Data Confirms Robust Cannabis Demand – New Cannabis Ventures

July 12, 2020

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Two weeks ago, when we assessed the outlook for the balance of 2020, we suggested that we expect to see very strong revenue growth for the industry. We indicated that in Q2, unit volumes grew 20% sequentially for extracted THC products and 47% for flower in Florida, as an example. This week, we gained additional data for Florida for the first part of July that supports an even more bullish outlook.

Florida does a fantastic job of publishing data on a timely basis, with weekly unit volume sales shared each Friday (by provider). Friday’s report saw a surge in patient growth, which has increased by more than 5% over the past 4 weeks and has grown by more than 51% over the past year. The weekly sales of medical cannabis products and flower both set records. One has to be careful to account for the 8-day reporting period, or the absolute numbers will look even more compelling. To adjust for this, we compare the most recent two-week period to the two-week period thirteen weeks ago. On that basis, THC products have grown 36% compared to the 20% growth rate the market saw in Q2. For flower, Q3 is off to a fast start as well, growing 39%.

Florida has been reporting units of THC products for 15 months now. This is the weekly two-week average (to smooth out the 4th of July, as the 8-day period ending 7/9 was 137.5 million):

Over the past year, THC product unit volume has gained 66%. At the same time, patient count has expanded by 51%. Flower has grown even more rapidly (it has likely more than quadrupled), but the state didn’t start releasing data until mid-July a year ago. Demand remains robust, outpacing patient growth.

Florida isn’t the only market seeing robust growth. BDSA data for the month of May showed extremely strong growth in several mature Western markets. In particular, Oregon grew a stunning 87% from a year ago during May, up 15% from April. Through May, sales have grown 51%. Given that the state has been legal for so long, the growth likely represents conversion from the illicit market or perhaps some additional demand related to the pandemic.

We remind our readers that some of the newer markets with substantial public company participation are growing rapidly, particularly Illinois and Pennsylvania, which is medical-only. Supply constraints are beginning to lift, and we expect to see strong growth ahead. Illinois released data this week for June suggesting 7% growth over May. Arizona, a mature medical-only market that has substantial public company participation, grew 58% in May compared to a year ago, according to BDSA.

We have been sharing several reasons to be optimistic over the next few quarters and beyond, and the accelerating demand reinforces our outlook. We expect some strong reports from public companies in August and November.

As a leading North American cannabis operator, TerrAscend has quietly built up its business in the U.S. On May 28th, the company pre-announced Q2 revenue at C$45M, which would be up 30% sequentially. The company also expects to increase its adjusted EBITDA, which was positive in Q1. Its narrow focus on fast growing states such as New Jersey, Pennsylvania and California and its continued financial commitment from Canopy Growth as a substantial indirect equity holder and a lender position it to expand its operations. Based on the number of readers following it at Seeking Alpha, TerrAscend remains relatively unknown compared to its peers. The company continues to fly under the radar despite increased coverage from analysts, who have upgraded their outlook in recent months.

Get up to speed by visiting the TerrAscend Investor Dashboard that we maintain on their behalf as a client of New Cannabis Ventures. Click the blue Follow Company button in order to stay up to date with their progress.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:


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Alan & Joel

Chicago Atlantic Announces $30 Million Verano Credit Facility at 15.25% for 2 Years – New Cannabis Ventures

July 07, 2020

Chicago Atlantic Provides $30 Million Credit Facility to Verano Holdings, LLC

CHICAGO, July 7, 2020 /PRNewswire/ — Green Ivy Capital, LLC (“Green Ivy Capital”), an affiliate of Chicago Atlantic Group, LLC (“Chicago Atlantic”), announced today it acted as sole lead arranger and administrative agent on a new $30 million senior secured term loan facility (the “Term Loan Facility”) for Verano Holdings, LLC (“Verano”). The Term Loan Facility was led by an affiliated fund of Chicago Atlantic with participation of other institutional lenders.

The Term Loan Facility is non-dilutive, has a two-year term, and loans issued under the facility will bear interest at a fixed annual rate of 15.25%. Verano will use proceeds of the loan to support working capital, organic growth, and acquisitions.

Based in Chicago, IL, Verano has a footprint in 12 U.S. states, with 14 retail locations and six cultivation and production facilities operational. Verano plans to double the number of retail locations by the end of the year and bring more cultivation and production facilities online. The company has not raised outside equity since 2018 and is cash flow and net income positive.

We are excited to partner with Verano to support its growth plans. Their strong management team, brand, and efficient operations are exactly what we are looking for in our partners. Verano is a clear leader in the cannabis space, and the company’s unique focus profitable growth is what attracted us to this opportunity.

John Mazarakis, Principal of Chicago Atlantic

George Archos, CEO of Verano, said, “We are delighted to partner with Chicago Atlantic as a financing partner who shares our vision. We look forward to working with them given their unique position in the cannabis space and ability to support our growth.”

About Chicago Atlantic Group / Green Ivy Capital

Chicago Atlantic Group, LLC (“Chicago Atlantic”) is an asset management firm specializing in direct lending and opportunistic private credit investing. Founded in 2018 by Tony Cappell, John Mazarakis, and Andreas Bodmeier, the firm seeks to capitalize on North American investment opportunities that are time-sensitive, complex, or in dislocated markets, where risk is fundamentally mispriced. Through its affiliate Green Ivy Capital, LLC, the firm manages a diversified portfolio of credit investments in the cannabis space and is actively investing across the value chain.

Original press release

Nevada Starts Switchover To New Cannabis Regulatory Body

July 06, 2020
KUNR radio reports on the state's new compliance board which hopes to be a far more transparent and effective set up that what the the state was previously operating Click the image to go to their swanky new site They write..... Starting this month, Nevada’s new Cannabis Compliance

Public Companies Dominate the Rapidly Growing Florida Medical Cannabis Market – New Cannabis Ventures

July 05, 2020

Voters in Florida approved expanded medical cannabis legalization nearly four years ago after failing to do so in 2014, with 71% voting in favor of Amendment 2. The program has become one of the most successful limited license medical cannabis programs to date, with over 361K active patients as of July 2nd. In this review, we take a look at the history of Florida’s cannabis program, the existing marketplace and potential for future growth.


Prior to the current program, Florida permitted a limited number of patients to use low-THC strains, with several growers already operating after a 2015 application process that saw the state approve seven after receiving 28 applications from nurseries.

The approved nurseries for Low-THC included: Alpha Foliage (Southwest Region), Chestnut Hill Tree Farm (Northeast Region), Costa Nursery Farms (Southeast Region), Hackney Nursery Company (Northwest Region), Knox Nursery (Central Region), McCrory’s Sunny Hill Nursery (Central Region), San Felasco Nurseries d/b/a Grandiflora (Northeast Region). McCrory’s Sunny Hill Nursery and San Felasco Nurseries were both rejected initially but approved after successful appeal. Many of those initially denied in the Low-THC program ultimately received licenses later.

Alpha Foliage became known later as Surterra, now Parallel. Chestnut Hill is now part of Liberty Health Sciences (CSE: LHS) (CSE: LHSIF). Costa Nursery Farms became Modern Health Concepts, now part of Curaleaf Holdings (CSE: CURA) (OTC: CURLF), Hackney Nursery’s license is now owned by Trulieve (CSE: TRUL) (OTC: TCNNF). Knox Nursery’s license is now owned by Cansortium (CSE: TIUM.U) (OTC: CNTMF) and is known as Fluent. McCrory’s Sunny Hill Nursery became GrowHealthy, which was acquired by iAnthus Capital (CSE: IAN) (OTC: ITHUF). San Felasco’s license is now held by Columbia Care (CSE: CCHW) (NEO: CCHW) (OTC: CCHWF), which acquired The Green Solution’s Florida operations (and has a deal pending to acquire its Colorado operations).

Amendment 2 detailed several qualifying conditions. The current ones include:

The Florida Department of Health supervises the program, which is overseen by its Office of Medical Marijuana Use (OMMU). Florida doesn’t allow home-grow. Patients are able to access medical cannabis through dispensaries, and delivery is an option.

A major improvement was made in early 2019, when the ban on smokable flower was lifted after having been overturned by a court in May 2018. A change that lies ahead, likely deferred by the pandemic, is the addition of edibles

Existing Market

Florida has 22 medical marijuana treatment centers (MMTCs) currently approved, though not all are operational. Authorizations are made in three stages, including cultivation, processing and dispensing. Of the 22 MMTCs, 15 are permitted to dispense. Of the remaining 7, 3 have cultivation authorization, 2 have processing authorization and 2 are listed as “n/a.” The state isn’t accepting MMTC applications at this time.

Florida provides very robust data on a weekly basis. As of July 2nd, the OMMU reported 361,826 patients, which represents 1.7% of the state’s total population. The level of disclosure has improved greatly since the OMMU began sharing it in 2016. At the end of 2017, the state had 41,724 approved patients, which increased by 301% in 2018 and 79% in 2019. Over the past year, while growth has slowed, it remains in excess of 50%:

During April and May, growth in patients slowed, most likely due to the pandemic, but the four-week growth rate has sharply accelerated since Memorial Day:

Each week, OMMU details the number of dispensing locations, which now totals 255, and breaks them down by MMTC. Additionally, it provides the amount of Medical Marijuana dispensed (in milligrams of THC), the amount of Low-THC Cannabis (in milligrams of CBD) and Marijuana in a Form for Smoking (in ounces):

The 15 dispensing MMTCs include the 7 detailed above, of which 6 are public companies, as well as 8 additional ones. Of the additional MMTCs, 5 are publicly traded, including Acreage Holdings (CSE: ACRG.U) (OTC: ACRGF), which owns The Botanist, Bluma Wellness (CSE: BWEL), which operates as One Plant, Green Thumb Industries (CSE: GTII) (OTC: GTBIF), Harvest Health and Recreation (CSE: HARV) (OTC: HRVSF) and MedMen (CSE: MMEN) (OTC: MMNFF). Financial constraints at several of these companies could impede their growth in the market.

Trulieve is the clear market leader, with 20% of the dispensaries and substantial leadership in both extracted products and flower, and it derives almost all of its revenue from Florida. In Q2, it generated sales of $96.1 million. It has added 9 stores this year. Privately held Surterra Wellness has added two dispensaries and aggressively expanded its sales of flower. Curaleaf hasn’t added any dispensaries this year and has seen its share of the market decline in terms of units relative to Trulieve. Liberty Health Sciences derives all of its revenue from Florida and has added 3 dispensaries this year. In its fiscal Q4 ending 2/29, it generated revenue of C$17.8 million (about US$13 million).

Overall unit growth has been robust in 2020. In the most recent quarter, Medical Marijuana has grown almost 18% from the prior quarter compared to almost 16% comparing Q1 to Q4. In the most recent week, it expanded 57% from a year ago. Flower growth has been more robust at almost 41%, though it slowed from almost 47% growth sequentially during Q1.

Future Growth

At present, Florida is fully vertically integrated, with no wholesale activities permitted, and the market could become more efficient with a change. Many MMTCs have struggled to ramp up production, and several MMTCs would likely be better off buying wholesale than continuing to self-supply their dispensaries. Even without a change in wholesale, expanded production capacity could help meet what appears to be continuing robust patient growth. The addition of edibles, which is long overdue, is likely to boost the market as well. Rules were proposed in December, but they haven’t yet been adopted.

Looking ahead, Florida could legalize for adult-use through the ballot initiative process in 2022. The state requires 60% for an amendment to pass, making it somewhat challenging. Make It Legal Florida has proposed an amendment that would allow MMTCs to sell to any adult 21 years of age or older. There is no discussion of taxation or home-grow in the amendment. It’s also possible that the legislature could move to legalize. Earlier this year, Republican state senator filed SB 1860, but it was withdrawn from consideration in March.

With or without adult-use, the very successful Florida medical cannabis market continues to rapidly expand. Cannabis investors are able to participate in the growth through several public companies operating in the market, including two that derive the vast majority of their revenue from it.

Organigram Reduces Staff by 25% – New Cannabis Ventures

July 03, 2020

Visit the OrganiGram Investor Dashboard and stay up to date with data-driven, fact based due diligence for active traders and investors.

Organigram Provides Update on COVID-19 Corporate Action Plan and Timing for Q3 Results

MONCTON, New Brunswick-July 03, 2020-(BUSINESS WIRE)–Organigram Holdings Inc. (“Organigram” or the “Company”) (TSX: OGI) (NASDAQ: OGI) provides a corporate update on recent developments of the Company in relation to the worldwide COVID-19 pandemic and the continuing evolution of the Canadian cannabis industry.

Staffing Changes

In an effort to better align its production capacity to prevailing market conditions, Organigram has reduced its workforce by approximately 25%. The decision will affect approximately 220 employees including a small number who are not on temporary layoff. The Company will move forward with a skilled, leaner, cross-functional workforce of approximately 433 active employees operating out of its indoor production facility in Moncton, New Brunswick. Company-wide, Organigram has a total workforce of 609 employees this includes 84 employees remaining on temporary layoff who may be recalled if and when needed as the business requires.

These decisions are never easy to make, but we are committed to ensuring the Company is appropriately sized relative to market conditions – we are incredibly grateful for the commitment that our affected employees have made in helping build the Company that Organigram is today.

Organigram CEO Greg Engel

Throughout the COVID-19 pandemic, Organigram has remained focused on proactive strategies to protect the health and safety of its workers both inside and outside of its production facility as a priority, while also focusing on maintaining the continuity of its business. With a reduced workforce, the Company believes it can continue to meet current and anticipated near term demand levels.

Production Changes

For the foreseeable future the Company will continue to cultivate less than the target production capacity of cannabis its Moncton campus was originally designed for, with a focus on bringing new cultivars to market and increasing the tetrahydrocannabinol (“THC”) and terpene profile of its dried flower to meet emerging consumer demand.

Q3 2020 and Reliance on Blanket Exemptive Relief

The Company announced that it is briefly postponing the timing for filing of its interim financial statements, interim management’s discussion and analysis and related certifications (the “Q3 Interim Filings”) for the interim period ended May 31, 2020 by approximately one week.

Organigram is relying on blanket exemptive relief granted by the Canadian securities regulatory authorities that permits it to delay the filing of its Q3 Interim Filings otherwise required to be filed by July 15, 2020 in accordance with the timelines prescribed by National Instrument 51-102 – Continuous Disclosure Obligations.

The Company expects that its Q3 Interim Filings will be filed on July 21, 2020. Until such time as the Q3 Interim Filings are filed, Organigram management and other insiders are subject to a trading blackout in accordance with the terms of the blanket relief.

Given the timing of the Company’s fiscal Q3 2020 corresponding with COVID-19 coupled with changing market dynamics, the Company expects to report a decline in net revenue for fiscal Q3 2020 compared to fiscal Q2 2020 impacted by insignificant wholesale revenue being recorded in the quarter. The Company also expects to report a decrease in selling, general & administrative (SG&A) expenses for fiscal Q3 2020 compared to fiscal Q2 2020. As the Company right-sizes its production to market demand and reviews its asset carrying values, it expects to report negative adjustments to inventories and an asset impairment on its Moncton facility. Based on new production levels and its inventories on hand, the Company currently expects it will be able to meet consumer demand as it continues to adjust its operations to emerging preferences in a dynamic marketplace.

Other than as disclosed in this news release and its May 29, 2020 news release, which announced the amendment to the Company’s credit agreement dated May 31, 2019, with the Bank of Montreal as lead arranger and agent as well as a syndicate including three other lenders, there have been no material business developments since the date of the Company’s last interim financial statements filed on April 14, 2020. Notwithstanding the foregoing, the Company has issued news releases subsequent to that date copies of which are available on SEDAR at and EDGAR at

Q3 Conference Call Details

The Company plans to host a conference call to discuss its Q3 results with details as follows:

Date: July 21, 2020

Time: 8:00 a.m. Eastern Time

Toll Free (North America) Dial-In Number: (833) 502-0460

International Dial-In Number: +1 7785602593

* All participants will be required to enter Conference ID: 7882447 to gain access to the call.


A replay of the webcast will be available within 24 hours after the conclusion of the call at and will be archived for a period of 90 days following the call.

About Organigram Holdings Inc.:

Organigram Holdings Inc. is a NASDAQ and TSX listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.

Organigram is focused on producing high-quality, indoor-grown cannabis for patients and adult recreational consumers in Canada, as well as developing international business partnerships to extend the Company ‘s global footprint. Organigram has also developed a portfolio of legal adult use recreational cannabis brands including The Edison Cannabis Company, Ankr Organics and Trailblazer. Organigram’s primary facility is located in Moncton, New Brunswick and the Company is regulated by the Cannabis Act and the Cannabis Regulations (Canada).

For more information about Organigram please visit

Original Press Release

Public Cannabis Companies Continue to Rapidly Ramp Up Revenue – New Cannabis Ventures

June 28, 2020

The Public Cannabis Company Revenue & Income Tracker, managed by New Cannabis Ventures, ranks the top revenue producing cannabis stocks that generate industry sales of more than US$10 million per quarter (C$13.6 million). This data-driven, fact-based tracker will continually update based on new financial filings so that readers can stay up to date. Companies must file with the SEC or SEDAR and be current to be considered for inclusion. Please note that we raised the minimum quarterly revenue several times, including from US$7.5 million in June 2020, from US$5.0 million in October 2019 and from US$2.5 million in May 2019.

35 companies currently qualify for inclusion, with 21 filing in U.S. dollars and 14 in the Canadian currency, which is down from 46 when we reported in early June. In the U.S., we added Scotts Miracle-Gro (NYSE: SMG) after reassessing our prior decision to exclude it due to our concern that we couldn’t verify that Hawthorne Gardening segment was entirely cannabis-related. We also removed five names that fell below the revised minimum, including cbdMD, Cronos Group, CV Sciences, Indus Holdings and MJardin. Additionally, we removed Harborside and iAnthus, which missed filing deadlines, and Green Growth Brands, which is in bankruptcy and shuttered part of its operations. In Canada, we have removed four that fell below the minimum, including Delta 9 Cannabis, MediPharm Labs, Radient Technologies and Zenabis. Some companies have taken advantage of revised filing deadlines that have been extended due to the pandemic.

In May 2019, we added an additional metric, “Adjusted Operating Income”, as we detailed in our newsletter. The calculation takes the reported operating income and adjusts it for any changes in the fair value of biological assets required under IFRS accounting. We believe that this adjustment improves comparability for the companies across IFRS and GAAP accounting. We note that often operating income can include one-time items like stock compensation, inventory write-downs or public listing expenses, and we recommend that readers understand how these non-cash items can impact quarterly financials. Many companies are moving from IFRS to U.S. GAAP accounting, which will reduce our need to make adjustments. Please note that our rankings include only actual reported revenue, and not pro forma revenue. We also note that companies with non-cannabis operations must provide segment-level financial reports that detail not only revenue but also operating profit to be included in the tracker.

During June, several companies took advantage of extended filing deadlines to provide financial reports for the quarter ending 12/31 or 3/31, including 4Front Ventures (CSE: FFNT) (OTC: FFNTF), Acreage Holdings (CSE: ACRG.U) (OTC: ACRGF), TILT Holdings (CSE: TILT) (OTC: TLLTF) and  Vireo Health (CSE: VREO) (OTC: VREOF), all of which expanded sales sequentially and from year-ago levels.

Tilt Holdings actually reported both its December and March quarters during the month. Its Q4 was negatively impacted by the vaping crisis, but revenue bounced back in Q1, with the company reporting revenue in excess of $42 million, up 23% from a year ago as it reduced its operating loss. Acreage Holdings expanded reported revenue by 18% sequentially in its March quarter, while its operating loss expanded, due primarily to write-downs included in its GAAP earnings.

4Front reported December revenue of $15.7 million, up 107% sequentially, while its adjusted operating loss expanded from -$7.3 million to -$15.6 million, which excludes under IFRS accounting a large impairment of goodwill. Vireo Health  grew Q1 revenue 34% sequentially to $12.1 million while reducing its adjusted operating loss from -$9.4 million to -$6.2 million.

American Dollar Reporting – Public Cannabis Company Revenue Tracker

During July, 4Front Ventures, C21 Investments (CSE: CXXI) (OTC: CXXIF) and KushCo Holdings (OTC: KSHB) are expected to provide financial reports. C21 will be reporting its results for the fiscal year ending 1/31. 4Front will report its Q1 ending 3/31, and KushCo will report its fiscal Q3 ending 5/31.

KushCo Holdings, according to Sentieo, is expected to see revenue grow  3% sequentially to $31.1 million, with forecasts ranging from $29.0 million to $36.2 million. 4Front indicated in June that it expects to report revenue of $17.1 million. C21 pre-announced revenue of $9.5 million, suggesting it will be removed from the list.

Of the companies that report in Canadian dollars, Fire & Flower (TSX: FAF) (OTC: FFLWF), HEXO Corp (TSX: HEXO) (NYSE: HEXO), High Tide (CSE: HITI) (OTC: HITIF) and Liberty Health Sciences (CSE: LHS) (OTC: LHSIF) provided financial updates. All experienced growth sequentially and from year-ago levels.

Retailer Fire & Flower exceeded expectations of C$20.2 million in its fiscal Q1, with revenue increasing 38% sequentially to C$23.1 million. The adjusted operating loss of C$9.7 million included asset impairment charges totaling C$4.3 million. LP HEXO grew revenue 38% sequentially in its fiscal Q3 to C$22.1 million, also exceeding the consensus of C$20 million.

High Tide fell slightly short of expectations as it reported revenue of C$19.6 million in its fiscal Q2, up 43% sequentially. The company reported a slight operating profit. Liberty Health saw revenue in its fiscal Q4 grow 10% sequentially to C$17.8 million, with the Florida medical cannabis operator generating an adjusted operating profit of C$8.3 million, or 47% of sales.

Canadian Dollar Reporting – Public Cannabis Company Revenue Tracker

During July, Valens Company (TSX: VLNS) (OTC: VLNCF), Organigram (TSX: OGI) (NASDAQ: OGI), Liberty Health Sciences and Meta Growth (TSXV: META) (OTC: NACNF) are expected to provide financial updates.  Valens, according to Sentieo, is projected to see revenue decline by 29% sequentially in its fiscal Q2 to C$22.7 million, which would represent growth of 157% from a year ago. Organigram is expected to have seen revenue expand 7% sequentially in its fiscal Q3 to C$24.9 million, which would be up marginally from a year ago. There are no analyst forecasts for Liberty or Meta Growth.

For those interested in more information about companies reporting, we publish comprehensive earnings previews and reviews for subscribers at 420 Investor.

Visit the Public Cannabis Company Revenue Tracker to track and explore the complete list of qualifying companies. We have recently created a way for our readers to access our library of Revenue Tracker articles. For our readers who are interested in staying on top of scheduled earnings calls in the sector, we have have created and continually update the Cannabis Investor Earnings Conference Call Calendar.

Acreage Holdings Q1 Revenue Increases 15% Sequentially to $24.2 Million – New Cannabis Ventures

June 25, 2020

Acreage Holdings Reports First Quarter 2020 Results

NEW YORK, June 25, 2020 (GLOBE NEWSWIRE) — Acreage Holdings, Inc. (“Acreage”) (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ) today reported financial results for the first quarter of 2020.


  • First quarter reported revenue was $24.2 million, an 88% increase compared to the same period in 2019, and a 15% increase compared to the fourth quarter of 2019.
  • Pro forma revenue* was $37.6 million, a 65% increase compared to the same period in 2019, and a 17% increase compared to the fourth quarter of 2019.
  • Gross margin was 41.1%, a 10 basis point decrease versus the same period in 2019, and a 400 basis point increase compared to the fourth quarter of 2019.
  • Recorded a one-time, non-cash pre-tax charge of $196.0 million, or $164.7 million after taxes, which was associated with Acreage’s previously announced strategy to refocus its operations in certain states. This charge was higher than previously guided due primarily to impairments based on current fair market value in certain states and the write down for its services agreement in Maine, which were not initially contemplated.
  • Net loss attributable to Acreage was $172 million, while adjusted net income* attributable to Acreage was $14.7 million.
  • Pro forma adjusted EBITDA* was a loss of $11.1 million.
    *Pro forma revenue, adjusted net loss and pro forma adjusted EBITDA are non-GAAP measures. Please see discussion and reconciliation of non-GAAP measures below.

With the COVID-19 pandemic affecting millions across the U.S., the cannabis industry was faced with yet another significant challenge. Our dispensary and processing and cultivation associates quickly adapted to these changing dynamics ensuring our patients and customers in need were still served with dignity and respect, while maintaining a safe environment for everyone.

Bill Van Faasen, interim Chief Executive Officer of Acreage

Additionally, I am pleased with the reacceleration of our reported and pro forma revenue as our wholesale business continues to ramp and our dispensaries continue to mature.


Acreage will host a conference call with management on Friday, June 26th at 8:30 A.M. Eastern Daylight Time. The call will be webcast and can be accessed at To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software.


Headquartered in New York City, Acreage is a vertically integrated, multi-state operator of cannabis licenses and assets in the U.S. Acreage is dedicated to building and scaling operations to create a seamless, consumer-focused branded cannabis experience. Acreage debuted its national retail store brand, The Botanist in 2018 and its award-winning consumer brands, The Botanist and Live Resin Project in 2019.

On June 27, 2019 Acreage implemented an arrangement under section 288 of the Business Corporations Act (British Columbia) (the “Current Arrangement”) with Canopy Growth Corporation (“Canopy Growth”) pursuant to an arrangement agreement dated April 18, 2019, as amended on May 15, 2019 (the “Arrangement Agreement”). On June 23, 2020, Canopy Growth and Acreage entered into an agreement (the “Proposal Agreement”) proposing to amend certain the terms of the Current Arrangement and the Arrangement Agreement (collectively, the “New Arrangement”). Pursuant to the Current Arrangement, Canopy Growth has an option to acquire all of the issued and outstanding shares in the capital of Acreage, with a requirement to do so, upon a change in federal laws in the United States to permit the general cultivation, distribution and possession of marijuana (as defined in the relevant legislation) or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”), subject to the satisfaction of the conditions set out in the Arrangement Agreement. Pursuant to the Current Arrangement, upon the occurrence or waiver of the Triggering Event, Canopy Growth will, subject to the satisfaction or waiver of certain conditions to closing set out in the Arrangement Agreement, acquire (the “Acquisition”) each of Acreage’s class A subordinate voting shares (the “Subordinate Voting Shares”) (following the automatic conversion of the Class B proportionate voting shares (“Proportionate Voting Shares”) and Class C multiple voting shares of Acreage into Subordinate Voting Shares) in exchange for the payment of 0.5818 of a common share of Canopy Growth per Subordinate Voting Share (subject to adjustment in accordance with the terms of the Arrangement Agreement), until such time as amended in accordance with the New Arrangement. If the New Arrangement is consummated, among other things, the Subordinate Voting Shares will be exchanged for 0.7 of a Class E subordinate voting share (each whole share being a “Fixed Share”) and 0.3 of a Class D subordinate voting share (each whole share being a “Floating Share”) and the Proportionate Voting Shares will be exchanged for 28 Fixed Shares and 12 Floating Shares. In addition to various amendments to the covenants and restrictions contained in the Arrangement Agreement, the New Arrangement will provide Canopy Growth with (i) an option to acquire all of the issued and outstanding Fixed Shares in exchange for 0.3048 of a common share of Canopy Growth (each whole share, a “Canopy Growth Share”) per Fixed Share, with a requirement to do so, upon a Triggering Event, subject to the satisfaction of the conditions set out in Arrangement Agreement (as amended by the New Arrangement), and (ii) an option, exercisable in Canopy Growth discretion, to acquire the outstanding Floating Shares at the time that it acquires the Fixed Shares, for cash or Canopy Growth Shares, as Canopy Growth may determine, at a price based upon the 30-day volume-weighted average trading price of the Floating Shares on the Canadian Securities Exchange relative to the trading price of the Canopy Growth Shares on the New York Stock Exchange at that time, subject to a minimum of US$6.41 per Floating Share.

For more information about the Current Arrangement and the Acquisition please see the respective information circulars of each of Acreage and Canopy Growth dated May 17, 2019, which are available on Canopy Growth’s and Acreage’s respective profiles on SEDAR at For more information about the New Arrangement, please see Acreage’s press release dated June 25, 2020 and the subsequent public filings that may be made by Acreage from time to time in respect thereof, which are available under Acreage’s profile on SEDAR at For additional information regarding Canopy Growth, please see Canopy Growth’s profile on SEDAR at


This release contains tables that reconcile our results of operations reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”) to adjusted results that exclude the impact of certain items identified as affecting comparability (non-GAAP). We use EBITDA, adjusted EBITDA, adjusted net loss attributable to Acreage, managed results of operations, and pro forma results of operations, among other measures, to evaluate our actual operating performance and for planning and forecasting future periods. We believe the adjusted results presented provide relevant and useful information for investors because they clarify our actual operating performance, make it easier to compare our results with those of other companies and allow investors to review performance in the same way as our management. Since these measures are not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, our reported results as indicators of our performance, and they may not be comparable to similarly named measures from other companies. The tables below reconcile our results of operations in accordance with GAAP to the adjusted results mentioned above:

Due to the Company’s transition from IFRS to U.S. GAAP, certain expenses related to leased assets formerly classified as depreciation and interest expense are now included in EBITDA as a general and administrative expense. The Company’s lease expenses associated with non-finance leases were $2,337 and $1,141 in Q1’20 and Q1’19, respectively.

Managed results of operations are GAAP reported results plus the results of all entities for which we provide operational assistance to through management or consulting services or other agreements. Such entities operate independently and Acreage has no control over their operations. We do not consolidate revenue from these entities due to lack of control.

Pro forma results of operations are managed results, plus the pre-acquisition results for all acquired entities from the beginning of the applicable period presented through the date prior to the acquisition date.

Original press release

Investors Are Beginning to Embrace This Cannabis Sub-Sector – New Cannabis Ventures

June 21, 2020

You’re reading a copy of this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news.

Subscribe to receive our free weekly newsletter in your inbox each Sunday morning.


Historically, cannabis stocks have tended to move in unison. As the publicly traded cannabis sector evolves, though, we are beginning to see returns between various sub-sectors and even between the members within those sub-sectors vary from one another more than they have traditionally. The advent of more sophisticated investors, varying financial conditions among the companies and leverage to different drivers all suggest we should expect stock-picking to become increasingly important.

We break the cannabis sector into 10 different sub-sectors: Large American MSOs, Medium American MSOs.,Small American MSOs, Large Canadian LPs, Other Canadian LPs, Canadian Extraction LPs, Canadian Retailers, Ancillary Companies, CBD Companies and Biotech Companies.

Since the market bottomed in March, Ancillary Companies has been the strongest sub-sector. The New Cannabis Ventures Global Cannabis Stock Index includes 7 companies that provide goods or services to the industry, or 20% of the overall number of constituents, a representation that has expanded significantly over the past year or so as new ancillary companies have joined while many of the direct cannabis companies have been removed due to no longer meeting the minimum criteria.

Since March 18th, the Global Cannabis Stock Index has increased by 81%. As the chart illustrates, the ancillary companies have been leading the way, with 6 of the 7 companies outperforming the index:

With the index down 27% in 2020, it’s worth noting that 6 of these companies have positive returns year-to-date.
We think that there are several reasons why investors are opting for ancillary companies over direct cannabis companies. First, most of these companies trade on the NASDAQ or NYSE, which greatly expands the investor base. Second, many investors are seeing the ancillary companies as a way to get diversified exposure without having to bet on individual operators. Third, several of these companies are profitable, with some even paying dividends. Finally, these businesses are substantially less capital-intensive than direct cannabis operators.

We have been surprised by how slowly then public ancillary space has evolved to date, but we expect to see more companies in the future. Several SPACs have raised substantial capital that they can deploy only into ancillary or CBD companies. We are aware of private REITs considering going public as well.

One company apparently working on going public is behemoth Hydrofarm, an independent wholesaler and manufacturer of hydroponics equipment and grow lights. Earlier this year, it filed a Form D with the SEC indicating that it had raised $23.5 million from 18 investors as part of a $50 million private placement of equity. In December, it reported that it had sold over $7 million in convertible debt through a private placement directed by Aegis Capital. In late 2018, it reported that it raised $55 million in a private placement that included Serruya Private Equity and other investors.

We note that Scotts Miracle-Gro recently upped its guidance for its Hawthorne Gardening division, suggesting sales this fiscal year could be about $1 billion, up 45-50% from a year ago, and this type of headline in November could attract additional investor interest in the ancillary space.

Helping Cannabis Investors Navigate a New Sector Since 2013

Alan Brochstein’s 420 Investor is the only due diligence platform trusted by cannabis investors for over 6 years. The go-to premium service for investors to learn, explore, and profit from publicly-traded cannabis stocks. The primary goal of 420 Investor is to provide professional, real-time, objective information about the top cannabis companies in the market in order to help investors Capitalize on Cannabis™.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most interesting business content from this week:

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Get ahead of the crowd! If you are a cannabis investor and find value in our Sunday newsletters, subscribe to 420 Investor, Alan’s comprehensive stock due diligence platform since 2013. Gain immediate access to real-time and in-depth information and market intelligence about the publicly traded cannabis sector, including daily videos, weekly chats, model portfolios, a community forum and much more.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer a family of indices to track Canadian licensed producers as well as the American Cannabis Operator Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks that generate industry sales of more than US$7.5M per quarter.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.


Alan & Joel

Note: A previous version suggested that the majority of the Canopy Growth C3 revenue is synthetic. We have reviewed filings and determined that this isn’t the case. With that said, we have never excluded that revenue from our Public Cannabis Company Revenue & Income Tracker because the company doesn’t break out the operational profit of C3.

Grassroots Prepares to Join Curaleaf as Deal Nears Completion – New Cannabis Ventures

June 17, 2020

Exclusive Interview with Grassroots Cannabis Co-Founder and CEO Mitch Kahn

The Curaleaf acquisition of Grassroots Cannabis was announced last year. Now, the deal is moving toward closing and creating a major player in the U.S. cannabis space. Mitch Kahn, the Co-Founder and CEO of Grassroots, spoke with New Cannabis Ventures about the power of the right people, the imminent integration of the two cannabis companies and working through the pandemic. The audio of the entire conversation is available at the end of this written summary.

Leaders at Grassroots

Kahn is a lawyer and accountant by training, but he has spent the last couple of decades of his career in the real estate space. He and his partners saw a promising business opportunity in the cannabis space and quickly came to realize how much the industry is helping people.

A Grassroots Team Member Working Inside a Cultivation Facility

The Grassroots team is led by Kahn and two of his partners: Chief Operating Officer Matt Darin and Chief Strategy Officer Steve Weisman. Kahn also highlighted Chief Administrative Officer Perrine Knight and Head of Retail Talley Wettlaufer as core members of the team. The company’s people, more than anything else, help to differentiate Grassroots, according to Kahn.

U.S. Market Presence

Grassroots has a presence in 13 states across the U.S. Illinois and Pennsylvania are two of the company’s most important markets. States like Maryland, Ohio, North Dakota, Oklahoma and Arkansas are also a part of its footprint. Missouri and Michigan are recent additions to the Grassroots portfolio as well.

Processing Operations at a Grassroots Facility

Curaleaf Deal

The Curaleaf deal is expected to close shortly, and the companies are gearing up for integration. The acquisition was driven by a desire to achieve scale and a dominant position as a consumer product company in the U.S. Together, Grassroots and Curaleaf, driven by similar culture and vision, have a significant opportunity to become a winning player in the space, according to Kahn.

The Curaleaf Deal Will Make the Combined Companies a Major Player in the U.S. Cannabis Space

The acquisition has cleared federal approvals, and now the companies are working on getting the necessary state approvals. Once the deal closes, Kahn will remain as an active board member, but he will no longer have a day-to-day role.

Operations during the Pandemic

While COVID-19 has put added pressure on the industry, Grassroots has been operating as an essential business in all of its states. Over the past year, the company has been investing in a data infrastructure that has proved to be a valuable asset during the pandemic. Additionally, the company has been leveraging automation to help support curbside pickup and delivery. Kahn is pleased with how well the Grassroots team has been able to adapt to and operate in the current environment.

Grassroots Funding

At its beginning, Grassroots was funded largely by friends and family. But, as the company has grown it has added investors ranging from family offices to cannabis funds. In March of last year, it completed a convertible debt raise. Over the past seven years, the Grassroots has raised approximately $165 million between pure equity and convertible debt, according to Kahn. The company has also executed a number of sale-leaseback transactions.

Grassroots is fully funded for its existing capital projects, according to Kahn. The company is focusing its capital on projects that will provide the greatest return. For example, it is investing in expanded cultivation capacity in Illinois, Maryland and Pennsylvania, markets with supply constraints.

The Future of the Company

While the Curaleaf deal is still moving toward completion, Grassroots has a number of major growth drivers at play in 2020. The strong medical market of Pennsylvania and Maryland are both exciting for the company. Additionally, Grassroots has a significant position in North Dakota with one of two cultivation facilities and half of the dispensary licenses in the market, according to Kahn. Michigan also represents an exciting opportunity.

Kahn believes that traditional retail metrics, like revenue per square foot, will be essential measures of success in the cannabis business. As Grassroots joins Curaleaf, he anticipates that putting the right people in the right positions within the integrated company is the biggest challenge and opportunity ahead.

To learn more, visit the Grassroots website. Listen to the entire interview:

springbig Launches First Direct-To-Consumer Brand Platform for the Cannabis Industry – New Cannabis Ventures

June 16, 2020

Participating companies include Pax Labs, Jetty, Dixie, Grizzly Peak™, Oh Hi Beverages and Coda Signature

BOCA RATON, Fla., June 16, 2020 /PRNewswire/ — springbig, a leading provider in cannabis CRM and loyalty marketing technology, today announced the launch of ‘springbig Brands,’ a first-of-its-kind brand marketing platform that allows brands to directly reach cannabis consumers. This leading-edge platform allows brands to drive consumer and retailer engagement through targeted MMS and SMS message marketing while staying compliant with stringent cannabis regulations.

Cannabis brands that partner with springbig will have the opportunity to reach the platform’s 19 million active customers nationwide through dispensary text message marketing. Studies show that 99% of text messages are viewed within 4 minutes of being delivered, which is critical in driving viewership and engagement for cannabis businesses. Twelve national and local brands including Pax Labs, Jetty Extracts, Dixie Brands, Grizzly Peak™, Oh Hi Beverages and Coda Signature have already partnered with the platform, and springbig expects to work with an additional 20 brands by mid-July.

springbig’s marketing platform allows brands to send their own MMS advertising images to a dispensary’s text message marketing channel in partnership with retailers carrying their products. Once a dispensary sends out the brand’s promotion to active customers, brands will be able to monitor key performance metrics including the number of customers making a brand purchase, revenue generated from the campaign and the number of total units purchased during the campaign.

“Current cannabis marketing regulations have created a difficult climate for brands to reach new retailers and customers,” said Jeffery Harris, Founder and CEO of springbig.

We are leveraging our enormous customer base and comprehensive retail network to help brands not only reach their target consumer audiences but also offer brands the ability to place brand marketing messages directly into the smartphones of cannabis consumers.

Jeffery Harris, Founder and CEO of springbig

Our user-friendly and highly customizable platform will allow brands to work closely with over 1,400 retailers to engage with active cannabis consumers and drive ROI for both parties.

About springbig

springbig is the leading provider in customer-loyalty and communications solutions for dispensaries and cannabis retailers. Founded in 2017, springbig offers state of the art CRM programs that capture key customer data and seamlessly integrates with existing dispensary POS systems. The platform also develops custom cannabis loyalty software embedded with advanced marketing tools to retain customers and sends targeted and personalized SMS campaigns based on customer interest with a 99% open rate. springbig is helping dispensaries & cannabis retailers keep their clientele connected and engaged while allowing the store owners to track their inevitable success and ROI in real-time.

Original press release

George Scorsis has been in the highly regulated sector for nearly two decades. He worked with companies that provide energy drink, medical cannabis, and alcoholic beverages. His over 15 years of work experience made him an asset to the company. He was the CEO and director of Liberty Health Sciences, a cannabis provider in the United States. He was the President of Red Bull Canada for over four years and generated total sales of $150 million. He was the President of Mettrum Health Corporation and the chairman of the board of directors of Scythian Biosciences Corporation.