Staff
It’s time for your Daily Hit of cannabis financial news for January 3, 2022.
On The Site
Ascend
Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) has reported that MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) is trying to back out of the deal between the two companies. Ascend said that MedMen is challenging and disregarding the determination of the Office of Cannabis Management and the Cannabis Control Board of the State of New York which approved the transaction. MedMen had initially requested the New York State regulators approve the transaction in March 2021. Ascend said last week that New York had given its approval and that the company intended to close the transaction soon after. Now MedMen is disputing the NY Office of Cannabis Management regulatory approval, is refusing to close, and is attempting to terminate the transaction.
Hemp
Hemp prices remain depressed causing hemp farmers to decide against planting crops for 2022. Hemp Benchmarks reported that December pricing for hemp crops remained in the doldrums as past overproduction led to too much supply and not enough buyers. Despite some promising end markets, the demand just isn’t enough for the farmers to take the chance. In addition to the low prices and oversupply, the hemp market is also facing supply chain issues like increased trucking costs. Plus, other crops like corn and soybeans have experienced price increases prompting some farmers to abandon hemp. There are big hopes for industrial hemp fiber, but that market is also hobbled by a lack of processing facilities and a lack of industry standards. There are no government guidelines for hemp fibers like there are for say cotton, which has had standards defined since 1918.
GTI
There was no rest for the M&A department at Green Thumb Industries Inc. (GTI) (CSE: GTII) (OTCQX: GTBIF) during the holidays. The company announced last week that it closed on an acquisition of Minnesota-based LeafLine Industries. As one of only two licensed cultivators in the Minnesota medical cannabis market, LeafLine is licensed to grow, process, and dispense cannabis directly to patients. While Minnesota began medical cannabis sales in 2015, the state has been slow to expand its program with only about 29,000 registered active patients according to the Minnesota Department of Health. The state has reported that over 56,000 patients have been approved to date, but many don’t seem to be active in the program. The state currently has 17 qualifying conditions, including chronic pain, multiple sclerosis, post-traumatic stress disorder and seizures. There are only 1,291 approved caregivers. Products available include vape, tinctures and topicals, with flower and edibles coming later in 2022.
In Other News
AFC Gamma
AFC Gamma, Inc. (Nasdaq: AFCG)reported that for the quarter ended December 31, 2021, the company’s gross funding was $125.6 million, and its net funding, taking into account loan repayments and amortization, was $120.6 million. In total, AFC Gamma closed on total new commitments of $127.3 million during the quarter. The company also announced that it has launched an underwritten public offering of 3,000,000 shares of its common stock. AFC Gamma intends to grant the underwriters of the Offering a 30-day option to purchase up to an additional 450,000 shares of common stock. AFC Gamma intends to use the net proceeds from the Offering to fund loans related to unfunded commitments to its existing borrowers, to originate and participate in commercial loans to companies operating in the cannabis industry that are consistent with its investment strategy, and for working capital and other general corporate purposes.
Verano
Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF) announced the appointment of Brett Summerer as Chief Financial Officer. Summerer assumes the role previously held by Brian Ward, who will continue to serve as an advisor during the transition period before departing Verano.
