The Daily Hit is a recap of the top cannabis business stories for July 11, 2022.
ON THE SITE
THC Designs Sued By Ex-Finance Director For Alleged Request To Doctor Financials
William McKenna, the former Finance Director for Los Angeles-based cannabis company THC Designs filed a lawsuit against the company on July 6, 2022. McKenna claims he was fired for refusing to defraud investors and tax authorities went the company’s owner Ryan Jennemann asked him to doctor the financials. He claims he was asked to reduce the liabilities so that the company could borrow more money. McKenna also thinks that the company was growing and selling psilocybin mushrooms for cash and not recording those sales. Read more here.
MediPharm Sells Australia Asset to OneLife Botanicals
MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) is selling its MediPharm Labs Australia Pty Ltd to OneLife Botanicals PTY in a deal valued at $6.9M AUD ($6.2M CAD). The transaction is expected to close within 90 days. The deal includes the assets of MPLA, specialized licensing, operational knowledge, and Australian and New Zealand customers currently served from that facility. All international contracts outside of Australia and New Zealand will remain with MediPharm Labs and be serviced from the Barrie GMP facility. Read more here.
Canadians Prefer To Pay Higher Prices For Flower
It seems Canadian cannabis consumers prefer to pay higher prices for flower. A new report from Cantor Fitzgerald’s analyst Pablo Zuanic found that most of the Canadian Licensed Producers (LP’s) increased market share with higher flower prices. The only exception to the rule was Organigram (NASDAQ: OGI), which saw its market jump dramatically after dropping prices almost by half. Read more here.
Neptune Wellness Revenue Drops As Company Leaves Cannabis
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) announced its financial results for the fourth quarter and full-year ending March 31, 2022. The fiscal fourth-quarter revenue totaled $11.5 million, an increase of 147% versus $4.7 million for the same period the year prior. However, it was a big drop from the company’s fiscal third-quarter revenues of $18 million. Neptune also trimmed its fourth-quarter net loss to $36.2 million versus a net loss of $43.5 million for the same quarter in 2021. Read more here.
New York Sends More Cease & Desist Letters
As the New York cannabis program moves at a snail’s pace to get the adult-use cannabis program established, numerous illicit operations have sprung up. With no real laws in place, technically most of these operators feel they can’t be charged with breaking the law. The law doesn’t exist. Plus, with cannabis mostly being decriminalized in the state, possession has also lost its threat. That has created a conflict between the legal medical cannabis operators who have spent millions creating companies that do comply with the law and the illicit operators. Plus, many are now investing even more money to try to become legal operators but watching the current illicit operators operate with impunity. Read more here.
New Lake Acquires More Properties
Cannabis REIT NewLake Capital Partners, Inc. (OTCQX: NLCP) reported $50 million of investments across three properties, marking the full commitment of capital raised during the company’s initial public offering (IPO). NewLake acquired two properties from a leading publicly-traded U.S. multi-state cannabis operator (MSO) and amended its existing lease with another leading publicly-traded U.S. MSO to fund an already completed expansion. As of June 30, 2022, NewLake has approximately $28.7 million of unfunded commitments. Read more here.
Psychedelics Market Grows Despite Many Unknowns
The psychedelics renaissance is in an expanded growth mode, not just in the U.S. and Canada, but in other countries as well. But everywhere in the world, it’s a bit of a Dr. Jekyll/Mr. Hyde scenario: startup businesses ostensibly building a serious moneymaking enterprise in a nascent industry, while conducting experiments in labs with novel brain-chemistry substances that could change the world of mental health wellness for good… if all goes as planned. Read more here.
IN OTHER NEWS
TILT Holdings Inc., Shinnecock Indian Nation
TILT Holdings Inc. (NEO: TILT) (OTCQX: TLLTF), a global provider of cannabis business solutions that include inhalation technologies, cultivation, manufacturing, processing, brand development, and the Shinnecock Indian Nation, a federally recognized Native American tribe living on their traditional lands on the eastern end of Long Island, N.Y., began construction today on Little Beach Harvest, a 5,000 square-foot cannabis dispensary located on Shinnecock tribal territory in Southampton, N.Y. Read more here.
Flora Growth Corp.
Flora Growth Corp. (NASDAQ: FLGC), an all-outdoor cultivator, manufacturer and distributor of global cannabis products and brands, announced today the appointment of Elshad Garayev to serve as Flora’s Chief Financial Officer, effective on the business day following the date on which the company files its mid-year financial results with the Securities and Exchange Commission. Until such time, Mr. Garayev will serve as Vice President of Finance and will work closely with Lee Leiderman, Flora’s current CFO, to ensure a smooth transition. Mr. Leiderman will then move into an advisory role with Flora in order to focus on his health and his family. Read more here.
Clever Leaves Holdings Inc.
Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW), a multinational operator and licensed producer of pharmaceutical-grade cannabinoids, announced today the continued expansion of the company’s partnership with European medical cannabis leader Cantourage GmbH to include supply of Clever Leaves’ second pharmaceutical-grade cannabis product, cultivated in the company’s Portugal Facilities, to the German medicinal cannabis market. Read more here.
Cannabotech (CNTC.TA), an Israeli bio-med company which is engaged in the development of a botanical drug based on Cyathus striatus fungal extract and cannabinoids extracts from the cannabis plant, reports that further to an experiment in a cell model in April 2022, which proved that the fungus-cannabinoids combination kills pancreatic cancer cells with high efficacy of up to 100%. Read more here.
The Daily Hit: July 11, 2022 on Green Market Report.