Staff
It’s time for your Daily Hit of cannabis financial news for September 17, 2020.
On the Site
MedMen
MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) waiting until the market closed on Wednesday before telling shareholders it picked up another $20 million from lenders and institutional investors. The deal for MedMen includes 10 million in gross proceeds under a new unsecured convertible facility, plus $5.7 million under its senior secured term loan led by Stable Road Capital and $5 million under its senior secured convertible facility led by Gotham Green Partners.
Just what will this cost? It’s not too far from getting an extremely big credit card. The principal amount of the Incremental Notes will carry an interest rate of 18.0% per annum, to be paid as follows: (a) 12.0% shall be paid in cash monthly in arrears; and (b) 6.0% shall accrue monthly to the outstanding principal as payment-in-kind.
Vermont
This week Vermont’s House and Senate negotiators reached a final agreement on S. 54, which is legislation that would legalize, regulate, and tax cannabis sales. The state had initially legalized cannabis but didn’t make sales of the product legal. This had the effect of decriminalization but also left the market in a grey zone of uncertainty. Only two states took the route of legalizing cannabis but making sales illegal.
The next step is for the legislation to get a final vote from both the House and Senate and then if it passes, which is expected, it will go to Governor Phil Scott to sign. The Governor has not expressed whether he will sign it or not. However, a recent poll conducted by Public Policy Polling and commissioned by the Marijuana Policy Project showed that 76% of voters in the state approve of creating a legal cannabis market.
In Other News
The House will postpone the much-anticipated vote on HR 3884: The Marijuana Opportunity, Reinvestment, and Expungement Act, commonly referred to as the MORE Act.
NORML Political Director Justin Strekal said, “This delay by the House does not change the fact that the overwhelming majority of voters support ending the federal prohibition of cannabis, including majorities of Democrats, Independents, and Republicans. It is expected that the vote will be rescheduled in November.
Colorado
Colorado Department of Revenue’s Marijuana Enforcement Division (MED) released its 2020 mid-year update for January 1 to June 30, which covers much of the period when Colorado has been greatly affected by COVID-19.
Some key findings in this year’s update include:
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76% of the 80 new business licenses in the first half of 2020 were adult-use business licenses.
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The number of total marijuana business licenses stayed steady over these six months, maintaining about 2,700 licenses total.
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The percentage of occupational employee two-year license renewals hovered in the low 30s, with a high of 34.2% in June and a low of 30.1% in April.
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The average life cycle of a marijuana plant harvested as of June 30, 2020 was 125 days.
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Adult-use plants accounted for approximately 73% of the total plants cultivated in Colorado during the months of January to June.
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1,332,434 plants were being cultivated on the last day of the month in June 2020.
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Once again, Denver, Pueblo, El Paso and Boulder Counties had the highest number of plants cultivated each month.
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Adult-use marijuana continues to outpace medical marijuana in terms of volume sold to consumers. Specifically:
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63% of the pounds of flower/bud sold
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88% of the units of edibles sold
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86% of the units of non-edible infused products sold
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65% of the pounds of concentrate sold
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84% of the units of concentrates sold
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Percentage of non-qualified sales check investigations (underage compliance checks) where licensees passed was 97%.
