Investor Ideas #Potcasts; #Cannabis News and #Stocks on the Move; (CSE: $JUSH.C) (OTCXQ: $JUSHF) (CSE: $CURA.C) (OTCQX: $CURLF), (TSXV: $JWCA.V) (OTCQX: $JWCAF)
Delta, Kelowna, BC, February 24, 2020 (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.
Listen to the podcast:
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 announcements.
But first, Cannabis Benchmarks®, a division of New Leaf Data Services, LLC, announced the listing of three Canada Cannabis Spot Indexes (CBMKCCSI, CBMKCNLP, and CBMKETAX), the first cannabis indexes that benchmark the wholesale price of cannabis paid to Canadian Licensed Producers, supporting price discovery and ultimately enabling the creation of tradable financial instruments.
The indexes are calculated weekly using a proprietary cannabis index methodology developed by Cannabis Benchmarks®.
● Value is determined by the simple average of assessed wholesale transactions for non-medical dry cannabis flower.
● The indexes are a representation of the average wholesale price paid across all provinces, both including and excluding all excise taxes.
● Cannabis Benchmarks' methodology includes working directly with market participants from both the supply and demand sides, including analysis of public and private data, to assess the average wholesale price paid each week.
These reference price benchmarks provide critical pricing data that support decision making
related to buying and selling at fair market price, asset and equity valuation, compliance with accounting standards, and commodity hedging and risk management.
Cannabis Benchmarks® is disseminating this index data through Nasdaq's GIDS service to aid in providing maximum transparency to the marketplace. GIDS provides data recipients, either directly or through a third-party distributor, the opportunity to reduce network, administrative and data center costs by taking one data feed, rather than many.
"Since the Canadian adult use market opened in October 2018, industry participants - including cultivators, processors, retailers, investors and debt and equity analysts - have been seeking price transparency to analyze and navigate a dynamic market currently characterized by swiftly changing market fundamentals," said Jonathan Rubin, CEO of NLDS. "We are pleased to be using Nasdaq's GIDS to offer the market an independent reference benchmark to support strategic, operational and investment related decisions."
"The Cannabis Benchmarks® Indexes are a breakthrough for market participants in need of fair and transparent price benchmarks to better understand this emerging commodity" said Rubin. "These indexes will become increasingly important to physical and financial industry participants as legal cannabis markets expand the need for trading and risk management."
Jushi Holdings Inc. (CSE: JUSH) (OTCXQ: JUSHF) a globally-focused, multi-state cannabis and hemp operator, announced that its wholly owned subsidiary, Jushi Inc, has closed on its previously announced acquisition of the remaining 25% interest in TGS Illinois Holdings, LLC ("TGSIH"). Jushi Inc now owns 100% of TGSIH, which through its operating subsidiary, TGS Illinois, LLC, owns and operates two cannabis dispensaries – one in Sauget, IL and one in Normal, IL. Each dispensary is eligible to seek approval from the Illinois Department of Financial & Professional Regulation ("IDFPR") to become an adult-use dispensary and to open a second retail location.
"We remain encouraged by the strength of demand in Illinois as evidenced by the State's announcement that total cannabis adult-use sales during its first month of legalization generated nearly $40 million in revenue. The recent adult-use legalization in Illinois has brought increased consumer demand to this previously medical only state. We believe that the Illinois market is at an inflection point, and that this acquisition positions Jushi for significant growth and market share gains," commented Jim Cacioppo, Chairman and Chief Executive Officer of Jushi. "Jushi remains focused on expanding and building out its footprint in limited license states such as Illinois and Pennsylvania, two states in which we have confidence in their sustained market growth opportunity."
The two existing dispensary locations currently operate as The Green Solution but will transition to BEYOND/HELLO branding during the year, and are located at 2021 Goose Lake Road, Sauget, IL 62206 and 501 West Northtown Road, Normal, IL 61761.
Since Illinois's adult-use legalization went into effect January 1, 2020, the Sauget, IL dispensary was approved by the IDFPR to conduct adult-use sales. The Normal, IL dispensary is eligible and will seek similar IDFPR approval for adult-use sales. The Company also plans to exercise its option to expand from two to four dispensaries, subject to regulatory approval. The Company plans to commence adult-use sales at both locations following pre-commencement preparations and completion of outstanding regulatory approval.
James E. Wagner Cultivation Corporation (TSXV: JWCA) (OTCQX: JWCAF), a premium cannabis brand focused on producing clean, consistent cannabis grown using its advanced and proprietary GrowthSTORM™ aeroponic platform, reported financial results for its fiscal first quarter ended December 31, 2019. Dollar amounts are in Canadian dollars.
Fiscal Q1 2020 Corporate Highlights
● Received licensing amendment from Health Canada to double JWC2’s licensed production capacity to 44,500 square feet, which would be an annualized production capacity of more than 9,000 kilos of dried cannabis.
● Average yield per plant increased to 262 grams in the first quarter of 2020, versus the average yield of 210 in the same year-ago period.
● Launched plans to open a 2,000 square farm gate retail store adjoining the company’s JWC2 flagship facility, representing a new direct-to-consumer sales channel for the company. The store is anticipated to be the Waterloo region’s first retail cannabis store located on a licensed cultivation site, and will serve the area’s 500,000 inhabitants. In January, the company submitted a cannabis retail operator license application to the Alcohol and Gaming Commission of Ontario.
● Received a license amendment from Health Canada for the sale and production of cannabis extracts, edibles and topicals at the company’s JWC1 facility, allowing JWC to add kief, rosins, and pre-rolls in various quantity formats to its product portfolio.
● Introduced four new cannabis strains grown using the company’s advanced GrowthSTORM™ aeroponic platform: King Tut, Dark Helmet, West Coast Sour Diesel, and Hash Plant.
● Engaged Kindred Partners to serve as the exclusive broker for JWC adult-use cannabis products in Canada.
● Entered a supply and manufacturing agreement with CannaCure Corporation, a wholly-owned subsidiary of Heritage Cannabis Holdings, whereby CannaCure formulates and fills JWC’s vape cartridges, for both recreational and medical cannabis markets.
● Began collaboration and research trial with Fluence Bioengineering for the performance testing of Fluence’s VYPR 2p Broad Spectrum LED lighting solution. The trial will assess if the lighting solution can further improve JWC’s already high level of energy efficiency and help to further optimize cultivation performance.
Financial Highlights
● Revenues totaled $264,000 in fiscal Q1 2020, down 74% sequentially from $1,025,000 in fiscal Q4 2019, and compared to $550,000 in fiscal Q1 2019. The decline in revenue was due primarily to management’s response to market conditions and the strategic decision to defer sales to the second quarter to maximize the revenue potential and gross margin of produced goods. This decision was reflected in Unrealized Fair Value on Finished Goods in the amount of $2.4 million, as compared to none at the end of the previous quarter.
● Loss and comprehensive loss for fiscal Q1 reduced 48% to $1.2 million or $(0.01) per share.
● Gross margin totaled $1.8 million, compared to $3,000 in in the same year-ago quarter.
● Operating expenses in fiscal Q1 2020 were $2.5 million, a 46% decrease from fiscal Q4 2019, and a 5% increase from fiscal Q1 2019.
● Received private placement equity funding of approximately $1 million.
● Secured a $4 million loan facility available in two tranches, with $2,850,000 received during the first quarter and the remaining portion received in the subsequent quarter.
● Obtained convertible security funding for up to $10 million available in two tranches, with $2 million drawn in the subsequent quarter and the remainder available subject to mutual agreement with the lender.
Management Commentary:
“During our first fiscal quarter of 2020 we made tremendous strides in many areas of our business designed to better position JWC for success in the new year. We focused our efforts on deriving the maximum value from all available resources and avenues, including our biological assets, branded products, key partnerships, proprietary technologies and newly established sales channels.”
“Our financial results for the quarter demonstrated that despite our strengthening platform, we were not immune to the challenges of an industry that is still evolving and striving for balance. While revenue declined substantially, this was largely purposeful, reflecting what we see as temporary conditions that are now set to pivot and launch in the opposite direction in the current quarter.”
“During fiscal Q1, we implemented a strategic response to the market. A combination of number of factors, primarily oversupply and the lack of legal sales outlets continued to drive the illicit market. As a result, our wholesale partners were unable to buy our products at historical prices, driving gross margins into the negative territory. So, we made the strategic decision to hold back on sales and preserve our biological assets until the oversupply subsided and the recreational market opened.”
“Our ability to attract various sources of capital even in this challenging environment demonstrated our strong value proposition and gave us the flexibility to pursue our strategy. We dedicated our resources to the development of our Cannabis 2.0 products, positioning ourselves to capture the anticipated growth in the recreational market in the current quarter. This has also included the formation of a variety of new partnerships and obtaining key regulatory approvals.”
“Experts are now predicting a three times growth in industry-wide sales in 2020, as the number of retail stores steadily increase as a result of eased regulations and the oversupply subsides. We expect this to support the sale of significant volumes of our products in Q2 and beyond.
“Our primary focus will remain on becoming a highly successful cultivator and seller of clean, consistent cannabis. Our financial outlook is unchanged for fiscal Q2 and Q3, as we reiterate below. Combined with our industry-leading yields and lower cost of production due to our unique GrowthSTORM™ system, we believe we can achieve and sustain highly favorable margins and strong growth over the long term.”
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF), a leading vertically integrated cannabis operator in the United States, has been approved as a Clinical Registrant in Pennsylvania by the Commonwealth's Department of Health, Office of Medical Marijuana. Under this designation, the Company will be permitted to open a cultivation and processing facility and up to six dispensaries, under the Commonwealth's medical marijuana research program.
As a Clinical Registrant, Curaleaf will support research initiatives into the potential medical benefits of cannabis by providing medical cannabis, expertise and distribution to patients participating in studies.
In announcing the awards of the clinical registrant licenses, Dr. Rachel Levine of the Pennsylvania Department of Health remarked; "Pennsylvania remains on the forefront for clinical research on medical marijuana. This research is essential to providing physicians with more evidence-based research to make clinical decisions for their patients. It is the cornerstone of our program and the key to our clinically based, patient-focused program for those suffering with cancer, PTSD and other serious medical conditions."
Joe Lusardi, Chief Executive Officer of Curaleaf, said, "We thank the Pennsylvania Department of Health for approving Curaleaf to participate in this vital research program. The Pennsylvania State Legislature mandated research as a component of its medical cannabis program, setting it apart from the rest of the nation. Curaleaf has always been focused on high-quality cannabis products, as well as superior patient care and education. We look forward to contributing to medical research that will ultimately benefit not only the residents of the Commonwealth, but the entire country."
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