Shares of a Canadian cannabis producer took a double-digit downturn this past week as the company proposed a new public offering.
Meanwhile, two leading US-based multi-state operators (MSOs) gave new expansion strategy details.
Keep reading to find out more cannabis highlights from the past five days.
Aurora’s gamble causes share price dip
This past week has been a turbulent one for Aurora Cannabis (NYSE:ACB,TSX:ACB) shareholders.
On Monday (November 9), the producer reported an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of C$57.9 million for its first fiscal quarter of 2021. Aurora also indicated its cannabis net revenue reached C$67.8 million.
According to Aurora CEO Miguel Martin, the firm’s CBD brand Reliva is ranked as the top choice by data set company Nielsen Holdings (NYSE:NLSN). Aurora entered the US market by acquiring Reliva in May.
The company kicked off the week at US$13.15 in New York, but has since dropped in value by over 40 percent. As of Friday (November 13) at 10:43 a.m. EST, Aurora was down to a price tag of US$7.17.
The volatile period was aggravated after Aurora introduced a new public offering for gross proceeds of US$125 million. The offer prices shares of the company at US$7.50 apiece.
A report from Barron’s released mid-week shows that analysts were left unimpressed by Aurora’s recent performance, along with its new offering.
“We do not believe the company has demonstrated an enduring right-to-win for new market opportunities, particularly in the US, with the increasing competitiveness of the Canadian market challenging the company’s ability to achieve profitability while contending with liquidity issues,” Stifel analyst W. Andrew Carter wrote in a note, according to the report.
MSO expansion into new markets
Also during this past trading week, Curaleaf Holdings (CSE:CURA,OTCQX:CURLF) and Trulieve Cannabis (CSE:TRUL,OTCQX:TCNNF) outlined their respective expansion plans. Both MSOs are making critical moves into the Pennsylvania state market.
Kim Rivers, CEO of Trulieve, said Pennsylvania is “one of the most attractive medical marijuana markets in the United States.” Her company is acquiring local producer PurePenn and the Solevo Wellness dispensary network in a combined share-and-cash deal worth US$66 million.
Meanwhile, Curaleaf said its Select line of cartridge products has become available in the state market.
Pennsylvania is a medical-only market with 425,000 patients registered, according to a FOX29 report.
Cannabis company news
Earnings report season kicked off with a variety of cannabis companies reporting numbers. Here are several that shared data this past week.
- Avicanna (TSX:AVCN,OTCQX:AVCNF) reported a net loss attributable to shareholders of C$0.35 per share for its most recent quarter; it also saw an adjusted EBITDA loss of C$2.6 million. Following the report, the company announced a new public offering.
- Canopy Growth (NYSE:CGC,TSX:WEED) recorded C$135.5 million in net revenue, fueled by sales in the Canadian recreational cannabis market. However, the firm is still identifying cost-saving measures in the range of C$150 million to C$200 million.
- Canopy Rivers (TSX:RIV,OTC Pink:CNPOF) told investors the value of its investment in TerrAscend (CSE:TER,OTCQX:TRSSF) has jumped thanks to the US election. “We believe that we will be well positioned to capitalize on opportunities in the US once we are permitted to do so,” President and CEO Narbe Alexandrian said.
- The Green Organic Dutchman Holdings (TSX:TGOD,OTCQX:TGODF) reported a net loss of C$76.24 million and also confirmed the dismissal of CEO Brian Athaide.
- Harvest Health & Recreation (CSE:HARV,OTCQX:HRVSF) upsized its 2020 target revenue after reporting an 86 percent increase in total revenue for the most recent quarter.
- Sundial Growers (NASDAQ:SNDL) indicated that its net cannabis revenue dropped to C$12.9 million during the latest quarter. While CEO Zach George didn’t shy away from discussing the firm’s struggles, he is confident the company has made strides to correct its direction.
- Village Farms International (NASDAQ:VFF,TSX:VFF) saw its net sales rise to C$22.6 million for the Q3 period as its cannabis division reported another positive performance.
- Zenabis Global (TSX:ZENA) reported a net loss of C$17 million for the third quarter, which CFO Eric Rasmussen said has been attributed to “significant one-time charges related to financial transactions.”
Next week, research firm Prohibition Partners will reprise its online event “Prohibition Partners LIVE,” offering cannabis investors a place to listen to expert discussions about the state of the industry and key trends in areas like Canada, the US, Europe and Oceania.
The event kicks off on Tuesday (November 17) and will feature investment speakers like Merida Capital partner Mitch Baruchowitz and Karan Wadhera, managing director of Casa Verde Capital.
Don’t forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
CanBud Distribution Corporation Closes 2M Second and Final Tranche of its Oversubscribed Private Placement Offering
CanBud Distribution Corporation (CSE: CBDX) (FSE: CD0) (“CanBud” or the “Corporation”) is pleased to announce that it has closed the final tranche of its oversubscribed non-brokered private placement for aggregate gross proceeds of approximately $4,730,000 (the “Offering”).
The Corporation issued a combined total of 39,409,346 units (each a “Unit“) at price of $0.12 per Unit, with each Unit comprised of one common share in the capital of the Corporation (each a “Common Share“) and one common share purchase warrant (each a “Warrant“). Each Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.22 within 24 months of the closing of the Offering (the “Warrant Term“), provided, however that if the closing price of the Common Shares on the Canadian Securities Exchange (the “CSE“) (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) is $0.25 or greater per Common Share for a period of five (5) consecutive trading days at any time after the closing date of the Offering, the Corporation may accelerate the Warrant Term such that the Warrants shall expire on the date which is 30 days following the date a press release is issued by the Corporation announcing the reduced warrant terms.
Thoughtful Brands Inc. (CSE:TBI)(FSE:1WZ1)(OTCQB:PEMTF) (the “Company” or “Thoughtful Brands) announces that the letter of intent with Franchise Cannabis Corp. (“FCC”), previously announced in January, has been terminated. The previously announced European joint venture with FCC will continue and allow the Company to launch and tailor its products to European consumer demands
In connection with termination of the merger transaction with FCC, the Company has agreed to pay FCC $100,000 in cash and to issue FCC 5,000,000 common shares of the Company at a deemed value of $0.05 per share. The common shares will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws.
Mergers and acquisitions (M&A) in cannabis space have helped boost the industry to new levels.
Strategic sale of non-core assets by Lobe adds non-dilutive capital and shareholder value
Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce, further to its press release dated February 23, 2021, that it has completed the sale to Ionic Brands Corp. (“Ionic Brands”) of Lobe’s non-core cannabis assets relating to Washington-based Cowlitz County Cannabis Cultivation Inc. (“Cowlitz”) held by Lobe’s subsidiary vendor, Green Star Biosciences Inc. (the “Transaction”).
Seattle Area Grocery Chain Metropolitan Market to Begin Carrying KOIOS and Fit Soda on March 22, 2021
Adding to its existing presence on the west coast of the United States, all five KOIOS™ flavours and all four Fit Soda™ flavours will be carried in Metropolitan Market stores beginning on Monday, March 22, 2021. Serving the Seattle-Tacoma area (population 3.87 million), Metropolitan Market is one of five chains under its parent firm Good Food Holdings, which has a total of 51 stores in California, Oregon, and Washington State.
Koios Beverage Corp. (CSE: KBEV; OTC: KBEVF) (the “Company” or “Koios”) is pleased to announce that beginning on Monday, March 22, 2021, Koios’ entire line of canned beverage products will be sold at all locations of Metropolitan Market, an urban format supermarket chain in the Seattle-Tacoma area of Washington State. In Q1 2021, the Company announced multiple placements of its beverage products with regional grocers in markets on the west coast of the United States including Market of Choice in Oregon Jensen’s in Southern California and major natural grocery chain Sprouts Farmers Market which has a substantial west coast presence with over one third of its locations (360+ stores across 23 states) in California as well as Washington State 1 . The Company has also recently announced other developments relating to its expansion efforts being undertaken in 2021 such as an in-house beverage canning facility and distribution agreements with regional and national wholesale partners.