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Thursday, August 11, 2022

Cannabis Weekly Round-Up: Leading MSO's Revenue Stalls, Shares Drop

A leading multi-state operator (MSO) saw its shares stumble last week after reporting a lack of revenue growth in its most recent quarterly financial report.

This past week also brought a name change for a struggling Canadian cannabis producer trying to find a new identity. Keep reading to find out more cannabis highlights from the past five days.

Green Thumb shares drop on recent quarterly results

In its Q1 financial report, Green Thumb Industries (CSE:GTII,OTCQX:GTBIF) shared an increase in year-over-year revenue, but revealed that its performance was flat compared to Q4 2021.

“As I have said before, growth is not linear and there will be quarter-to-quarter fluctuations depending on when new markets open to adult-use sales as well as the timing of our infrastructure investments,” Ben Kovler, Green Thumb’s founder and CEO, said in a statement to investors.

The cannabis firm reported a US$242.6 million revenue line for its most recent quarter, while in its previous quarter revenue came in slightly higher at US$243.6 million. As for its net income, which is still a rarity to see in the cannabis market, Green Thumb reported US$28.9 million, or US$0.12 per basic and diluted share.

The company celebrated its operations across 15 state markets, but pointed in particular to the opening of adult-use sales in New Jersey as a catalyst moving forward.

“Our preparations in New Jersey positioned us well for demand on Day One, and we feel confident in our playbook for future adult-use transitions,” the Green Thumb executive said.

At the end of the quarter, the MSO was managing 76 active cannabis stores across the US.

Shares of Green Thumb took a hit following the release of its latest financials. Last Wednesday (May 4), the company finished the trading day with a nearly 2 percent decline for a price per share of C$16.30.

Since then, the company, which is valued at over US$3 billion, has continued to trend downward. As of last Friday’s (May 6) opening bell, the company was down 7.28 percent at a price point of C$15.40.

​CannTrust goes for a change in identity

The scandalous case of CannTrust Equity has begun a new chapter as the company enters the next stage of its attempt to return to the market.

It was announced this past week that the firm will begin going by the name Phoena Holdings.

CannTrust is now owned by Netherlands-based private equity firm Kenzoll, which has a 90 percent stake in the company. The same equity investor gave the company a C$17 million infusion in order to relieve CannTrust from creditor protection earlier this year.

According to the Canadian Press, the firm will attempt to obtain a securities listing in the near future.

CannTrust has carried the weight of the most shocking development in the emerging regulated Canadian cannabis industry: Health Canada flagged the firm for growing operations in unlicensed rooms at its Ontario facility.

The revelation led to executive turnover, charges from the Ontario Securities Commission and a serious downturn for the cannabis producer, which at the time was listed on the New York Stock Exchange.

​Cannabis company news

  • Tetra Bio-Pharma (TSX:TBP,OTCQB:TBPMF) confirmed a new research and development partnership with Cannvalate, a medical cannabis company based in Australia, alongside a private placement worth C$7.5 million from its new partner. The purpose of the deal is for the company to pursue medical cannabis drug candidate trials in Australia.
  • Akanda (NASDAQ:AKAN) secured its acquisition of Holigen, a Europe-based cannabis genetics firm held by the Flowr Corporation (TSXV:FLWR,OTC Pink:FLWPF). The deal was completed with payment of C$3.75 million, 1.9 million shares of the firm and the assumption of US$4.3 million in debt. Akanda also purchased C$1 million worth of Flowr shares. Akanda has already given Holigen US$678,000 for operational needs.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) plans to divest control of several technology-related interests and assets to its subsidiary Halo Tek.
  • HEXO (NASDAQ:HEXO,TSX:HEXO) installed an at-the-market equity program in order to issue and sell up to US$40 million worth of company shares. The decision is based on a previous agreement with boutique banker Canaccord Genuity. This deal effectively replaces the previously announced offering from the company worth C$150 million.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

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