxly Announces Continued Strategic Partnership and Supply Agreement With Delta 9

Auxly Cannabis Group Inc. (TSX.V – XLY) (“Auxly” or the “Company”) is pleased to announce that it has entered into a supply agreement with its strategic partner, Delta 9 Cannabis Inc. (“Delta 9”) in which the Company will supply cannabis products to Delta 9’s multiple retail locations, where permitted.

Delta 9 is a vertically integrated cannabis company based in Winnipeg, Manitoba. Delta 9 currently operates four cannabis retail stores in Manitoba, with plans to build out a chain of retail stores under the Delta 9 Cannabis Store brand. Delta 9’s stores have become one of the top performing retail platforms in Canada since October 2017, recording over $14 million in retail revenue and over 250,000 customer transactions in the first twelve months of legal cannabis sales.

“We are so pleased to be distributing our branded cannabis products through our strategic partner’s retail stores,” said Hugo Alves, CEO of Auxly.  “We are thrilled that consumers will be able to purchase our suite of cannabis products at Delta 9 retail locations including oils, chocolates, chewables and vape products under our Kolab Project, Foray and Dosecann brands. Delta 9 was one of our first strategic partners, and we are so excited to reaffirm our partnership and joint commitment to developing a robust platform for the recreational cannabis market across Canada.”

ON BEHALF OF THE BOARD

Hugo Alves” CEO

About Auxly Cannabis Group Inc. (TSX.V: XLY) (OTCQX: CBWTF)

Auxly is an international cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the medical, wellness and adult-use markets. Auxly’s experienced team of industry first-movers and enterprising visionaries has secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading product research and development infrastructure in order to create trusted products and brands in an expanding global market.

Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.

Investor Relations:

For investor enquiries please contact our Investor Relations Team:
Email: IR@auxly.com
Phone: 1.833.695.2414

Media Enquiries (only): 

For media enquiries or to set up an interview please contact:
Email: press@auxly.com

Notice Regarding Forward Looking Information:

This news release contains certain “forward-looking information” within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as “plan”, “continue”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words, or information that certain events or conditions “may” or “will” occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the Company’s continued execution of its product development and commercialization strategy; consumer preferences; political change, future legislative and regulatory developments involving cannabis and cannabis products; and competition and other risks affecting the Company in particular and the cannabis industry generally.

A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to, whether: the Company is able to maintain its sales licenses and is able to obtain and maintain all other necessary governmental and regulatory authorizations and permits to conduct business; the acceptance and demand for Company products by consumers and provincial purchasers; and general economic, financial market, regulatory and political conditions in which the Company operates will remain the same. Additional risk factors are disclosed in the revised annual information form of the Company for the financial year ended December 31, 2017 dated May 24, 2018.

New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward-looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The purpose of forward-looking information is to provide the reader with a description of management’s expectations, and such forward-looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward-looking information contained in this release.

The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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Published at Tue, 25 Feb 2020 12:36:39 +0000

Direct Solar America, A Subsidiary Of SinglePoint, Inc. (OTCMKTS:SING), Continues To Drive New Business In 2020 With New Sales And Marketing Initiatives

Direct Solar America, A Subsidiary Of SinglePoint, Inc. (OTCMKTS:SING), Continues To Drive New Business In 2020 With New Sales And Marketing Initiatives

Director Solar, a
subsidiary of SinglePoint, Inc. (OTCMKTS:SING), is gaining new business in 2020 with
its sales, and marketing initiatives begin to offer more leads. The company
developed a new contract last week because of improvements in customer service,
efforts of canvassing teams, and partnership channels.

Posts impressive
gains

Founder and Chief Executive Officer of
SinglePoint, Greg Lambrecht, said the company is committed to improve the
business of Direct Solar and continue the development. With states quickly
introducing incentives, the company will act quickly and explore the viability
to decide to roll out new teams in that region. Solar is a hot topic and the
driving factor and helps the company to expand its business rapidly. Direct
Solar has posted revenues of $2 million in the last six months.

SEIA declares
2020 as the solar decade

SEIA (The solar energy industries association)
has declared 2020 as the solar decade. Abigial Ross Hopper, Chief Executive
Officer, and President, the solar industry, will be the main source of energy
this decade. Clean energy technologies such as solar will improve economies and
reduce green gas emissions. The solar installations in the US in Q1 2019 have
exceeded 2 million.

The solar installations are expected to
increase to 3 million next year and 4 million in 2023. It is on the backdrop of
improved environmental awareness and reduced installation costs. Renewable
solar energy is economical and a substitute for conventional energy sources.

SinglePoint
appoints a new CFO

SinglePoint has appointed Corey Lambrecht as
the Chief Finance Officer to support revenues expansion. The company will also
focus on expanding the footprint for Direct Solar. He also invested in
LifeStyle Wireless before joining SinglePoint. Corey also served on the board
of LifeStyle after it gets merged with Carbon Credits International.

President of SinglePoint, Wil Ralston, said
the company is excited to welcome Corey, who has a broad experience, to support
its existing management team and improve shareholder value. He said Corey has a
solid experience in strategic acquisitions, sustainability, and new business
development. Corey’s presence will help to scale up the solar business. The
recently acquired Direct Solar continues to provide promising results. 

Published at Tue, 18 Feb 2020 15:14:00 +0000

Its Time For Chemesis International To Execute On The Foundation They Have Built

Its Time For Chemesis International To Execute On The Foundation They Have Built

After Canopy Growth Corp. (WEED.TO) (CGC) reported better-than-expected quarterly earnings, we noticed an increase in interest in the cannabis sector and this is a trend that our readers need to be aware of.

The shift in market sentiment follows a weak period for the cannabis sector of which we continue to have a constructive long-term outlook. Although we are favorable on the shift, we continue to be highly selective on the company-level and will maintain a patient approach to the industry.

There are a number of factors that we look into when analyzing a cannabis company. We believe that a business must possess certain traits in order to be a successful public company and want to highlight three of these traits below:

  1. Management Team: We are interested in a company that is led by a management team that is comprised of leaders with diverse skill sets and proven track records of success in or outside the cannabis industry
  2. Company Performance: We are specifically interested in how the business has performed over the last few years. We prefer businesses with attractive growth prospects, ramping revenues, and a focus on profitability
  3. Balance Sheet: Capital is much tougher to access in the cannabis industry than before. We are primarily interested in companies that have a strong balance sheet and are able to capitalize on strategic growth opportunities (organic or inorganic)

Another important factor that is not highlighted in the section above is related to the structure of the business from an operational and financial standpoint. Today, we want to highlight a company that meets our criteria and is an opportunity that is flying under the radar.

The company, Chemesis International (CSI.CN) (CADMF) is in the middle of a major expansion and has been focused on the cannabis opportunity in the US and abroad. When we analyze the assets that are owned by the business, we see an opportunity that is in the early innings of a major growth cycle.

An Execution Story in the Making

During the last year, Chemesis has been highly focused on increasing market share in the cannabis markets that it is focused on. The company has been executing on this strategy and we are bullish on the markets that it is levered to. When it comes to the US market, we believe that cannabis companies need to be focused on major state markets. Chemesis is focused on several strategic markets and regions in the US and we find this to be of importance.

Through a series of investments and acquisitions, Chemesis has been able to further expand its position in the US and has been highly focused on the opportunity in California, Michigan, and Puerto Rico. When it comes to the international side of the business, the company is levered to the opportunity in Colombia and we are favorable on the advancements that have been made on this front.

Going forward, we believe that Chemesis has attractive growth prospects and are of the opinion that the market does not fully appreciate this aspect of the story. We believe that the company has a favorable risk-reward profile and find the valuation to be attractive at current levels. On a comparative basis, Chemesis is trading at a considerable discount to its peers in the US and we find this to be significant due to the leverage that it has to Colombia.

A Growth Story to be Watching

In 2019, Chemesis strengthened its leverage to the Puerto Rico and the California markets via the acquisition of GRSX, which has dispensaries in Puerto Rico and a fully licensed cannabis manufacturing facility in Northern California. We believe that the acquisition of GRSX represents a strategic transaction for Chemesis due to types of assets that are owned by each company. The combined company is better positioned to capitalize on the burgeoning cannabis opportunities in Puerto Rico and California and believe that this aspect of the story is not fully appreciated by the market.

Last year, Chemesis made its initially entry in Puerto Rico through the acquisition of Natural Ventures PR, a licensed medical cultivator, manufacturer and distributor of high-quality cannabis products. We are favorable on the value that GRSX adds to this asset and expect to see the business find substantial synergies between each other. As Chemesis continues to execute and add value to the entire operation, we expect to see the market take these assets more seriously and believe that this leverage provides the business with substantial upside potential.

In late 2019, Chemesis developed a strategy to capitalize on the cannabis opportunity in the Midwest. The company has been focused on the CBD market in Michigan and has plans to further expand its position in the Midwest. We are bullish on the growth prospects associated with the Midwest and Chemesis was an early mover on this region of the US. Over the next year, we expect the company to report ramping revenues from the Midwest and this is something that our readers need to be aware of.

Going forward, Chemesis plans to leverage the increased number of dispensaries, the partnerships, the brands, and the team to further expand and create more efficient operations. We believe that the management team has the business well positioned for growth in a number of major cannabis markets and find this to be significant.

An Opportunity that is Flying under the Radar

2020 has already proven to be a transformative year for Chemesis and we are bullish on the growth prospects associated with the assets that are owned by the business. We are also impressed with how the company has improved its leverage to the Latin American cannabis market and this is an opportunity that provides the business with substantial upside potential.

Over the next year, we expect to see Chemesis advance the business through a series of growth initiatives. The company has several significant revenue streams and we believe that the management team is focused on bringing the business down a path of profitability.

Chemesis is a company that has substantial potential catalysts for growth and we believe that the market does not appreciate this aspect of the story. From Colombia to California, the business is focused on increasing market share in burgeoning cannabis markets and we will monitor how the management team is able to execute on this.

If you are interested in learnings more about Chemesis International, please send an email to support@technical420.com and we will add you to our distribution list.

Pursuant to an agreement between StoneBridge Partners LLC and Chemesis International we have been hired for a period of 365 days beginning July 15, 2018 and ending July 15, 2019 to publicly disseminate information about (CSI) including on the Website and other media including Facebook and Twitter. We are being paid $5,000 per month for a period of 3 months. We own zero shares of (CSI), which we purchased in the open market. We plan to sell the “ZERO” shares of (CSI) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (CSI) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. This contract has been renewed for a period of 180 days beginning on August 2, 2019 and ending on February 2, 2020. This contract has been renewed for a period of 60 days beginning on January 27th, 2020 and ending on March 27th 2020.

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Authored By

Anthony Varrell

Anthony Varrell is Managing Director of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Fri, 21 Feb 2020 13:00:06 +0000

How Does The FDA’s E-Cig Crackdown Impact The Cannabis Industry?

How Does The FDA’s E-Cig Crackdown Impact The Cannabis Industry?

eCann Media is proud to showcase our portfolio of investments and subsidiaries. We have completed numerous investments across multiple verticals and sectors in the cannabis industry. Requesting an invitation will enable the eCann team to consider your eligibility for investment as well help us to identify the opportunities that best fit your needs and investment objectives.

Published at Wed, 19 Feb 2020 19:25:00 +0000

MJardin Receives Cultivation and Processing License at Second Ontario Facility

MJardin Receives Cultivation and Processing License at Second Ontario Facility

SMITHS FALLS, ON, Feb. 14, 2020 /CNW/ – PRESS RELEASE – Canopy Growth Corporation has announced its financial results for the third quarter ended December 31, 2019.  All financial information in this press release is reported in millions of Canadian dollars, unless otherwise indicated.

Third Quarter Fiscal 2020 Corporate Financial Highlights

  • Revenues: Reported Net Revenues increased 62% over Q2 2020, or 13% excluding the impact of portfolio restructuring charges. Gross Recreational B2B revenue increased 8% over prior quarter due, in part, to over 140 stores becoming active in the quarter and higher sales of premium dried flower and pre-roll joints. Our acquired businesses including Storz & Bickel and This Works also performed well, contributing to organic growth this quarter.
  • Gross margin: Gross margin before fair value impacts was 34%. Gross margin performance in quarter benefited from lower period costs due to higher facility utilization
  • Operating expenses: Total operating expenses decreased 14% versus Q2 2020 primarily due to a $20 million reduction in G&A expenses and over $31 million lower stock-based compensation versus the prior quarter
  • Adjusted EBITDA: Adjusted EBITDA loss of $92 million, a $64 million narrower loss versus Q2 2020 driven by higher sales, improved gross margins and lower operating expenses
  • Cash Position: Gross cash balance was $2.3 billion, down from $2.7 billion in Q2 2020, reflecting the EBITDA loss, capital investments and M&A

Third Quarter Fiscal 2020 Business & Operational Highlights

  • Maintained leading market share in retail, at an estimated 22%, of the Canadian recreation market as we saw a strong demand for both premium and value priced dried flower and pre-rolled joints
  • Continued market share gains and increase in the number of patients, to over 76,700, in the Canadian medical cannabis market
  • Named David Klein as new Chief Executive Officer
  • Completed first shipments of cannabis-infused edible chocolates and JUJU Power 510 batteries in December 2019
  • Storz & Bickel expanded product line with launch of Crafty+ vaporizer in November 2019
  • Announced initial line of First & Free Hemp-derived CBD products and began sales online through www.firstandfree.com, one quarter ahead of Q4 2020 target

“In Q3 we executed across Canada, in our international markets and in our strategic acquisitions to drive revenue growth,” said David Klein, CEO. “We have a lot of work to do.  We are eager to capitalize on the opportunity to create an unassailable position through a tight focus on the consumer and on critical markets.”

“We delivered significant gross improvement in the third quarter driven by stronger revenues and higher capacity utilization. Actions taken earlier this year are expected to meaningfully reduce stock-based compensation in FY21, and we have started to implement tighter cost controls across the organization,” said Mike Lee, EVP & CFO. “We plan to take further steps to reduce our costs and right-size our business to ensure that we can generate a healthy margin profile and cash generation in the coming years.”

Canadian Cannabis 

  • Recreational B2B sales increased 8% over Q2 2020, due to over 140 stores becoming active in the quarter and higher sales of premium dried flower and pre-roll joints
  • Recreational B2C sales increased 16% over prior quarter, due in part to an 11% increase in same store sales 
  • Medical sales increased 5% over the prior quarter primarily attributable to the broadening of our brand and product offerings, including the availability of products from additional CraftGrow partners, as well as an increase in number of customers to over 76,700.

International Cannabis

  • C3 revenue increased 5% over Q2 2020
  • Germany cannabis sales higher than expected due to opportunistic sales into the German market to fill a supply gap that resulted from a regulatory enforced sales halt of cannabis products offered by another vendor

Strategic Acquisitions

  • Storz & Bickel vaporizer revenue increased 46% over Q2 2020 due to solid organic growth and seasonal sales
  • This Works revenue increased 42% over prior quarter due to strong organic growth

Non-IFRS Measures

Gross margin percentage, before fair value impacts in cost of sales, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  This measure is calculated as net revenue less inventory production costs expensed to cost of sales, divided by net revenue, and may be computed from the consolidated statements of operations presented within this news release.

Adjusted EBITDA, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes and other non-cash items, and further adjusted to remove acquisition-related costs. The Company attributes Adjusted EBITDA to its operations and corporate overhead, strategic investments and business developments, and non-operating or under-utilized facilities. The Adjusted EBITDA reconciliation is presented within this news release and explained in Management’s Discussion & Analysis under “Adjusted EBITDA (Non-IFRS Measure)”, a copy of which will be filed on SEDAR.

Free Cash Flow, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies.  This measure is calculated as net cash provided by (used in) operating activities less purchases and deposits of property, plant and equipment.

Transition to U.S. GAAP Reporting

As part of our U.S. financial reporting requirements, Canopy Growth confirmed that, as of September 30, 2019, it no longer met the criteria for qualification as a foreign private issuer because (1) more than 50% of the outstanding voting securities are held by residents of the United States, and (2) the majority of Canopy Growth’s directors are United States citizens.

Therefore, as of April 1, 2020 Canopy Growth will be considered a United States domestic issuer and a large accelerated filer. As a result of this change, as of April 1, 2020, Canopy Growth will be required to prepare its consolidated financial statements, including the Company’s March 31, 2020 audited annual consolidated financial statements, in conformity with United States generally accounting principles, with such change being applied retrospectively. The extent of the impact of this change in accounting framework has not yet been quantified. Canopy Growth will also be required to provide an auditor attestation report under Section 404(b) of the Sarbanes-Oxley Act.

This press release is intended to be read in conjunction with the Company’s Unaudited Condensed Interim Consolidated Financial Statements (“Financial Statements) and Management Discussion & Analysis (“MD&A) for the three and nine months ended December 31, 2019, which will be filed on SEDAR (www.sedar.com) and will be available at www.canopygrowth.com. The basis of financial reporting in the Financial Statements and MD&A is in thousands of Canadian dollars, unless otherwise indicated.

Published at Fri, 21 Feb 2020 20:28:00 +0000