The Daily Hit: December 14, 2020

It’s time for your Daily Hit of cannabis financial news for December 14, 2020.

On The Site

Indus

California-based cannabis company Indus Holdings, Inc. (CSE: INDS)(OTCQX: INDXF) has filed a C$100 million offering in Canada. Indus is based in Salinas, California, and is home to the following brands: Cypress Cannabis, House Weed, The Original Pot Co., MOON, Humble Flower, and Kaizen Medicinals. The offering extends over 25 months and can accommodate a variety of financial instruments. For the quarter ending December 31, 2020, Indus said it is “expecting lower harvest yields than the previous quarter due to plant stress experienced from sealing greenhouses to prevent poor air quality from entering due to wildfires in California that occurred in late summer, early fall 2020, at a time when outdoor temperatures were also elevated.

New Wave

N2 Logics Inc. in a joint venture with New Wave Holdings Ltd.  (CSE: SPOR) (OTC: TRMNF) has acquired Europe’s e-commerce platform Bloom Botanics, a CBD online superstore and complex mushroom blends provider for an undisclosed amount. Bloom Botanics was formed when a collective of E-commerce experts from the UK, Ireland, and the North American Cannabis and Cannabis Accessory industry realized there was a significant opportunity to create Bloom Botanics to carry an impressive range of CBD and mushroom-based products and continue to aggressively increase its presence in this space from a product and geographical basis.

Hexo

HEXO Corp. (NYSE: HEXO) reported first-quarter fiscal 2021 financial results with gross revenue of $41.3 million, a sequential increase of 14% and 114% from the prior-year period first-quarter. Total net revenue increased $2.3 million to $29.4 million from the fourth quarter due mostly to an 8% growth in adult-use cannabis sales and a 54% growth in the adult-use beverage category. Total net revenue increased 103% from the fiscal first-quarter of 2020. All amounts are expressed in Canadian dollars.

Operating expenses for Hexo were trimmed to $20.8 million from $71 million in the fourth quarter as the company said it continued to streamline costs across the organization, primarily in SG&A, offset by marketing costs related to product launches. Loss from operations improved to $2.6 million in the first quarter versus a loss of $60.5 million in the fourth quarter, which the company said was driven by a clean balance sheet and absence of material, non-recurring charges.

In Other News

IIP

Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it entered into an amendment of the lease with PharmaCann Inc. (PharmaCann) in Hamptonburgh, New York, making available $31.0 million in funding for significant enhancements in production capacity and additional upgrades at the 127,000 square foot facility. The lease amendment also adjusted the base rent under the lease to take into account the additional available funding and extended the term of the lease agreement. Assuming full payment of the additional funding, IIP’s total investment in the property will be $61.0 million. IIP originally acquired the New York property and entered into a long-term lease with PharmaCann in 2016.

GrowGen

GrowGeneration Corp. (NASDAQ: GRWG) completed a previously announced upsized underwritten public offering of an aggregate of 5,750,000 shares of its common stock at a public offering price of $30.00 per share for gross proceeds, before deducting underwriting discounts and commissions and offering expenses, of approximately $172.5 million, which includes the exercise in full of the underwriters’ option to purchase 750,000 additional shares.

Stem

Stem Holdings, Inc. (OTCQX: STMH) (CSE: STEM) has obtained a receipt for a preliminary short form prospectus from the securities regulatory authorities in all provinces of Canada (except Québec) in connection with a marketed public offering of units of the Company. The net proceeds raised under the Offering will be used for working capital and general corporate purposes. The Offering is expected to close in January 2021.

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