All posts by admin2

CannabizTeam Opens New Offices in Newark

CannabizTeam Opens New Offices in Newark

Last week, New Jersey Governor Phil Murphy ended a weeks-long legislative saga that saw cannabis legalization—supported by more than two in three voters in November—finally go into effect. On Feb. 22, Murphy signed a bill to legalize and another bill clarifying penalties for underage possession, a sticking point that had stalled the development of the legal industry. 

Stopping low-level cannabis arrests and moving forward on an initiative the state’s voters approved nearly four months ago is just the start. Those fighting for a fair industry in New Jersey say there’s still a long way to go to ensure the new state market helps correct the previous decades of biased law enforcement.

Racial disparity in New Jersey prohibition

Between 2010 and 2018, Black people were 3.5 times more likely to be arrested for cannabis across the state. In certain counties, that discrepancy shoots up to over 13. And according to the ACLU, the disparity has gotten worse over time—in 2000, Black people were arrested 2.2 times as often.

“New Jersey averaging 32,000 arrests a year for low-level, nonviolent, minor possession of cannabis—and 80% of those arrested were people who look like me—is not a fluke or happenstance,” said Leo Bridgewater, Director of Veterans Outreach for Minorities 4 Medical Marijuana (M4MM) and an advocate in the state’s effort for cannabis reform.

He and others involved in New Jersey’s legalization process, who spoke to Cannabis Business Times and Cannabis Dispensary via email, weighed in on how Garden State lawmakers should proceed from here on out to create an industry that can begin to compensate for many years of racially biased law enforcement.

What will it take for a fair industry?

Recent estimates from The New York Times project that legal cannabis will bring the state of New Jersey more than $125 million in annual revenue. In many other legalized states—from early-movers like Colorado to newcomers like Illinois—markets are dominated by white-owned businesses, who often control 80 to 90% of state industries.

“There have always been glaring social justice concerns and obvious inequity in the high number of arrests of minority residents. Now, finally, this is the time for it to stop,” said Assemblyman Jamel Holley in a statement to the media announcing the bill’s signing.

Proponents of an equitable industry say that New Jersey could end its long-running racial and socioeconomic disparity in cannabis with a few key steps:

Equity licenses

With varying degrees of success, states like Michigan and California have offered special licenses for people from cities and counties hit hardest by cannabis prohibition. Given the disparity in arrests between various counties of New Jersey, this approach is one option upcoming legal market. 

Matt Platkin, partner at Lowenstein Sandler and former chief counsel the governor, said the state intends to follow a similar strategy.

“In drafting this legislation, the governor and the legislature placed a heavy emphasis on those communities that were disproportionately affected by the criminalization of cannabis,” said Platkin. “Priority for new licenses will be given to applicants from those communities, as well as to individuals who reside in New Jersey. The legislation also seeks to issue at least 30% of all new licenses to minority, women or veteran-owned businesses.”

Bridgewater noted that the bill’s text includes the creation of an Office of Minority, Disabled Veterans, and Women Cannabis Business Development to help empower disadvantaged entrepreneurs who still want to participate in the industry. This office will be part of New Jersey’s Cannabis Regulatory Commission (CRC), which will oversee the state’s new industry and the way it creates standards for cannabis licensing.

Funding from tax revenue

Cannabis tax dollars could serve as a boon to state-level economies, many of which are still suffering under the fiscal strain wrought by the pandemic. California recently announced the state has brought in over $2 billion in tax revenue from the legal cannabis industry since the program launched in 2018.  

New Jersey’s cannabis tax structure begins with a 6.6% state sales tax, on top of which can be added a 2% tax for towns and cities. Under the new law, the CRC also has the option to implement a sliding excise tax earmarked for social equity causes. This unique structure varies from $10 to $60 per ounce depending on the retail cost of the product.

Home grow

For decades, supporters of home grow laws have argued that allowing people to grow their own cannabis is one of the easiest ways to ensure universal access. Late efforts to pass a separate bill to allow medical patients to grow were unsuccessful, making New Jersey one of the only states with adult-use and medical cannabis—but no home grow. State officials expressed fears it would keep money flowing into legacy cannabis markets and stall the growth of the legal industry, a claim dismissed by proponents.

“Just because you craft brew or have a pizza oven at home doesn’t mean you won’t grab a beer and a slice of pizza,” said Chirali Patel, a New Jersey-based attorney, cannabis entrepreneur and executive board member on the New Jersey State Bar’s Cannabis Law Committee. “Home grow is a basic right and certainly one for patients at a minimum.”

Looking ahead

Attention in the state’s developing cannabis industry will now shift to the formation of the CRC and the way it chooses to implement its rules and execute on its new mandate. Bridgewater, who predicted adult-use sales will begin in 12 to 18 months, also pointed out the importance of the personnel leading the state’s new cannabis agency. Dianna Houenou, former senior adviser to Murphy and policy counsel for the state’s ACLU chapter, will chair the CRC. Murphy announced the appointment of the final two members of the five-person commission last week.

Above all, cannabis legalization advocates are hoping it will help lead to additional reforms that continue addressing the longstanding racial disparities in New Jersey law enforcement. 

“The intentional targeting and tormenting of people and communities of color in this state has been a massive money maker for the prison industrial complex,” said Bridgewater. “Cannabis legalization only took away one tool out of a box filled with many others. Ending the targeting and tormenting of Black and brown communities for prison profits is how we truly begin to heal together as a state and nation.”

Published at Tue, 02 Mar 2021 22:00:00 +0000

Icanic Brands Announces Mr. Mark Smith as Executive Chairman

Icanic Brands Announces Mr. Mark Smith as Executive Chairman

Icanic Brands Company, Inc. (CSE: ICAN, OTCQB: ICNAF) (“Icanic Brands” or the “Company”), a multi-state brand operator of premium Cannabis brands in California and Nevada, is pleased to announce that effective March 1st, 2021, Mr. Mark Smith has been appointed as the Company’s Executive Chairman.

Mr. Smith brings a wealth of expertise to this role, having founded, built and transacted over $200,000,000 USD in US Cannabis businesses over the past 7 years. His capabilities include extensive industry start-up and scaling experience, strong financial orientation and experience operating in highly regulated markets including Colorado, Nevada and Michigan. Mr. Smith is an experienced and proven Cannabis entrepreneur with a track record of building enduring industry brands while leveraging operational scale. Mr. Smith has been actively involved in developing best-in-class brands such as Cannapunch, Highly Edible, Dutch Girl and Nordic Goddess (all of which were acquired by AYR Wellness Inc. formerly, AYR Strategies Inc. and Cannabis Strategies Acquisition Corp.) as well as developing a chain of dispensaries with his team members (his family) called Tumbleweed.

“What has attracted me to this venture is the talent and energy of the Icanic Brands team, predominately the CEO’s vision to leverage the Ganja Gold family of brands and attract additional acquisition partners. You can’t put a price on human capital and his energy and exuberance has been a missing ingredient in most cannabis companies who are not builders of businesses. We will be builders,” says Mr. Smith.

– ADVERTISEMENT –

In his role as Executive Chairman at Icanic Brands, Mr. Smith will focus his time and energy on expanding the Company’s brand footprint in new states, new product development and expansion of the product line all with the singular goal of increasing financial performance with a laser focus on maximizing cash flow and earnings per share. Mr. Smith is widely regarded and respected in the US Cannabis industry as a thought leader and innovator. His network and relationships across the industry will provide the Company with nearly unrivalled access to new product ideas, innovative brands that leverage manufacturing capability and teams that can execute on them.

“Icanic Brands is a unique and highly exciting growth opportunity as the US heads towards a major shift in federal cannabis laws and legislation. The Company has been able to develop what is now a California legacy brand in Ganja Gold and through investment in automation, is at forefront of dominating and extending the pre-roll space in the country,” said Mr. Smith. “I look forward to working with the team to build on the foundation and accelerate expansion into new territories, brands and product categories. Profitability is challenging and I intend to ensure that Icanic Brands continues to be profitable through the disciplined allocation of capital and introducing truly differentiated and innovative products.”

“I am humbled and excited to have Mark join our team in this leadership capacity. His tenure and acumen in the space is unparalleled. His experience in launching new products, building lasting brands and doing so profitably is going to be immediately impactful in our current environment and positioning in the market,” said Mr. Brandon Kou, CEO and Director of Icanic Brands.

Mr. Mark Smith will be issued 500,000 options at $0.55 and additional milestone-based performance equity and currently owns 2,000,000 shares and is in the process of acquiring additional shares.

About Icanic Brands Company, Inc.

Icanic Brands Company, Inc. is a leading cannabis branded products manufacturer based in California & Nevada, the largest and most competitive cannabis markets in the world. The company’s mission is to make cannabis safe and approachable – that starts with manufacturing high-quality products delivering consistent experiences.

For more information, please visit the company’s website at: www.icaninc.com.

About Ganja Gold

Ganja Gold, Inc., a wholly-owned subsidiary of Icanic Brands Company, Inc. (CSE: ICAN, OTCQB: ICNAF), is the premier brand of infused pre-rolls in the state. Ganja Gold focuses on using only the best available flower and concentrates with state of the art proprietary technology to create connoisseur level pre-rolls unseen in the marketplace. With our flagship Tarantula™, Ganja Gold continues to set the bar in quality and experience.

For more information about Ganja Gold, visit their website at www.ganjagold.com

ICANIC BRANDS COMPANY INC.

Per:“Brandon Kou”
Chief Executive Officer

For further information about Icanic Brands, please contact the Company at:
Email: ir@icaninc.com
Phone: (778)999-4226

The CSE does not accept responsibility for the adequacy or accuracy of this release.

Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release. The Canadian Securities Exchange has not in any way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

This news release may include forward-looking statements that are subject to risks and uncertainties. All statements within, other than statements of historical fact, are to be considered forward looking. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws.

Share

Share - Facebook


Share - Twitter

Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Mon, 01 Mar 2021 12:40:43 +0000

Dispensaries Prepare to Sell Medical Cannabis in West Virginia

Dispensaries Prepare to Sell Medical Cannabis in West Virginia

In early February, the West Virginia Office of Medical Cannabis (OMC) announced the successful applicants to receive a medical cannabis dispensary permit.

RELATED: Medical Cannabis Dispensary Permits Announced in West Virginia

The OMC posted the full list of dispensary permit holders on its website, which consisted of Ohio-based medical cannabis dispensary Terrasana Cannabis Co. and West Virginia-based medical cannabis dispensary Harvest Care Medical.

Terrasana applied to receive six dispensary permits at the beginning of this year and was awarded all six. The dispensary business was also granted a cultivation and processing license, said William Kedia, Terrasana Cannabis founder and CEO. 

Both dispensaries are making changes and finalizing a game plan in preparation for the expansion.

“The hiring process will not start until we start construction, just because of the timeline,” Kedia said. “I don’t want people waiting on us to do the project for three to five months until it’s finalized. So, as we get to those time points in our game plan, we will hire appropriately and train everyone so everyone is on the same page and ready to go the minute we get the dispensaries, growing and processing facilities all open at the same time.”

RELATED: Harvest Care Medical Prepares to Launch Medical Cannabis Operations in West Virginia: The Starting Line

As for Harvest Care Medical, who won ten dispensary permits, along with cultivation and processing permits, the company is in the process of locking in its properties and is working with architects, engineers and general contractors, said Chief Development Officer Dustin Freas.

Although both dispensaries are getting ready for the expansion, they are unsure when their dispensary, cultivation and processing sites will officially open.

“Our plan is to have all six built out and open later this year, but between COVID and the wintertime, getting contractors to do the build-out has been a challenge,” Kedia said. “And now you have this mass influx of construction projects in West Virginia with everyone trying to build their dispensaries and processing centers, so finding good quality contractors to complete the project in a timely fashion is going to be a challenge.”

Harvest Care Medical is facing a similar challenge.

“We’re in the middle of a pandemic, so it’s not exactly business as usual,” Freas said. “Ordering supplies and equipment that you need could be on backorder, or a construction crew could get COVID, you know?”

Freas said the dispensary must have its grow site operational within six months from the day of the award with one 90-day extension, meaning he thinks that most cultivators who want to be the first to market patient access could have plants propagated by either May or June.

Both Freas and Kedia said one of the biggest challenges would be making sure the product is available and ready for sale when dispensaries open. 

“There is going to be a time lag between when cultivating facilities are constructed and when products are available,” Kedia said. “So, you plant the seed, and then by the time you actually harvest and market the products, it’s about a 10-12 week process. So, you don’t want to have the dispensary open, and then they have the expectation of having the product, and you don’t have anything on the shelves, so there’s a bit of juggling we are going to have to do to make sure this all lines up correctly.”

Additionally, one of the areas that Freas is trying to lobby and work hard on is increasing the patient count in the state, he said.

“There are currently 85 patients registered and certified for cannabis in the entire state of West Virginia right now,” Freas said. “And they’re not really letting doctors market the service, and the state’s not really putting any money behind it, but this isn’t uncommon.”

Freas said that he’s not indicating that West Virginia is dropping the ball, but it creates a back-end concern when opening ten dispensaries and the patient count is low.

However, Bill Freas, Harvest Care Medical CEO and Dustin’s father said that the cannabis commission in West Virginia has been more supportive than any other state they’ve worked with. 

“They really want this to succeed,” Bill said. “They are working with the people that run the applications, and they’re very receptive, and because of that, I think it’s going to be a lot less pain to get to market.”

Aside from challenges, Freas and Kedia said they are excited to become part of the West Virginia market.

Kedia, who has been a physician for the last 20 years in Ohio, said his first-hand experience with the opioid epidemic was challenging. It initially led him to want to be part of the medical cannabis market in Ohio.

“I really felt then, and I feel even more strongly now, that cannabis and medical cannabis, specifically, is a fantastic alternative to our opioid and pain medication our patients depend on,” Kedia said. “And I do think having this alternative is better for patients and better for patients care, and most importantly, better for the quality of life. So, that’s where I get excited because I can now do what I did for patients in Ohio for patients in other states like West Virginia.”

Kedia’s number one goal with the expansion is to help people, he said. 

“Yes, we need to make money to keep places open, we all have bills to pay, our company has bills to pay, but all that aside, our primary focus has to be centered around patients and their well being, and that is more important to me than anything else,” he said.

And Freas and his father, Bill, have similar expectations and goals for Harvest Care Medical and West Virginia patients.

“Our number one goal is to get quality medical cannabis medicine to the residents of West Virginia as quickly and as effectively as possible,” Bill said. “West Virginia has a lot of challenges. One of the big ones is their opioid crisis. We believe that medical cannabis can be a real help. With all the data supporting it, we’re seeing a real difference in reducing the use of opioids and transitioning people, and we’re very committed to helping people.”

Published at Thu, 25 Feb 2021 18:40:00 +0000

Will These Marijuana Stocks Be Top Plays In 2021?

Will These Marijuana Stocks Be Top Plays In 2021?




Will These Marijuana Stocks Be Top Plays In 2021? | Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry.™

























Published at Thu, 25 Feb 2021 13:00:17 +0000

Cannabis and Hemp-Derived Products Subject to New Proposition 65 Warning Requirements in California

Cannabis and Hemp-Derived Products Subject to New Proposition 65 Warning Requirements in California

Despite operational hiccups stemming from the COVID-19 pandemic and supply chain shortages, Missouri Health & Wellness is working quickly to open five dispensary locations in the state’s medical cannabis market, which officially launched its first sales in October.

The company holds five retail licenses, which is the maximum number of licenses that any one company can have in Missouri’s market. Missouri Health & Wellness opened its first location in Washington at the end of November, and its second location in Sedalia just before Christmas. The company then opened a third dispensary in the state’s capital, Jefferson City, on Jan. 25. Now, Missouri Health & Wellness has its sights set on its final two stores in Kirksville and Belton, which will open by the end of the winter.

missouri health wellness

Photos courtesy of Missouri Health & Wellness

Missouri Health and Wellness: Washington, Mo.

The company is standing up its locations quickly, despite Missouri’s medical program experiencing delays due to the COVID-19 pandemic. Missouri Health & Wellness HR Director and Regional Manager Kathleen Beebe says it took a year and a half for the state’s first dispensaries to open after the state began issuing patient ID cards, but there has been a steady increase in the number of patients enrolling in the program.

“What’s most exciting is when you have patients walking in the door for the first time and you hear about … what they’ve been dealing with, and they’re so excited to have another option,” Beebe tells Cannabis Business Times and Cannabis Dispensary.

Most of Missouri Health & Wellness’ patients are 60 years old and older, she says, and many are first-time cannabis consumers who are frustrated with the results of traditional medicine.

“I think that’s the No. 1 thing that excites me most about this industry, is that we are bringing some relief to people,” Beebe says.

The company also strives to create a diverse and inclusive culture, she adds, where employees feel valued and can make meaningful contributions to the company and the patients they serve.

Missouri Health & Wellness’ budtenders (called “wellness specialists”) go through a robust training program to ensure they can have educated conversations with patients about cannabis, Beebe says.

As with many new markets, Missouri’s medical cannabis industry is currently experiencing supply chain shortages, especially in the wake of the ongoing pandemic, which Beebe says has delayed the launch of many cultivators and manufacturers.

“They’re still under construction,” she says. “We’re starting to now see more and more of them entering the market, but we just had our first manufacturer pass their final inspection maybe a few weeks ago now. Obviously, it takes a little while for them to ramp up their production.”

The COVID-19 pandemic has also further restricted Missouri Health & Wellness’ ability to promote itself within the communities it serves, as in-person, patient-facing events have been on hold. Traditional marketing channels, such as social media, are also challenging for the industry due to the various platforms’ restrictions on cannabis.

“Social media doesn’t really like us to talk too much about cannabis, so it limits what we’re able to do,” Beebe says. “We’re really trying to get creative, using our website more and texting. We do have a text service, but … the carriers will block certain messages. … We’ve hired a new marketing agency to help us start thinking outside the box to look at those ways that we can get out there, despite COVID and the marketing challenges that the industry has probably always had to face.”

To keep its staff and patients safe during the ongoing pandemic, Missouri Health & Wellness checks the temperatures of everyone upon entering the store, and provides hand sanitizer to its employees and customers.

Patients are asked to complete paperwork upon entering the store for the first time, and the staff sanitizes the clipboards and pens after each use. The dispensary’s registers are also sanitized in between each customer, and staff and patients are asked to wear masks while inside the store.

missouri health wellness

Photos courtesy of Missouri Health & Wellness

Missouri Health and Wellness: Sedalia, Mo.

Missouri Health & Wellness’ dispensaries sell flower packaged in eighths, as well as pre-rolls and edibles. The company started selling gummies and cannabis-infused beverages on New Year’s Eve, and Beebe says the dispensaries have seen an increase in business just by offering these two new product lines.

“We’re hearing that there are going to be some vape cartridges coming, and of course, there have been a lot of questions about concentrates,” she says. “I expect where we are today and where we’re going to be in two or three months is going to be dramatically different.”

Missouri issued 192 total dispensary licenses, and Beebe estimates that there are roughly 30 dispensaries currently open in the state.

“I expect that is also dramatically going to change in the next couple of months,” she says. “We’ll probably see the majority of them coming online, so what you see in this market today is going to look dramatically different in the next few months, between an increase in supply and an increase in the number of dispensaries that are open.”

Missouri Health & Wellness will continue to differentiate itself in the rapidly growing market through its friendly and supportive wellness specialists, Beebe says.

“I really stress to the team that it’s important to be respectful to each other,” she says. “Obviously, when that patient walks through the door, be mindful that they are dealing with something. They may be cranky because they’re not feeling well, and they need some help. That’s where we come in to support them, whether that’s sitting down and helping them figure out how to find their patient card online because it can be a little tricky to do that, or just having a conversation with them that you can relate [to]. … Customer service, to me, is going to be what really helps us stand out.”

Patient education is also a key differentiator for the company, Beebe adds. Many of Missouri Health & Wellness’ team members come from working in other states’ cannabis programs, which provides them with diverse cannabis knowledge to help support the company’s patients.

“We’re hearing a lot that we have a little bit of an uphill battle with breaking the stigma,” Beebe says. “It’s not like it’s unique to Missouri, but the fact that we’re a little bit more conservative state, we do know there are people who don’t support cannabis, so we’re helping to bring a professional tone to the industry. … You’re going to walk in and be treated like a patient, and your privacy is important. Having that professional customer service and taking care of the patient is ultimately where I see us focusing our attentions and breaking that stigma.”

Published at Mon, 22 Feb 2021 21:00:00 +0000

Marijuana Stocks To Watch This Upcoming Week

Marijuana Stocks To Watch This Upcoming Week




Marijuana Stocks To Watch This Upcoming Week | Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry.™

























Published at Sun, 21 Feb 2021 18:00:35 +0000

2 Marijuana Stocks To Invest In Right Now? One Forecast To Gain 232% According To Analysts

2 Marijuana Stocks To Invest In Right Now? One Forecast To Gain 232% According To Analysts




2 Marijuana Stocks To Invest In Right Now? One Forecast To Gain 232% According To Analysts | Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry.™

























Published at Thu, 18 Feb 2021 21:49:14 +0000

Tilray Inc. Receives Double Downgrades Following A Lackluster Earnings Report

Tilray Inc. Receives Double Downgrades Following A Lackluster Earnings Report

Although Tilray Inc. (TLRY) reported strong fourth quarter financials and recorded a more than 20% increase in revenue when compared to the same period last year, broker-dealers have not responded as favorably as we anticipated.

Following the earnings report, Tilray was downgraded by two broker-dealers and we found this to be worth highlighting. Piper Sandler is one of the broker-dealers that downgraded Tilray and we found the price target increase on Tilray by Piper Sandler to be interesting.

While Benchmark simply cut its rating on Tilray from Buy to Hold, Piper Sandler also lowered its rating Buy to Hold and raised the price target to $26 from $15. We believe that Piper Sandler wanted its price target to be closer to the range that Tilray is trading in and are not overly surprised by the price target hike.

During the quarter, Tilray recorded a $3 million net loss on $56.6 million of revenue. For the entire year, the Canadian cannabis producer had a $10 million net loss on $210 million of revenue.

The primary reason for the increase in quarterly revenue is related to the international medical cannabis market as well as the Canadian recreational market. Tilray recognized a significant decline in the amount of revenue it has generated from hemp and attributed the drop to a shift to private label product with a large customer as well as the impact of COVID-related changes to consumer shopping patterns.

When compared to the prior quarter, Tilray recognized a 10% increase in revenue. The increase was primarily related to the leverage that it has to strategic international medical cannabis markets and the Canadian recreational market. We are bullish on the trend and expect the merger with Aphria (APHA.TO) (APHA) will make the combined company the largest cannabis company in the world.

Tilray is trading higher in the pre-market and this is an opportunity that we are closely following. If you are interested in learning more about Tilray and Aphria, please send an email to support@technical420.com with the subject “Tilray and Aphria” to be added to our distribution list.

Share

Share - Facebook


Share - Twitter

Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Thu, 18 Feb 2021 12:24:54 +0000

Sundial Growers Inc.(SNDL) and Indiva Announce $22 Million Strategic Investment

Sundial Growers Inc.(SNDL) and Indiva Announce $22 Million Strategic Investment




Sundial Growers Inc.(SNDL) and Indiva Announce $22 Million Strategic Investment | Marijuana Stocks | Cannabis Investments and News. Roots of a Budding Industry.™

























Published at Tue, 16 Feb 2021 13:57:13 +0000

Aurora Cannabis Gets Price Targets Slashed After Lackluster Q2 Earnings Release

Aurora Cannabis Gets Price Targets Slashed After Lackluster Q2 Earnings Release

Last week, Aurora Cannabis Inc. (ACB.TO) (ACB) released second quarter financial results and the market responded negatively to the numbers.

Following the earnings report, several leading Canadian and US broker-dealers responded with the following:

  1. ATB Capital Markets raised its price target to $13 from $10.50 (CAD)
  2. MKM Partners changed its rating to Sell from Hold
  3. Canaccord Genuity raised its price target to $14 from $11 (CAD)
  4. Stifel raised its price target to $7.8 from $6.50 (CAD)

During the second quarter, Aurora Cannabis recorded a more than $290 million net loss on $70 million of revenue. The company reported a Adjusted EBITDA loss of $16.8 million and the amount included termination and restructuring costs. Most of the net loss is related to non-cash items and we will monitor how Aurora Cannabis’ numbers move from here.

An important metric to highlight from the second quarter is the adjusted gross margin. During the quarter, Aurora Cannabis recorded a 6% decline in margins when compared to the same period last year. The decrease is the result of a reduction in production levels at Aurora Sky which caused there to be an increase in cash cost of sales due to the under-utilization of capacity at the facility.

For the last year, Aurora Cannabis has talked a lot about rightsizing the operation and closing production facilities across the world. Clearly Aurora Cannabis’ rightsizing process is taking longer than expected and we look forward to the day the management team announces that they have completed the process.

In the near-term, we expect Aurora Cannabis to remain challenged and will monitor how it impacts the performance of the brand. The company recently announced a financing agreement and we believe the resources will be key for enhancing the company’s footprint in strategic markets (Canada, the US, the EU, and Latin America).

As of February 10th,  Aurora Cannabis reported to have approximately $565 million of cash on hand. The company continues to focus on improving operational flexibility and expects this project to be a positive for cash flow. Of the four cultivation facilities that Aurora Cannabis plans to close, three are fully shuttered and we will monitor how the management team continues to execute on this.

During the last month Aurora Cannabis has seen its stock price surge higher and it is currently trading above the price target levels that were reported by broker-dealers (highlighted in the beginning of the story). Going forward, we are cautious with Aurora Cannabis and this is due to the volatility that is associated with the trend.

If you are interested in learning more about Aurora Cannabis, please send an email to support@technical420.com with the subject “Aurora Cannabis” to be added to our distribution list.

Share

Share - Facebook


Share - Twitter

Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

Published at Fri, 12 Feb 2021 14:29:37 +0000