This week's cannabis business news | The Bengal Bite 🐯
American Cannabis Sales Stabilized in October According to BDSA Data (New Cannabis Ventures) Following four months of softening sales trends, most of the markets that cannabis data analytics firm BDSA covers experienced stabilized in October. Tough comparisons from a year ago, when sales surged during the pandemic, had resulted in relatively weak annual growth in most markets, though some western states continue to experience moderating declines. Sequentially, October had one more day than September. Weak sales of flower compared to a year ago remained an underlying theme. In this review, the markets are reviewed one-by-one, beginning with the more mature western markets and then concluding with the newer eastern markets.
Western Markets
BDSA provides coverage for Arizona, California, Colorado, Nevada and Oregon. In October, growth ranged from -12% in Nevada to 28% in Arizona compared to a year ago.
Eastern Markets
In the newer markets, the annual rate of growth slowed in two of the three markets for which BDSA provides data. Note that BDSA has begun providing data for Florida, Michigan and Pennsylvania as of January. Florida sales fell 6.4% sequentially to $149.1 million, while Pennsylvania rose 0.7% from September to $102.8 million. Michigan, which was previously detailed, saw overall sales increase 1.3% from September to $163.5 million, up 53% from a year ago. BDSA, which includes accessories, reported a lower level of sales for October at $151.4 million, down 0.2%.
Harborside announces business combination with Urbn Leaf Cannabis and Loudpack to become StateHouse Holdings Inc.(Company Press Release) | Harborside Inc. (CSE: HBOR), (OTCQX: HBORF): On November 29, 2021 -- Harborside Inc., a California-focused, vertically integrated cannabis enterprise, was pleased to announce that it has entered into definitive agreements to acquire UL Holdings Inc. (“Urbn Leaf”), a top California cannabis retailer with a dominant position in Southern California (the “Urbn Leaf Transaction”), and LPF JV Corporation (“Loudpack”), a leading manufacturer, cultivator and distributor of award-winning cannabis brands in California (the “Loudpack Transaction” and, together with the Urbn Leaf Transaction, collectively, the “Transactions”). Following completion of the Transactions, Harborside is expected to be renamed StateHouse Holdings (“StateHouse”), subject to shareholder and regulatory approval. Management believes that StateHouse, which is expected to trade under a new symbol (CSE: STHZ), will be the largest and most developed cannabis platform in the state of California with superior retail, brands, processing, manufacturing, distribution and cultivation. Management believes that StateHouse will have the highest estimated annual revenue and brand market share among its current publicly-listed California peers1 , providing the Company with a strong platform for growth as a consolidator of California’s cannabis industry.
Schwazze Announces Transformational Capital Raise, Entry Into New Mexico & Provides Business Update (Schwazze Press Release): (OTCQX:SHWZ): Schwazze, one of the largest vertically integrated cannabis operators in Colorado, has entered into a securities purchase agreement with institutional investors and individuals under which the Company will issue and sell, subject to customary closing conditions, $95 million of principal amount and $93 million of funding amount (reflecting a 2% original issue discount) of convertible notes. The Company anticipates using the proceeds from the note to fund the cash consideration of recently announced acquisitions and other growth and expansion initiative.
Schwazze is also pleased to announce that it has signed definitive documents to acquire substantially all the operating assets of Reynold Greenleaf & Associates, LLC, and the equity of Elemental Kitchen & Laboratories, LLC.
As part of the transaction, the Company will also have a right to purchase or acquire cannabis licenses held by Medzen Services, Inc., ("Medzen") and R. Greenleaf Organics, Inc. ("RGO"), not-for-profit organizations that hold medical cannabis licenses in New Mexico (the assets and licenses described herein are referenced collectively as "Greenleaf'). Total consideration for the acquisition will be $42 million (subject to potential working capital adjustments) with a potential performance based earnout. The consideration will consist of $25 million in cash payable at closing and $17 million in a 3-year seller note at 5% interest.
Greenleaf is a licensed medical cannabis provider with ten dispensaries, four cultivation facilities – three operating and one in development - and one manufacturing location. The dispensaries are located in Albuquerque, Santa Fe, Roswell, Las Cruces, Grants and Las Vegas, New Mexico. Greenleaf's approximately 70,000 square feet of cultivation as well as 6,000 square feet of manufacturing space are located in Albuquerque.