On Monday (October 29) it was revealed which cannabis producers will invest in the retail plans of National Access Cannabis (TSXV:NAC).

Following an initial announcement of a subscription investment agreement deal from NAC last Tuesday (October 23), the company closed the first round of financing.


The full list of producers consists of established public players Aphria (TSX:APH), CannTrust Holdings (TSX:TRST), VIVO Cannabis (TSXV:VIVO) and upcoming public producer Zenabis.

US Election 2020 and Cannabis

 
Investing in cannabis? Read what experts have to say about cannabis and the US Election!
 

VIVO Cannabis was the first licensed producer to confirm its initial C$5 million investment with a possible extra C$5 million if NAC meets marked quotas attached to its retail plan last week.

Zenabis disclosed it signed up for up to C$15 million common shares of NAC with an initial C$5 million purchased during the first tranche, which closed last Friday (October 26).

Rick Brar, CEO of Zenabis, said his company sees this investment as a way to develop a relationship with a company looking to set up the “most widespread” retail network in Canada.

Zenabis is set to become a public producer by way of a reverse-takeover with Bevo Agro (TSXV:BVO) performed through Sun Pharm Investments.

The first tranche NAC announced provided the company with gross proceeds of C$20 million.

Mark Goliger, CEO of NAC, indicated the company expects to set up a footprint of over 200 cannabis retail shops in the next 18 months across five Canadian provinces.

In a statement to the Investing News Network (INN) Peter Aceto, CEO of CannTrust said NAC is “poised to transform the cannabis retail landscape.” Aceto added CannTrust will make available product the company’s adult-use brands to the eventual stores.

Details of investment transaction

The producers acquired stock of NAC at a price of C$0.91 per share. The total number of shares from the retail operator as part of the first tranche was approximately 22 million.

The second and third tranches of the investment deal are attached to specific goals: reaching 50 and 100 store approvals in Canada respectively.

The second and third tranches will close on October 26 in 2019 and 2020. However, NAC holds an option with all these producers to request the purchase of the subscribed stock agreed before the deadlines of the second and third tranches.

Adult-use cannabis became legal in Canada on October 17, allowing for the setup of physical retail shops, as per each province’s guidelines.

“We believe that the retail side of the industry has great potential and with our strong cash position, we chose to make another strategic investment in a leading cannabis retailer,” stated Barry Fishman, CEO of VIVO Cannabis.

NAC attracted attention to its retail play thanks to a deal with coffee retailer Second Cup (TSX:SCU) for a network of cannabis shops in Ontario.

Second Cup has even announced plans to retrofit existing coffee retail locations in favour of cannabis stores.

Investor takeaway

Shares of all the public cannabis producers in this deal took a sharp decline during Monday’s trading session.

At market closure on Monday,NAC shares dropped 1.23 percent reaching a price point of C$0.80. Aphria, CannTrust and VIVO took declines of 17.35, 15.43 and 8.57 percent on Monday.

Outside of a negative reaction to the investment deal, shares of cannabis companies have been taking a beating following Canadian legalization in what is seen as a sell off from investors.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Editor’s Note: This story was updated to include a statement from CannTrust. This story was updated to correct the name of Rick Brar, CEO of Zenabis.

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

  • Q3 Systemwide Pro Forma Revenue increased 18% quarter-over-quarter to $22.3 million , 170% year-over-year – Company became cash flow positive from operations in August
  • Company sale leaseback transaction with Innovative Industrial Properties scheduled to close within two weeks. As a result of close, together with proceeds from the recently closed bought deal financing, the Company will have $16 million of cash and $43 million in long-term debt
  • Company is in the process of acquiring acreage to construct up to 210,000 square feet of flowering canopy and supporting manufacturing facility in Cook County, Illinois to exponentially increase capacity in state
  • Initial guidance for 2021 with Systemwide Pro Forma Revenue of $170 -180 million and Adjusted EBITDA of $40 -50 million
  • The Company’s existing projects at maturity represent a long-term revenue and EBITDA opportunity upwards of $650 million and $250 million

4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) (” 4Front ” or the ” Company “) today announced its financial results for the third quarter of 2020. All financial information is presented in U.S. dollars unless otherwise indicated.

Third Quarter 2020 Financial Results Highlights

Keep reading... Show less
  • Q3 Systemwide Pro Forma Revenue increased 18% quarter-over-quarter to $22.3 million , 170% year-over-year – Company became cash flow positive from operations in August
  • Company sale leaseback transaction with Innovative Industrial Properties scheduled to close within two weeks. As a result of close, together with proceeds from the recently closed bought deal financing, the Company will have $16 million of cash and $43 million in long-term debt
  • Company is in the process of acquiring acreage to construct up to 210,000 square feet of flowering canopy and supporting manufacturing facility in Cook County, Illinois to exponentially increase capacity in state
  • Initial guidance for 2021 with Systemwide Pro Forma Revenue of $170 -180 million and Adjusted EBITDA of $40 -50 million
  • The Company’s existing projects at maturity represent a long-term revenue and EBITDA opportunity upwards of $650 million and $250 million

4Front Ventures Corp. (CSE: FFNT) (OTCQX: FFNTF) (” 4Front ” or the ” Company “) today announced its financial results for the third quarter of 2020. All financial information is presented in U.S. dollars unless otherwise indicated.

Third Quarter 2020 Financial Results Highlights

Keep reading... Show less

Shareholders with losses exceeding $50,000 are encouraged to contact the firm

The Law Offices of Frank R. Cruz reminds investors of the upcoming December 1, 2020 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased Aurora Cannabis, Inc. (“Aurora” or the “Company”) (NYSE: ACB ) securities between February 13, 2020 and September 4, 2020 , inclusive (the “Class Period”).

Keep reading... Show less

Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the launch of preclinical research studies using psilocybin and N-Acetylcysteine (“NAC”) for the treatment of mild traumatic brain injuryconcussion (“mTBI”) with post-traumatic stress disorder (“PTSD”). The study is in collaboration with a multidisciplinary team of scientists and physicians at the University of Miami Miller School of Medicine under the lead of Michael E. Hoffer, M.D., professor of otolaryngology and neurological surgery.

NAC has been shown to be safe and efficacious in a phase I human clinical study in treating military personnel who had suffered mTBI. The initial research focus is to demonstrate the safety and efficacy of the combination of psilocybin and NAC using broadly accepted rodent models. Final results are expected in 2021. Once this is established, more specific work can examine dose response, medicine uptake, and medicine levels. The research team at the Miller School of Medicine has conducted prior studies involving NAC with mTBI and has a license from the United States Drug Enforcement Administration to conduct research using Schedule I controlled substances, which includes psilocybin.

Keep reading... Show less

Aphria Inc. (” Aphria “, ” we ” or the ” Company “) (TSX: APHA) (NASDAQ: APHA), a leading global cannabis company inspiring and empowering the worldwide community to live their very best life, announced it has closed the accretive, strategic acquisition (the ” Acquisition “) of  SW Brewing Company, LLC (” SweetWater Brewing Company ” or ” SweetWater “), one of the largest independent craft brewers in the United States (“U.S.”) based on volume. Beginning with the flagship 420 beverage offerings, SweetWater has created an award-winning lineup of year-round, seasonal and specialty beers, a portfolio of brands closely aligned with a cannabis lifestyle.

Keep reading... Show less