Kaitlin Domangue
It’s time for your Daily Hit of cannabis financial news for January 30th, 2020.
On the Site
CLS Nevada Projects 2020 Revenue Of $17 Million
CLS Holdings USA, Inc (OTCQB: CLSH)(CSE: CLSH) released its 2019 calendar year-end statement for CLS Nevada, not long after the company reported its quarterly earnings on January 14. The company said in a statement that it was “forecasting CLS Nevada 2020 revenue of $17 million and positive EBITDA of $4 million.” The company will need to hustle if it wants to hit that $17 million goal. CLS said that it plans to increase sales by 100% at City Trees by eliminating low return on investment SKUs, re-branding and increasing visibility through better marketing channels. That includes expanding the Oasis Cannabis parking lot and vault to allow it to efficiently serve 1250 customers a day. The company also wants to create new revenue streams by offering advertising opportunities to brands and partners.
High Times Tells Shareholders It Needs More Capital
It’s been a tumultuous two months for venerable cannabis publisher High Times following an equally bumpy road to going public. On Wednesday, Chairman Adam Levine sent a letter to shareholders of the private company stating that it would once again extend its fundraising campaign and abandon its efforts to list on the NASDAQ Marketsite Exchange (NASDAQ: NDAQ).
The latest extended offering will terminate on the first to occur of either the date on which all 4,545,454 shares are sold or March 31, 2020. These shares though are priced back at $11 with the goal of raising another $5 million. According to the most recent corporate presentation, High Times had 32,460, 313 issued shares and if all were valued at $11, that is a $357 million market cap. The company’s current total liabilities are $68 million.
The First Historically Black College Is Launching A CBD Line
The Southern University Agricultural Research and Extension Center in Baton Rouge, Louisiana, along with its partner Ilera Holistic Healthcare is launching a CBD product line called ALAFIA. Southern is the first HBCU (Historically Black College University) to start its own CBD product line that is available for sale at dispensaries and other retail locations.
“Southern has been a leader in agriculture and the sciences for 140 years while staying true to its mission of access,” said Ray Belton, the president of the Southern University System. “This CBD venture with Ilera encompasses all of that.”
Hemp Glut Causing Prices To Drop, Unsold Harvests
Hemp Benchmarks report for January was published on Wednesday at the Hemp Benchmarks website. Founder Jonathan Rubin noted that wholesale hemp markets continue to face significant challenges, including oversupply and declining prices.
The report stated, “We have in previous reports emphasized the current glut of biomass on the market, which has led to farmers being unable to move their harvests. Such market conditions continued in January, with numerous members of our Price Contributor Network reporting that relatively little buying and selling of biomass was taking place. Transactions that were reported showed high-CBD biomass prices continuing to sink, with the assessed rate for transactions of over 1 million pounds down 53% from last month.
In Other News
Two Kentucky Hemp Companies Facing Bankruptcy
Two companies are facing financial trouble as GenCanna has had three separate creditors try and force the company to declare bankruptcy. The three creditors are owed $50,000 collectively. Separately, Sunstrand owner William “Trey” Riddle filed for Chapter 7 bankruptcy in a Louisville court.
A creditors’ meeting is scheduled for February 6th in Louisville, KY.
