Author: Video Staff

We’re getting closer to the holidays but the news keeps rolling in. This week we learned that Dutchie founders brothers Ross and Zachary Lipson are suing the company. In November it was reported that they left the company, but neither contributed a quote to the press release. Now the two say they were improperly kicked out of the company by the current board and are insisting they are still directors and officers of the company. They claim they were ambushed at the November board meeting during a board coup. The court documents are sealed but we’ll keep trying to get more information on this. 

We also got a few earnings announcements this week. 

Fire & Flower announced its fiscal 2022 third-quarter revenue increased 8% sequentially to $43.8 million from $40.7 million. However, revenue fell by 3% from $45.4 million for last year’s third quarter. Fire & Flower delivered a net loss of $28.1 million in the quarter.

HEXO Corp. (TSX: HEXO) (Nasdaq: HEXO) posted earnings that beat revenue expectations as restructuring acrobatics over the past year continue to play out for the company. The Canadian producer reported its financial results for the first quarter with a net of C$35.8 million, down 29% versus C$50.2 million in the same period last year, and sequentially down 16% versus C$42.5 million in the previous quarter. The company said that the decline was attributable in part to “the timing of revenue recognition as certain shipments failed to reach their destination due to severe weather towards the period end.” HEXO cited other challenges stemming from that, such as shortages and trimmed purchase orders “as the company continues to implement its revised demand planning process.”

Grown Rogue International Inc. (CSE: GRIN) (OTC: GRUSF) posted temperate earnings results that show rising revenue and positive free cash flow. Grown Rogue posted revenue of $5.07 million, a 35% rise versus $3.76 million in the fourth quarter last year. It also improved over the previous quarter’s revenue of $4.2 million. 

California-based plant therapeutic wellness brand and certified B Corp. company Prima, is buying Prospect Farms for an undisclosed amount. The combination will be called Uplifter Brands, PBC, and billed as “a next-gen CPG house of clean and conscious brands across personal care, supplements, spa and hospitality, private label, and pet wellness.” Prospect Farms is known for its relationship with high-end gyms and spas like Equinox, Exhale Spa, Castle Hot Springs, and Cowshed at Soho House. While Prima brings national distribution at Sephora and The Vitamin Shoppe to the table.

Green Market Report published a great story this week that did a deep dive into the prices of legal recreational cannabis across New York. They will likely be at least twice as much as marijuana sold by unlicensed dealers and smoke shops, which will lead to a struggle for survival for much of the industry, according to a white paper authored by a pair of tax attorneys.

The paper calculated that the average price of a legal eighth of cannabis flower in New York state with 30% THC will cost $75.53, when all taxes are factored in. By contrast, last week we found multiple easily accessible dealers in New York City who were already offering eighths of marijuana flower for $10-$45.

Green Market Report has a new morning newsletter called the Rise. Head over to the website under the subscriptions tab and sign up now. 

This week the country voted on several cannabis issues. Three states rejected the ballot measures before them and they were Arkansas, South Dakota, and North Dakota. 

However, Maryland (65.5%) and Missouri (53.1%) both approved adult-use cannabis. There were alot of nervous people in New York when it was feared that anti-cannabis Republican Lee Zeldin could win, but cannabis-friendly Kathy Hochul went on to win and become the first elected female governor in the state.

Earnings season is upon us and most companies have struggled through massive headwinds to deliver. 

WM Technology Inc. or Weedmaps (Nasdaq: MAPS) posted a $10.5 million loss in the third quarter this year – a drastic downturn from a year ago. That news was accompanied by the departure of longtime CEO Chris Beals. Revenues for the quarter held relatively steady at $50.5 million compared with $50.9 million for the previous-year period. The company said it expects a year-over-year decline in the low double-digit percentage area for fourth quarter revenue.

Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) posted mixed results Monday as the company met revenue expectations, despite seeing lower operational margins and rising net losses. Curaleaf eked out past expectations and delivered $340 million during the period. Curaleaf also reported a second-quarter net loss of $54.7 million compared with a net loss of $28.2 million in the second quarter.

Florida-based multistate operator Trulieve (CSE: TRUL) (OTCQX: TCNNF) announced a $115 million loss for the third quarter this year. Revenue increased to $301 million from last year’s $224 million but fell 6% from the second quarter of this year.

Ayr Wellness’s second-quarter revenue rose 24% to $119 million over last year’s revenue of $96 million and an increase of 8.6% sequentially. Despite expected price compression Ayr believes it will see 10% growth in the next quarter.

High Times is buying cannabis company Moxie Holdings in an all stock deal. High Times stock though doesn’t sell and the company is currently in default on its debt. Likewise, Moxie has attempted to go public twice and both times it wasn’t successful. Moxie is also involved in a lawsuit over not paying its debt as well. 

That’s it for this week. We’ll see you next week in Vegas at the MJ Biz conference.

This week the New York group tasked with raising funds for the social equity applicants saw their contract canceled. The group apparently had investment interests in companies that were applying for licenses. It’s yet another setback for the New York program that has struggled to keep the ambitious justice program moving forward.

Also in New York this week, regulators rolled back the stringent requirements for cannabis testing after cultivators said they would likely not pass with the previous measures. 

Earnings season is kicking off with Green Thumb Industries (OTC: GTBIF) posting positive results that beat analysts’ expectations, with record revenue showing the demand for cannabis even as profits shrink industrywide. Green Thumb reported third-quarter revenue of $261.2 million, up 2.7% sequentially and up 11.8% from the prior-year period. 

The Scotts Miracle-Gro Company (NYSE: SMG) announced that sales fell by 33% in the fourth quarter to $493.6 million reflecting decreases in both major business segments.  The hydroponic division of Hawthorne saw its sales decline by 49% to $168.5 million, compared with $329.1 million during the same period last year.

Innovative Industrial Properties Inc. (NYSE: IIPR) pulled in revenue of almost $71 million in the third quarter of 2022, with a net income of $37.3 million, but its stock price continues to suffer along with much of the cannabis industry. Revenue was up 32% from the same period in 2021, IIPR reported, though it did run into some issues with rent collection by a pair of tenants in California.

Hexo reported fourth-quarter net revenue of $42.5 million, an increase of 10% compared to $38.8 million in the 2021 fourth quarter. net revenue for the full year was $191.1 million,   The net loss for the full year was an eye-popping $1 billion versus last year’s net loss of $115 million.

And finally this week HighTimes Holding Corp. is suing the people it bought the High Times Magazine from, saying the former owners lied during negotiations, which caused damages in excess of $10 million. This complaint was filed on Oct. 27, a day after HighTimes Holding Corp.’s deadline for signing an investment agreement that would’ve bailed the company out of its financial predicament. Part of the HighTimes financial pressure was due to the money it owed on the original purchase of the magazine. For now, it’s unknown whether this case will work as a delay tactic for the money owed to its lender. High Times has until November 15 to make payments to satisfy its debt holders.