During the past trading week (August 5 to 9), Canadian cannabis producer Cronos Group (NASDAQ:CRON,TSX:CRON) suffered in the stock market after it provided predictions for its spending in the second half of 2019.
New senior listings from cannabis companies in Canada made headlines, while the latest developments from partnerships between beverage makers and cannabis companies also caught attention.
Here’s a closer look at some of the biggest news during last week’s trading period.
Established beverage brands make cannabis deals
The collaboration will go beyond drinks as AriZona Beverages will invest up to US$10 million into Dixie in subordinate voting shares at a cost of US$0.59 per share over two years. The initial agreement is set to last three years with the option for two extra sets of two years for renewal.
“The Cannabis category is an ideal space to bring the flavor and fun of AriZona into new and exciting products,” Don Vultaggio, chairman of AriZona Beverages, said in a press release. Vultaggio added that the beverage maker picked Dixie after spending time building a relationship with its management team.
Another beverage deal that caught the attention of the market was that of HeavenlyRx securing a stake in Seattle-based craft soda maker Jones Soda (OTCQB:JSDA). In an exclusive interview with the Investing News Network (INN), Paul Norman, CEO of HeavenlyRx, said the company is planning to revive the appeal of the Jones Soda brand with the announced development of cannabidiol (CBD) drinks.
“Job one is to … bring some new energy to the core, rebellious Jones brand that everybody knows,” Norman told INN. “Job two is to bring a twist to the brand by making a range of CBD-infused products.”
HeavenlyRx is a subsidiary of SOL Global (CSE:SOL,OTC Pink:SOLCF), but has plans of its own for a future public listing.
“The desire is there and there’s a lot of effort going into the process of taking the company public as soon as we can and as soon as it makes sense,” Norman said.
Cronos projects higher spending and losses
Shares of Cronos Group took a hit when it issued its financial report for Q2 and the first half of the year on Thursday (August 8) . Cronos is projecting future losses due to its spending practices.
The cannabis firm indicated net revenue for the quarter of C$10.2 million. However, Cronos reported a loss in earnings before interest, taxes, depreciation and amortization (EBITDA) of C$17.8 million.
Cronos is projecting higher spending for the second half of the year, compared to its spending of US$28.5 million during the first half of 2019, according to a Reuters report.
“As we continue to invest in our business, our brand, and (research and development) initiatives, we believe our adjusted EBITDA loss will increase in the second half of the year compared to the first half,” Jerry Barbato, CFO of Cronos, said in a call with analysts, according to a report from Yahoo Finance.
Following the results on Thursday, Cronos slid on the NASDAQ and the Toronto Stock Exchange (TSX) to close at US$13.89 and C$18.40, respectively.
Senior listings coming for various cannabis players
This past week, a collection of marijuana companies informed investors of their intentions to obtain more senior listings on exchanges in Canada and the US.
“This is an important step in the growth of TGOD, one that will broaden our investor base and increase access for international investors as we build the leading global organic cannabis brand,” Brian Athaide, CEO of TGOD, said in a press release.
John Arbuthnot, CEO of Delta 9, explained that the senior listing will help the growth of the company, saying: “This eventual listing on the TSX will help to increase trading liquidity, provide access a growing investor base interested in the cannabis industry, and raise capital for further investments.”
Cannabis market updates
Aurora is expecting to see revenue of C$100 million to C$107 million for Q4. The company also projects net revenue for its fiscal year of between C$249 million and C$256 million.
Planet 13 Holdings (CSE:PLTH,OTCQX:PLNHF) updated investors on the performance of its Las Vegas, Nevada, superstore. For the month of July, the store reported an average of 1,937 customers a day, with an average ticket price worth approximately US$90.
“In May we reached an impressive milestone, the SuperStore accounted for 10 percent of all dispensary sales in Nevada,” Larry Scheffler, co-CEO of Planet 13, said in a press release. “I’m optimistic we will see this trend continue once the department of taxation releases June and July numbers.”
Don’t forget to follow us @INN_Cannabis for real-time news 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.