Investor Ideas #Potcasts 570, #Cannabis News and #Stocks on the Move; (TSXV: $NRTH.V) (TSX: $WEED.TO) (NASDAQ: $CGC) (TSX: $HEXO.TO) (NYSE: $HEXO) (OTCQB: $DIGP)
Delta, Kelowna, BC, June 1, 2021 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today’s podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Today’s podcast overview/transcript:
Good afternoon and welcome to another episode of Investorideas.com "Potcast" featuring cannabis news, stocks to watch as well as insights from thought leaders and experts.
In today’s podcast we look at a few public company announcements.
48North Cannabis Corp. (TSXV: NRTH), a brand-led, vertically integrated Licensed Producer focused on manufacturing an expansive portfolio of high quality, accessibly priced products available across the country, has released its financial and operating results for the third quarter ended March 31, 2021. The Company's financial statements and related management discussion and analysis for the period are available on the Company's SEDAR profile at www.sedar.com and on the Company's website at www.48nrth.com/investors.
Financial and Operating Highlights for Fiscal Q3 2021
● On May 17, 2021, the Company and Hexo Corp. ("Hexo") entered into a definitive arrangement agreement whereby Hexo will acquire all of 48North's issued and outstanding common shares in an all-share transaction valued at approximately $50 million on an enterprise value basis.
● Quarterly revenue of $5.2 million, representing a 94 per cent year-over-year increase over third quarter 2020 revenues of $2.6 million.
● Adjusted EBITDA1 loss for the quarter was $7.7 million compared to a loss of $6 million in Q3 2020.
● Closed on April 16, 2021 an overnight marketed public offering for total gross proceeds of approximately $5.4 million.
● The Company launched seven new SKUs during the quarter and the SKUs have experienced high-demand from both retailers and consumers.
● Ceased operations at its "Good:Farm" outdoor cultivation facility.
1 Adjusted EBITDA is a Non-IFRS financial measures. Refer to the Non-IFRS Measures section in the MD&A for the definition.
"Our strategy of putting consumers first, working hand in glove with wholesalers and retailers to commercialize our products, and investing in a leading supply chain means 48North is in a strong position for the future" said Charles Vennat, CEO of 48North. "The combination with Hexo should deliver meaningful synergies that are beneficial to our shareholders, customers, partners, and stakeholders."
HEXO Corp. (TSX: HEXO) (NYSE: HEXO) and Zenabis Global Inc. (TSX: ZENA) announced that they have completed the previously announced arrangement, pursuant to which HEXO has acquired all of the issued and outstanding common shares of Zenabis by way of a plan of arrangement under the Business Corporations Act (British Columbia).
"Today is another great day for HEXO," said HEXO CEO and co-founder Sebastien St-Louis. "With the acquisition of Zenabis, we are actively positioning HEXO for future expansion in Canada, Europe and beyond. This deal will strengthen our domestic brands, offer a foothold in Europe and provide significant accretive synergies as we continue towards our goal of becoming EPS positive and a top-three global cannabis products company."
Under the terms of the Arrangement, each former Zenabis shareholder is now entitled to receive 0.01772 of a common share in the capital of HEXO (each whole share, a "HEXO Share") for each Zenabis Share held immediately prior to the Arrangement (the "Consideration"). It is anticipated that the Zenabis Shares will be de-listed from the Toronto Stock Exchange (the "TSX") as of the close of trading on or about June 2, 2021.
In order to receive the Consideration, registered holders of Zenabis Shares will be required to deposit their share certificate(s) representing Zenabis Shares, together with a duly completed letter of transmittal, with TSX Trust Company, the depositary under the Arrangement. Shareholders whose Zenabis Shares are registered in the name of a broker, dealer, bank, trust company or other nominee should contact their nominee regarding the receipt of the Consideration.
Further information about the Arrangement is set forth in the materials prepared by Zenabis in respect of the special meeting of Zenabis shareholders held on May 13, 2021 (the "Meeting"), which were mailed to Zenabis shareholders and filed under Zenabis' profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) today announced its financial results for the fourth quarter and Fiscal Year 2021 ended March 31, 2021. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
"During Fiscal 2021, Canopy Growth transformed into a CPG-modelled organization, reinforcing a foundation for sustained growth and long-term success. By leveraging consumer insights and innovation to deliver best-in-class products, Canopy Growth is positioned to achieve our goal of unleashing the power of cannabis to improve lives," said David Klein, CEO, Canopy Growth. "We are starting to see strong momentum across all of our key businesses and remain firmly focused on capitalizing on U.S. opportunities in Fiscal 2022."
"We made tremendous progress improving our supply chain and right-sizing our manufacturing footprint, bringing supply and demand into balance," added Mike Lee, CFO. "Our cost savings program is on track to deliver $150-$200 million of savings within the next 18 months, and we remain committed to our path to profitability by the end of Fiscal 2022, while continuing to invest in an organization that is focused on insights, innovation and gaining momentum in the U.S. market."
Some of the Fourth Quarter and Fiscal Year 2021 Business & Operational Highlights included:
● Canopy Growth continues to build momentum across its key product lines in Canada:
○ In Flower, the Company maintained #1 market share in the total flower category in Canadian recreational market during Q4 2021, capturing over 19% share of the market. Twd. exited FY 2021 as the #1 flower brand in Canada, with the brand capturing 6 out of top 10 SKUs. During Q4 2021, the Company's premium flower brands combined to capture a leading 10.9% share of the premium flower segment in Canada. The Company launched its first Quebec-exclusive brand, Vert, supported by multiple Quebec-grown strains, Green Cush and Sour Kush, and Tweed lineage-strain named flower products in Ontario during Q4 2021.
○ In Vapes, the Company strengthened its positioning in the Canadian vape market with the transition to 0.5 ml 510 cartridges during Q4 2021. The addition of Ace Valley vape products to the Company's portfolio allows Canopy to immediately capture the #3 market share for vapes in Canada and the #1 market share for all-in-one vapes in Q4 FY 2021.
○ In Beverages, The Company launched a portfolio of THC beverages in the Canadian recreational cannabis market during FY 2021, capturing 35% dollar share of the total beverage category during the full year. Canopy Growth launched Quatreau CBD beverages in Canada in Q3 2021 and captured #1 market share in Canada since launch. In Q1 2022, Canopy has expanded its portfolio of THC beverages with Tweed Iced Tea beverages (available in lemon and raspberry flavors, both with 5 mg THC) now shipping.
○ In Edibles, the Company launched Twd. Strawberry gummies in Ontario in Q4 2021 with nationwide distribution rolling out in Q1 2022.
○ The acquisition of Ace Valley and the planned acquisition of Supreme Cannabis are expected to solidify Canopy's leadership in the Canadian recreational market, with the pro-forma market share of 18.1 % in Q4 2021, based on Canopy's internal market share data.
Digipath, Inc. (OTCQB: DIGP), a service-oriented independent analytical testing laboratory company focused on the cannabis and hemp markets, announced today that it has entered into a purchase agreement to acquire a full suite of cannabis and hemp laboratory testing equipment, with plans to have a lab operational in the Coachella Valley of California as soon as the end of this calendar year.
Todd Denkin, Digipath Founder, said, “We are delighted to be launching our strategy to become a multi-state operator (MSO) of cannabis testing labs. We have recently entered into an agreement to purchase critical testing equipment for the lab we are preparing to open in California. Nevada started with very strict mandatory testing regulations, and now California has built on that, which serves as the model for most other states. We expect to leverage our experience in Nevada to help us launch our California operations.”
According to a report by leading industry researchers, Arcview Market Research and BDS Analytics, California is the largest legal cannabis market in the world; and the state’s residents are the 3rd largest consumers of cannabis in the world. California requires all cannabis products to receive a Certificate of Analysis from a state-licensed testing lab prior to distribution, making California’s testing market the fastest-growing segment within the cannabis industry.
California’s Bureau of Cannabis Control (BCC) estimates that over 100 Certified Analytical Testing Labs are needed to meet current demand in the state. As of last year, only 35 such certified labs were operating in California (down from a peak of 62 in 2019). The result is a severe shortfall of laboratory capacity in California, the nation’s largest cannabis market.
“We have positioned Digipath as a premium laboratory brand built upon established best practices in science, service and customer care. This approach differentiates Digipath from the vast majority of existing testing labs in the cannabis market,” said Bruce Raben, Digipath Chairman. “With our first profitable quarter just completed and the Covid -19 pandemic mostly behind us, we believe we are well positioned to begin to execute our MSO strategy, taking advantage of economies of scale within a soaring cannabis market.”
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