The Daily Hit: May 17, 2021

The Daily Hit

It’s time for your Daily Hit of financial news for May 17, 2021.

On The Site

Col-Care

Columbia Care Inc.  (OTCQX: CCHWF) reported financial and operating results for the first quarter ended March 31, 2021, with revenue increasing 220% to $92.5 million year-over-year and growing by 13% over the previous quarter. Columbia Care missed the Yahoo Finance average analyst estimate for revenue of $94.1 million.

The net losses were trimmed to $15.3 million from last year’s $20.6 million for the same time period. The earnings per share also improved to ($0.05) from last year’s ($0.09.), however, it wasn’t enough to meet the average analyst estimate for ($0.04) per share. Analysts give the stock a price target of $11.65 on average. Shares have been in an overall uptrend over the past six months and were lately selling at $6.17.

Curaleaf

Curaleaf Holdings, Inc. (OTCQX: CURLF) is buying the largest outdoor grow in known as Los Sueños Farms in a deal valued at $67 million. The transaction is a mix of cash and stock. Curaleaf said this will significantly expand its Colorado presence, vertically integrating within the state. The proposed acquisition includes three Pueblo, Colorado outdoor cannabis grow facilities covering 66 acres of cultivation capacity, including land, equipment, and licensed operating entities, 1,800 plant indoor grow and two retail cannabis dispensary locations serving adult-use customers. An additional contingent consideration of up to $8 million in stock will be paid based upon operating cash flow-based targets for 2022.

Hexo

HEXO Corp. (NYSE: HEXO) announced it is buying 48North Cannabis Corp  (TSX-V: NRTH) in an all-stock deal valued at approximately $50 million on an enterprise value basis. 48North is a brand-led, consumer-centric licensed cannabis producer with an expansive portfolio of high-quality, accessibly-priced products available across the country. The company brands include Trail Mix, an accessibly priced brand formulated with taste and aroma-first flavor profiles and Latitude, a next-generation lifestyle platform and premium, natural cannabis collection focused on wellness, beauty, and beyond. 48North operates two indoor-licensed cannabis production sites in Ontario.

In Other News

MediPharm

MediPharm Labs Corp. (OTCQX: MEDIF) announced its financial results for the three months ended March 31, 2021. In total, revenue was $5.5 million, a 9% decrease from Q4 2020, but with a stronger mix of revenue international which offset a decrease to Canadian domestic revenue.  Net loss of $0.07 per share also compares favorably with the past two quarters (Q4 2020 net loss of $0.21 per share, Q3 2020 net loss $0.11 per share) reflecting the absence of inventory adjustments, fixed asset impairments and restructuring expense, as well as tighter expense controls.

IIPR

Innovative Industrial Properties (NYSE: IIPR) has announced that its operating partnership, IIP Operating Partnership, has commenced a private placement of $200M aggregate principal amount of senior notes due 2026. The Operating Partnership also expects to grant the initial purchasers of the notes a 30-day option to purchase up to an additional $30M aggregate principal amount of the notes. Net proceeds will be used to invest in specialized industrial real estate assets that the regulated cannabis industry that are consistent with its investment strategy, and for general corporate purposes. 

IIPR also closed on the acquisition of a property in Warren, Michigan, comprising approximately 85,000 square feet of industrial space. The purchase price for the property was approximately $10.3 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease at the property with a subsidiary of Sozo Companies, Inc. (Sozo) for continued use as regulated cannabis cultivation, processing and retail facility. 

MedMen

MedMen Enterprises (MMNFF) closed the sale of $10M of units at $0.32/unit; each unit consists of one Class B subordinate voting share and one share purchase warrant. Warrant holder to purchase one share for three years from the issuance date at an exercise price of $0.352/share. “As we accelerate construction for new store openings in our Fenway and two San Francisco locations we are repositioning our narrative from one of turnaround to one of growth,” chairman & CEO Tom Lynch commented. Fenway location is expected to open in late summer or early fall 2021 and its two San Francisco, CA locations in fall 2021.

Mercer Park

Mercer Park Brand Acquisition Corp. (OTCQX: MRCQF), a Special Purpose Acquisition Company  which has entered into a definitive agreement to merge with GH Group, Inc. , California’s leading fully-integrated cannabis business, announced today that it has upsized its previously announced equity private placement to include a US$50 million proposed investment commitment from TPCO Holdings Corp. Including The Parent Company investment, Mercer Park has raised $135 million of private placement capital in connection with the transaction. The commitment is subject to customary approvals and conditions and is expected to close contemporaneously with the closing of the Glass House Group Transaction.

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