Simply Solventless Concentrates Ltd. has entered into a services agreement in respect of the operations of CannMart Inc. and a share purchase agreement with Lifeist Wellness Inc. for the acquisition of all of the shares of CannMart, a wholly owned subsidiary of Lifeist. The agreements related to the Transactions are dated June 25, 2024. CannMart Labs Inc., another of Lifeist’s subsidiaries, which is currently in Companies’ Creditors Arrangement Act (Canada) proceedings, is not involved in the Transactions.
SSC is also pleased to announce a non-brokered private placement of up to 14,000,000 units at a price of $0.25 per Unit for aggregate gross proceeds of up to $3,500,000 (the “Financing”). Each Unit consists of one common share and one-half of one common share purchase warrant of SSC, each whole warrant being exercisable for one common share of SSC at a price of $0.40 per share for a period of two years from the date of issue. All securities issued under the Financing will be subject to a hold period expiring four months and one day from the date of issue.
Strategic Rationale of Transaction Jeff Swainson, SSC’s President & CEO, stated: “Through CannMart, Lifeist has done a fantastic job of building two great brands, Roilty and Zest Cannabis, and achieving national reach and substantial revenue capability. Continuing SSC’s strategic objective of opportunistic acquisitions, these Transactions establish SSC as one of the leaders in hydrocarbon concentrates, taking the baton from Lifeist, and building strongly upon SSC’s leadership position in solventless concentrates. On a proforma basis, we expect to hold the #2 concentrates market share position in Alberta, #1 in Saskatchewan and Manitoba, and #6 in Ontario, and by 2024 year end we project to more than double our current annualized gross revenue to $40.0 million and our net income to $6.2 million, representing post money per share growth rates of 154% and 124%, respectively. The Financing is intended to fund these initiatives and the commissioning of in-house hydrocarbon extraction, while significantly strengthening our balance sheet with additional working capital. Moving forward, the focus of our talented team will be the integration of CannMart, continued profitable organic branded revenue growth and opportunistic acquisitions such that we provide continued value to our shareholders.”1
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1 Market share data obtained from Headset (www.headset.io) and estimated on an aggregate basis.
Lifeist and CannMart Profile, Transaction Synergies, Proforma Figures CannMart is a wholly-owned subsidiary of Lifeist, a TSX Venture Exchange (“TSXV”) listed issuer trading under the symbol “LFST”. Lifeist is a health-tech company that leverages advancements in science and technology to build breakthrough ventures that transform human wellness. For more information regarding Lifeist and CannMart, including financial information, see Lifeist’s SEDAR+ profile at www.sedarplus.ca.
CannMart owns the brands Roilty (www.roiltyconcentrates.com) and Zest Cannabis (https://zestcannabis.ca), and these brands are leaders in hydrocarbon extract products in Alberta, Ontario, Saskatchewan, and Manitoba, and with a presence in Quebec, the Maritimes, and the Territories.
CannMart has a Health Canada licensed facility in Ontario near the Ontario Cannabis Store warehouse. Key Transaction synergies and projected proforma figures are as follows:
Complimentary Products: SSC does not currently sell hydrocarbon extracts, and the Transactions give SSC a leading position in that category through CannMart.
Proforma Concentrates Market Share: Expected to be proforma #2 concentrates market share in Alberta, #1 in Saskatchewan and Manitoba, and #6 in Ontario.
Proforma 2024 Exit Gross Revenue: 220% increase in gross revenue, from $12.4 million annualized in Q1 2024 to $40.0 million proforma annualized in Q4 2024.
Proforma Normalized Net Income: 182% increase in normalized net income, from $2.2 million annualized in Q1 2024 to $6.2 million proforma annualized in Q4 2024 (normalized net income is a non-IFRS measure. See “Non-IFRS Financial Measures” below).
Proforma Gross Revenue per Share: A 154% increase in gross revenue per share, from $0.23/share annualized in Q1 2024 to $0.59/share proforma annualized in Q4 2024.
Proforma Net Income per Share: 124% increase in net income per share, from $0.04/share annualized in Q1 2024 to $0.09/share proforma annualized in Q4 2024.
Proforma Operating Costs: $5.0 million proforma annual reduction in operating costs due to significant synergies and the reduction of duplicated resources.
Proforma Inventory Turnover: A 219% improvement in inventory turnover from approximately 0.5x annualized in Q1 2024 to 1.50x proforma annualized in Q4 2024.
Proforma Current Ratio: A 63% improvement in current ratio from approximately 0.5x annualized in Q1 2024 to 1.50x proforma annualized in Q4 2024.
SSC Facility Utilization: Expected to increase SSC’s current facility utilization from approximately 25% to 50%.
CannMart Facility: The CannMart facility will serve as a packaging, storage, and logistics hub for both CannMart and SSC products and brands, allowing more cost-effective shipping to Ontario, Manitoba, Quebec, and the Maritimes.
2024 Business Plan: Achieves planned exit 2024 provincial product listings, annualized gross revenue, and annualized net income by July, 2024.
Hydrocarbon Extraction: SSC plans to commission in-house hydrocarbon extraction by Q4 2024, increasing gross margin by approximately $1,000,000 per year.
CannMart Inc. Services Agreement Under the Services Agreement, SSC will help to manage the day-to-day operations of CannMart. Key terms of the Services Agreement are as follows:
SCC will receive the benefit of 100% of CannMart’s revenue, less a service fee (“Service Fee”) of 10% of net revenue. On a net basis, SSC will receive benefit of 90% of CannMart’s net revenue.
SSC will pay 100% of CannMart’s operating expenses.
All Service Fee payments paid by SSC to CannMart during the term of the Services Agreement will be deducted from the purchase price in respect of the acquisition of CannMart.
SSC will receive the benefit of a further purchase price adjustment to reflect $500,000 of CannMart inventory at the effective date of the Services Agreement.
The Services Agreement will terminate upon closing of the acquisition of CannMart.
Share Purchase Agreement SSC will acquire all the issued and outstanding shares of CannMart on the following terms (the “Acquisition”):
Purchase Price: $500,000 cash, $500,000 in Units on the same terms as the Financing, and a vendor takeback note (“VTB”) of $1,500,000 on closing of the Acquisition.
Bonus Payment: A bonus payment equal to 20% of CannMart gross revenue generated over $3.0 million in each of the quarters following the date of the Services Agreement. The bonus payment will be satisfied by an increase in the principal amount of the VTB.
Working Capital & Debt: SSC will assume zero accounts payable, debt, or working capital.
CannMart Assets: Through the Acquisition, SSC will indirectly acquire all of CannMart’s provincial product listings, intellectual property (including the brands Roilty and Zest Cannabis), facility equipment and security systems, and Health Canada licences.
The valuation metrics of the Acquisition are as follows:
Acquisition valuation of approximately 0.18x estimated 12 month forward gross revenue (net of inventory acquired).
Assumes approximately $20 million annual gross revenue.
Closing of the Acquisition is subject to a number of conditions precedent, including but not limited to the approval of the TSXV, notification which is satisfactory to Health Canada and approval of the shareholders of Lifeist. There is no guarantee that the Acquisition will close on the terms set forth herein or at all.
$3,500,000 Private Placement of Units The Financing is expected to close on or around July 5, 2024. Each Unit is priced at $0.25 per Unit. Each Unit consists of one Common Share and one-half of one Warrant, with each whole Warrant being exercisable for one Common Share at a price of $0.40 per share for a period of two years from the date of issue. If, at any time prior to the expiry date of the Warrants, the closing price of the Common Shares on the TSXV is greater than $0.40 for any 10 consecutive trading days, SSC may, at SSC’s discretion, and at any time going forward, deliver a notice to the holders of Warrants accelerating the expiry date of the Warrants to the date that is 30 days following the date of such notice (the “Accelerated Exercise Period”). Any unexercised Warrants shall automatically expire at the end of the Accelerated Exercise Period.
Board and Management Changes Jeff Lawrence, SSC’s Vice President, Sales & Marketing, has been promoted to the position of Chief Commercial Officer. SSC has granted to several employees an aggregate of 575,000 stock options under SSC’s equity incentive plan at an exercise price of $0.25 per share and expiring on June 20, 2027. The option grants and appointment of Jeff Lawrence remains subject to the final approval of the TSX Venture Exchange. Colin Davison, a member of SSC’s board of directors, and Randeep Gill, SSC’s Vice President, Commercial, have resigned due to personal reasons. SSC thanks Colin and Randeep for their contributions.
About Simply Solventless Concentrates Ltd. SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC’s mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.
CanadaBis Capital Inc., a premium vertically integrated Canadian cannabis company, is pleased to announce results from our second quarter fiscal 2024, represented by our tenth consecutive quarter generating net revenue. The Company’s Financial Statements and Notes, as well as Management’s Discussion and Analysis (“MD&A”) are filed on SEDAR at www.sedarplus.ca. This quarter reflects another period generating positive earnings and Adjusted EBITDA1 for CanadaBis, The Company has allocated capital to innovation designed to remain ahead of competitors and to expand the SKU offering by adding multiple new products for future release.
To support the Company’s product enhancement initiatives, we have continued to adjusted our strategy to increase brand awareness and capture market share through an extensive nation-wide campaign designed to equip retailers with enhanced awareness of the various SKUs, programs and educational value-adds to CanadaBis’ wide variety of high-quality, lower-cost products. While such investments can have an impact on results in the immediate quarters, reinvesting in the business is critical to support the Company’s top and bottom line over the longer- term.
Stigma Grow continues to re-formulate concentrate and pre roll lines to meet demands from current clients to maintain larger terpene and cannabinoid profiles across the product offerings while also earning repeat sales. With these ongoing improvements, coupled with demand for our award-winning Infused Pre-rolls, Electric Dartz, Live Rosin Vapes and High-CBD Cartridges, CanadaBis anticipates continued positive performance in remainder of Fiscal 2024, while maintaining prudent financial management.
Financial Highlights for Q3 2024:
Revenue: $ 7.1 million
Net Income: $ 3.97 million
Adjusted EBITDA: $ 5 million
Operational Costs: Reduction by 20%, showcasing improved operational efficiency.
“Canadabis Capital’s performance in Q3 2024 was robust, driven by our strategic investments and continuous efforts to optimize our operational efficiencies,” said Travis Mcintyre, Chief Executive Officer of Canadabis Capital. “We are focused on enhancing shareholder value through prudent financial management and forward-thinking strategies in the evolving cannabis market.”
Operational Highlights
Expansion of Portfolio: At the tail end of Q3 2024, Canadabis Capital successfully Launched the first 60% THC pre roll into the Canadian Market, seeing excellent up take by the provincial bodies.
R&D Investments: The company invested in research and development to expand its product offerings and improve Manufacturing processes.
Partnerships: A strategic partnership was established with a Distribution company in Portugal, enhancing our distribution network and market penetration.
“Our financial discipline and strategic focus on high-growth opportunities have been key in delivering these continued positive results,” said Garfield Richards, Chief Financial Officer of Canadabis Capital. “The reduction in operational costs combined with revenue growth highlights our commitment to drive profitability and sustainable growth.”
Future Outlook Looking ahead, Canadabis Capital remains optimistic about the growth potential within the cannabis industry. The company plans to further diversify its SKU portfolio, enhance product innovation, and strengthen its market position in both domestic and international markets.
“We believe the future holds remarkable opportunities for growth as the cannabis sector continues to gain momentum globally,” added Travis Mcintyre. “Our strong financial foundation and strategic vision position us well to capitalize on these opportunities.”
About Canadabis Capital Inc. CanadaBis Capital Inc. is a vertically integrated Canadian cannabis company focused on achieving large-scale growth, from cultivation to retail, in the fast-emerging global cannabis market. By targeting organic growth opportunities alongside the right-fit partners, we remain focused on finding and capitalizing on chances to grow, diversify and continue to lead our industry.
High Tide Inc., the high-impact, retail-forward enterprise built to deliver real-world value across every component of cannabis, announced today that it has entered into a definitive asset purchase agreement dated June 25, 2024 pursuant to which High Tide will acquire a retail cannabis store in Mississauga, Ontario, currently operating as Cantopia for $600,000. The store is located at 6400 Millcreek Drive, Mississauga and is situated in a bustling retail plaza surrounded by several small businesses. It is adjacent to an internationally recognized quick-serve restaurant and is steps away from a national discount retailer and a Canadian discount grocery chain.
For the trailing three months ended May 31, 2024, the store generated annualized revenue of $2.3 Million and annualized Adjusted EBITDA1 of $0.4 Million. The purchase price represents 1.5x annualized Adjusted EBITDA for the trailing three months ended May 31, 2024.
“High Tide has always been focused on quality over quantity when looking at M&A opportunities, and this acquisition is another example of our targeted strategy. Since the end of calendar 2022, we have been focusing on greenfield growth, adding 24 locations organically with effectively no M&A. As it has been and continues to be a buyers’ market, we have been patient pursuing only the highest quality opportunities while not chasing any deals or giving into unrealistic seller’s expectations, unlike some of our peers,” said Raj Grover, Founder and Chief Executive Officer of High Tide.
“As the Canadian retail cannabis market is going through heightened consolidation, many operators are assessing the current macro conditions and the limited options available to them. Joining the High Tide family allows these retailers to weather the storm while providing us with fully operational sites with strong revenues for reasonable multiples. I am pleased to add another highly accretive store to our outstanding retail portfolio and look forward to more strategic and accretive M&A as the opportunities arise,” added Mr. Grover.
All figures are expressed in Canadian dollars unless otherwise noted.
_________________________________
1 Adjusted EBITDA is a non-IFRS financial measure.
Transaction Details The Transaction, which is an arm’s length transaction, is subject to, among other things, receipt of required TSX Venture Exchange (“TSXV“) approval, Alcohol and Gaming Commission of Ontario approval, and other customary conditions of closing, is expected to close in the coming weeks. The Consideration (the “Consideration“) for the Stores being acquired will be $600,000 paid in cash on the closing of the Transaction (the “Closing“). The purchase price represents 1.5x annualized Adjusted EBITDA for the three months ended May 31, 2024. From the Consideration, an amount equal to approximately $150,000 will be held in escrow for a period of twelve (12) months by High Tide’s lawyers to satisfy Cantopia’s indemnity with respect to possible claims based on breaches of representation and warranties.
About High Tide High Tide, Inc. is the leading community-grown, retail-forward cannabis enterprise engineered to unleash the full value of the world’s most powerful plant and is the second-largest cannabis retailer in North America by store count2. High Tide (HITI) is uniquely-built around the cannabis consumer, with wholly-diversified and fully-integrated operations across all components of cannabis, including: Bricks & Mortar Retail: Canna Cabana™ is the largest non-franchised cannabis retail chain in Canada, with 174 current locations spanning British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and growing. In 2021, Canna Cabana became the first cannabis discount club retailer in North America.
Last week, the senate in the state of North Carolina voted to approve the legalization of medical cannabis in an initial vote. Thirty-three legislators voted in favor of the proposal, including nine Republican Party members. This move comes after legislators in the state included medical cannabis in a proposal that was originally meant to regulate hemp. The updated proposal would legalize marijuana for individuals with debilitating medical conditions.
However, before it can be advanced to the house, it must be approved by the senate a second time.
In the past, GOP party members have hindered access to legal medical marijuana. For instance, Republican legislators failed to approved a measure that would have legalized the use of medical marijuana for use by patients with eligible conditions in 2023.
The second vote has been scheduled for this week.
Senator Danny Britt, who is responsible for medical cannabis’ inclusion in the proposal, stated that getting ahead of cannabis’ possible rescheduling by the federal government was necessary. This comes after the Biden Administration proposed that cannabis be downgraded to a Schedule 3 substance in May.
The public commentary period has already began and will continue until mid-July. Currently, cannabis is classified under Schedule 1 of the Controlled Substances Act, together with other drugs, including heroin, LSD, mescaline, psilocybin and MDMA, among others. Drugs under this classification are said to have a high potential for abuse and no accepted medical use.
In the meantime, the house in North Carolina may make amendments to the proposal or reject the entire bill.
When asked about the proposal’s chances of approval, House Speaker Tim Moore gave no definite answer. Instead, he stated that he believed legislators in the house would privately discuss the proposal in the coming week. In the past, Moore has shown that he is open to medical cannabis but hasn’t brought the issue to a vote because most of his GOP colleagues oppose the idea.
This proposal comes as a Native American tribe, which is the sole seller of medical marijuana in the state, prepares to launch recreational sales for individuals aged 21 years of age and older. The tribal council of the Eastern Band of Cherokee Indians recently voted to amend a code that would permit the sale of recreational marijuana, which would make the substance legal in its Qualla Boundary.
The code in question, Ordinance 63, was amended in an 8-to-2 vote. The tribe launched medical cannabis sales in April of this year.
Major marijuana companies such as TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) will be following the developments in North Carolina to see if it becomes the next state to end marijuana prohibition.
About CannabisNewsWire
CannabisNewsWire (“CNW”) is a specialized communications platform with a focus on cannabis news and the cannabis sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled recognition and brand awareness. CNW is where breaking news, insightful content and actionable information converge.
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“A myriad of opportunities has emerged for (cannabis) investors, entrepreneurs and enthusiasts worldwide,” reports Newsweek
MedCana’s agreement to begin exporting CBD buds to Switzerland appears to be particularly timely
The company noted that this new collaboration marks a “significant milestone” in the company’s expansion into the European market
Interest in cannabis is growing globally, and savvy companies operating in the cannabis space, such as Software Effective Solutions (d/b/a MedCana) (OTC: SFWJ), are working to strengthen their positions. Most recently, MedCana announced a new strategic partnership between one of its subsidiaries and a prominent Colombian company to begin export of its first crop of CBD buds to Switzerland within the next six months (https://cnw.fm/CeJOk).
“Since U.S. states such as Colorado initiated the legalization and regulation of recreational cannabis a decade ago, there has been a simultaneous shift in attitudes toward cannabis prohibition in countries around the world,” a recent Newsweek article reported (https://cnw.fm/NJUG4). “As more countries recognize the potential benefits of cannabis, both medically and recreationally, a myriad of opportunities has emerged for investors, entrepreneurs and enthusiasts worldwide.
“Today, the cannabis market worldwide is projected to reach nearly $61 billion in revenue in 2024 and is expected to reach $103 billion by 2028,” the article continued. “With almost 448.4 million people, the European Union has a potential cannabis market larger than the United States and Canada combined. At present, some form of medicinal cannabis is legal in 23 European countries, including Germany, the Netherlands and Italy, and five nations have decriminalized it. Several other European nations are embracing cannabis legalization to varying degrees, while some countries, such as Portugal and Luxembourg, are exploring or have implemented full recreational legalization.”
With these projections, MedCana’s agreement to begin exporting CBD buds to Switzerland appears to be particularly timely. A holding company focused on the cannabis and agricultural technology sectors, MedCana noted that this new collaboration marks a “significant milestone” in the company’s expansion into the European market and its commitment to delivering high-quality CBD products internationally.
“We are thrilled to partner with such a reputable local company in Colombia,” said MedCana CEO Gabriel Diaz. “This partnership not only strengthens our supply chain but also underscores our dedication to bringing premium CBD products to the global market. Switzerland represents a key market for us, and we are excited about the potential growth this collaboration will bring.”
Although the Colombian partner remains unnamed, the entity is known for its excellence in cultivation and processes, and the collaboration is designed to leverage the strengths of both companies to ensure the successful export of CBD buds that meet the high-quality standards of the Swiss market. This strategic move aligns with MedCana’s strategic goals of expanding its footprint in Europe and promoting sustainable agricultural practices in Colombia.
“This collaboration with MedCana is a testament to our shared vision of producing and delivering the highest-quality CBD products,” said Diego Flores, executive director of the Colombian partner. “We are eager to begin this journey and look forward to a prosperous partnership.”
MedCana is committed to advancing cannabis production and agricultural technology around the world, while also driving innovation and promoting sustainability. As the company moves forward with its strategic growth plans, stakeholders can expect to see enhanced profitability and a stronger global presence.
Software Effective Solutions/MedCana is a holding company focused on developing companies in the agricultural technology and cannabis industries. The company remains dedicated to delivering on its promise of building a solid foundation for future growth of its holdings.
For more information, visit the company’s website at www.MedCana.net.
NOTE TO INVESTORS: The latest news and updates relating to SFWJ are available in the company’s newsroom at https://cnw.fm/SFWJ
About CannabisNewsWire
CannabisNewsWire (“CNW”) is a specialized communications platform with a focus on cannabis news and the cannabis sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled recognition and brand awareness. CNW is where breaking news, insightful content and actionable information converge.
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GTVH enters pivotal agreement with largest note holder, T&K Zarro LLC
CEO notes that agreement demonstrates “our commitment to strengthening our capital structure and delivering tangible value to our shareholders”
The agreement is a “testament” to the company’s strategic foresight and dedication to fostering a robust and scalable business model
Golden Triangle Ventures (OTC: GTVH) continues momentum as the company announces strategic steps in its commitment to solidifying its capital structure, expanding its business operations and enhancing shareholder value. Most recently, the company revealed a pivotal agreement with T&K Zarro LLC, GTVH’s largest note holder (https://cnw.fm/3mhs9).
“This agreement marks a transformative moment for Golden Triangle Ventures,” said GTVH president Steffan Dalsgaard. “By aligning our interests with T&K Zarro, we are demonstrating our commitment to strengthening our capital structure and delivering tangible value to our shareholders. We are confident that these measures will elevate GTVH to new heights and strengthen our position in the public markets.”
Calling the transaction a “landmark agreement,” Golden Triangle Ventures noted that T&K Zarro has committed to a structured and disciplined sale of GTVH stock, limiting sales to no more than 10% of the daily trading volume on any given day. In addition, the agreement notes that T&K Zarro has agreed to a six-month moratorium on all interest accruals within its convertible debentures held in Golden Triangle.
“This moratorium period is designed to provide GTVH with the necessary time to optimize its operations and capitalize on growth opportunities,” the company noted in the announcement. “This initiative underscores GTVH’s dedication to continuously enhancing shareholder value as the company scales its operations.”
The agreement is “a testament to Golden Triangle Ventures’ strategic foresight and dedication to fostering a robust and scalable business model,” the company continued. According to the announcement, GTVH is focused on reinforcing shareholders’ investment in the company by expanding operations and optimizing capital structure, ultimately creating significant and sustainable growth.
Tom Zarro, president of T&K Zarro, noted that he is fully committed to the long-term success of Golden Triangle Ventures. “This agreement reflects my confidence in the company’s leadership and its vision for growth,” stated Zarro. “By placing a temporary moratorium on interest and adhering to a disciplined approach to stock sales, we are setting the stage for sustainable growth and enhanced shareholder value. I look forward to supporting GTVH as it embarks on this exciting journey.”
A multifaceted consulting company, Golden Triangle Ventures operates as a parent business pursuing ventures in the health, entertainment and technology sectors. The company is looking to purchase, acquire and/or joint venture with established entities within these areas of business. The goods and services represented are driven by innovators who have passion and commitment in these marketplaces. The company plans to utilize relationships and create a platform for new and existing businesses to strengthen their products and/or services. The three points of the Golden Triangle exclusively represent the three sectors the company aims to do business in.
NOTE TO INVESTORS: The latest news and updates relating to GTVH are available in the company’s newsroom at https://cnw.fm/GTVH
About CannabisNewsWire
CannabisNewsWire (“CNW”) is a specialized communications platform with a focus on cannabis news and the cannabis sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled recognition and brand awareness. CNW is where breaking news, insightful content and actionable information converge.
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The Nova Scotia Liquor Corporation (NSLC) released their most recent year-end financial report on June 25 covering April 1, 2023-March 31, 2024.
The Crown corporation, which operates 49 retail cannabis locations, sold $121 million worth of cannabis, an 8.9% increase from the previous year. Sales of local Nova Scotia cannabis products accounted for $39.5 million, or 32.7% of all cannabis sales, a 17.9% increase from the previous year.
Cannabis transactions increased by 12.2%, but the average basket size decreased by 3% to $37.27, along with a 4% reduction in the average price per gram of $5.96.
“We continue to see strong growth in cannabis sales demonstrating our continued progress in competing with the illicit cannabis market,” said Greg Hughes, NSLC president and CEO. “In addition to the expansion of our cannabis retail network, our strong vendor partnerships, including our valued local cannabis producers, have played an important role.”
NSLC also reports that 79% of Nova Scotians now live within 10 kilometres of a licensed cannabis store.
The agency, which also manages the sale of alcohol in the province, reported total annual sales of $874.5 million, with alcohol sales accounting for $753.4 million. Total earnings were $283.8 million.
Health Canada recently proposed numerous changes to the federal cannabis regulations, including increasing capacity for micro cannabis cultivators and processors, as well as cannabis nurseries.
The industry’s response to these proposed changes has generally been positive. Many of the proposals will streamline specific aspects of the regulations, arguably saving industry and the regulator time and money. The proposal also contains some changes that are likely to benefit consumers, such as allowing more than one gram in a pre-roll or allowing view windows on some dried cannabis packaging.
The increase in the amount of space someone can grow cannabis under a micro cultivation limit is something many micro cultivation licence holders tell StratCann is not something they see as much of a priority, or even something they can afford to take advantage of.
This distills down to several key reasons, says Jeff Aubin of Smoker Farms, a micro cultivator in BC’s interior. The significant issues are the federal and provincial taxes and regulatory fees. But another issue is the challenges small growers like him face in balancing all the stops in the supply chain before their product reaches consumers, and the small portion of that total consumer price that they get to keep.
“It’s completely tone-deaf from the government to even think this is the problem that everybody is facing in the cannabis industry,” says Aubin. He says other micro growers he talks with echo the same sentiment.
“Nobody says ‘Oh I don’t have enough space to grow more weed’. No, it’s always the same. I’m being overtaxed and over regulated to death. And it’s completely unsustainable.”
Aubin says even if he could afford to build more, he likely won’t, noting that he is currently only using about 3/4s of his allowed 200m2, something many other micros tell StratCann as well.
“We’d love to increase the size of our footprint, but just the construction of a new building and the price of construction these days is so daunting compared with price compression of cannabis. Raising capital to expand four times is pretty extreme for a micro cultivator like ourselves.”
Kevin McBride, Kootenays Finest Craft Cannabis
Not all micros are entirely opposed to the change, though. Kevin McBride, the general manager and QAP at Kootenays Finest Craft Cannabis, another micro cultivator in BC’s interior, says he would consider expanding his footprint if he could afford it. However, he also says he would likely build a second micro facility rather than expand his existing footprint.
“It seems like a double edged sword,” says McBride. “We’d love to increase the size of our footprint, but just the construction of a new building and the price of construction these days is so daunting compared with price compression of cannabis. Raising capital to expand four times is pretty extreme for a micro cultivator like ourselves.”
Kevin McBride, tends to his plants at Kootenays Finest Cannabis
In addition, expanding that much would mean hiring more people to manage the extra grow space, or risk quality dropping, he continues.
“We’ve got about as much as we can handle here. For us to quadruple our staff, genetics, quadruple everything, I don’t think we could do it even if we wanted to. Not to mention the raising of the capitol to do that.
“If you think about micro, craft growers trying to be as hands-on as possible. Bigger isn’t always better. The bigger you are the more automated you are, the less hands on you are. The quality seems to go down. I don’t think bigger is always better with growing.”
Instead, McBride thinks the offering may be more about benefiting smaller and mid-sized standard cultivators who would gain from some lower fees by being classified as a micro.
“To me, this seems more of an offering to medium to smaller standard LPs to lighten their load as opposed to helping micros.”
“If they wanted to really help us, where’s the help on the excise tax?”
“Nobody says ‘Oh I don’t have enough space to grow more weed’. No, it’s always the same. I’m being overtaxed and over regulated to death. And it’s completely unsustainable.”
Jeff Aubin, Smoker Farms
Aubin at Smoker Farms agrees with the concerns about excise tax but adds that there are many other issues preventing growers like him from profiting, too.
“Excise is the number one thing on the tip of everyone’s tongue,” Aubin continues. “But it’s not just that, it’s provincial taxes and fees as well…So it’s not just the excise tax, it’s the provinces that are really greedy on it, too.
“The provinces are affecting us just as much as anything else. All these provinces have such different rules. There’s no standard when it comes to trying to get your product in a province and there’s no standard how much it’s going to cost, or when you get paid.”
Josh Beckett inside his micro garden at Magi Cannabis
Josh Beckett, the owner of Magi Cannabis on Salt Spring Island in BC, takes a similar view to McBride in that he sees the proposal as something more likely to benefit standard cultivators who are already operating within, or close to, the proposed 800m2 canopy, rather than helping micros like himself get bigger.
This is because micro cultivators pay a lower rate in terms of federal regulatory fees.
While micro cultivation, micro processing, and nursery licences pay an annual $2,500 regulatory fee to Health Canada, standard cultivation, standard-processing, and sale for medical purposes licences pay $23,000. And, while micros pay 1% of their revenues on sales up to $1 million (and 2.3% on any revenue over $1 million), standards pay a flat 2.3%.
“What is the benefit of having a micro that’s four times bigger? What does it matter? Why not just go for a standard licence, or would it be better to go for a second micro?
Josh Beckett, Magi Cannabis
Since the cost of adding four times as much cultivation space would be so high, especially with the added costs of construction (and nearly everything else) since COVID-19, he says he doesn’t think most micros will be expanding, but he does see some producers downsizing to a new larger “micro” licence.
“What is the benefit of having a micro that’s four times bigger?” asks Beckett. “What does it matter? Why not just go for a standard licence, or would it be better to go for a second micro? If you were going to quadruple space, wouldn’t it be better to go for another micro licence so you could take advantage of another $1 million of 1% instead of a 2.3% gross licensing fee?
“I’m trying to wrap my head around what the big advantage is here?. What is the carrot they are throwing at us with this?”
The most significant current limit for his operation, explains Beckett, is that his location doesn’t allow him to draw more power that would enable him to expand even if he could afford to. Instead, he recently partnered with someone to build a second micro facility elsewhere on the island, an approach he says, like other growers, will be easier to manage as separate sites rather than one large grow.
That’s not to say all micro cultivators won’t look to expand, adds Beckett. But he doesn’t see a trend of any current micros wanting to expand, or even being able to afford to.
These factors, of course, are different for outdoor micro cultivators, who don’t have the same added infrastructure costs, as long as they have the land available to expand. Collier Quinton, co-founder & cultivation director at Weathered Islands Craft Cannabis, a micro and nursery licence holder on BC’s Texada Islan, says if the rules come into force, they will consider expanding but notes they will need to put in more security fencing and extensive work to prepare the land, including excavation, and installation of beds and drip lines.
Similar to other micros, with the current state of the market, he says it can be difficult to justify those expenses or find outside investors.
“We would take a serious look at it,” Quinton tells StratCann. “It makes a lot of sense, but this is also a challenging market and investing more money at this point in time needs to be seriously considered.”
The Ontario Cannabis Store (OCS) says it plans to begin providing cannabis producers with more specific cannabis sales data, including access to store-specific information.
In an announcement posted on the OCS’ B2B platform on June 25, the Crown corporation says it will be offering its cannabis producer-partners “greater visibility into the specific authorized stores that are purchasing their products through the OCS” which includes the types of products each of these store’s order from OCS each day at the SKU-level and the number of units ordered from OCS by each retailer, by SKU, each day.
These are changes many Canadian cannabis producers have been asking provincial cannabis agencies, like the OCS, to provide for some time. Such figures will allow producers to better understand what products are selling better in what parts of the province, providing an opportunity for more targeted sales measures. Alberta and BC have provided similar data programs for producers/suppliers.
The OCS is gearing up to roll out these changes in the “coming months”, a development that will build upon the existing Supplier Data Program. This, in turn, will assist cannabis producers/suppliers with sales and operations planning, leading to improved inventory availability, fulfilment, and delivery service levels for Authorized Retail Stores.
The OCS offers two levels to its supplier data program. Level one allows OCS suppliers to access insight into their products’ sales performance across the province. A level two data subscription also provides access to more broad sales figures about other producer/supplier sales.
Suppliers will only receive detailed and specific SKU and store-level wholesale sales data for their own products. This information will only come from the OCS, not from any retailer point-of-sale metrics or retailer inventory data. Suppliers also cannot provide the store-level wholesale sales information from OCS with anyone outside of their organization.
Providing suppliers with this sales data will also build upon the OCS’ Flow Through distribution channel, ensuring suppliers can better forecast sales demands. Flow Through allows retailers to order products the OCS does not typically carry in the world’s largest cannabis distribution warehouse.
The OCS is seeking industry feedback on the changes to its supplier data program through July 9, 2024.
Florida’s initiative to legalize recreational marijuana is causing a significant divide within the state’s medical cannabis sector. Florida’s largest medical cannabis company, Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF), is supporting Amendment 3, which seeks to legalize recreational cannabis for adults over age 21.
However, approximately 2,000 doctors certified to prescribe medical marijuana are expressing concerns. They warn that this amendment could disrupt access for the state’s 882,000 medical-cannabis patients.
The influx of recreational users could deplete the marijuana products and specific strains that patients rely on for conditions such as severe pain. The passage of Amendment 3 may also result in a reorganization of regulations, giving the Republican-led legislature, which has always favored stricter rules, more authority.
Dr. Michelle Beasley, a Pensacola-based cannabis doctor, finds herself in a difficult position. Although she supports legalization, she is wary of the “poison pill” language in the medical cannabis legislation. This provision states that the law will expire if voters pass another marijuana-related amendment.
The 2017 medical cannabis law, approved by the legislature following the 2016 voter-approved amendment for medical use, contains a sunset clause that mandates the law’s expiration six months after any new marijuana-related constitutional amendment is adopted. The intention was to create a single regulatory framework. However, it also grants the Republican-controlled legislature greater freedom to regulate the industry, potentially reverting to the restrictive low-THC law of 2014 if no new regulations are passed.
Amendment 3 is up for vote in November and requires 60% of the vote to pass. If enacted, it would enable Florida’s authorized medical-cannabis dispensaries to sell to the general public; the legislature would decide on future recreational licenses.
There’s nothing to worry about, according to the campaign supporting Amendment 3. Medical cannabis providers and patients, they claim, are protected by the amendment. Smart and Safe Florida, the committee that supports the legislation, argues that any sunset would be in violation of the 2016 medical cannabis amendment and that the wording referring to “poison pill” is meaningless. They do admit, however, that the sunset provision is not guaranteed.
One of the main proponents of the 2017 law, Senator Jason Brodeur, said that new regulations would be required. He referred to the financial impact statement for 2023, implying that a straightforward interpretation of the wording would necessitate a fresh start.
Over the years, there have been unsuccessful attempts to remove the sunset clause. The most recent attempt failed last year when a bill to limit the amount of THC in recreational cannabis failed to pass.
Doctors are increasingly concerned as polling shows that Amendment 3 could surpass the 60% voting threshold. A Fox News poll released recently indicates that 66% of voters support legalization.
Not all physicians think the sunset clause will be implemented. DocMJ CEO Aaron Bloom doubts the sunset clause is a threat but worries that dispensaries will shift focus from patients to recreational users. Bloom notes that some clinics have already begun stocking items intended for recreational use. He worries that if the focus changes, dispensary employees might not be properly trained to help patients and might even suggest inappropriate goods.
Beasley and others anticipate a decline in business from patients needing follow-up appointments, which are required by the state to continue using medical cannabis. Further, she notes that some patients might find it cheaper to purchase recreational cannabis, avoiding the approximately $500 in doctor visits and annual state fees associated with the medical program. Ultimately, the decision rests with the legislature and voters.
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