It’s time for your Daily Hit of cannabis financial news for December 20, 2021.
On The Site
Glass House Brands Inc. (OTCQX: GLASF and GHBWF) is buying Plus Products Inc. (CSE: PLUS) (OTCQX: PLPRF) for approximately $25.6 million in a deal expected to close in the first quarter of 2022. The acquisition will be a combination of unsecured convertible debt and equity, plus additional performance-based consideration. Plus recently found itself in trouble when in September when Plus filed for the Canadian version of bankruptcy. According to Plus’ filing, it had secured court protection from its creditors under the Companies Creditors Arrangement Act or “CCAA”, in order to restructure its business and financial affairs. The acquisition is being completed by way of a plan under the CCAA and is subject to the approval of PLUS’ creditors.
Havn Life Sciences Inc. (CSE: HAVN) (OTC: HAVLF) is buying functional mushroom wellness brand Spore Life Sciences Inc. Toronto-based Spore Life Sciences Inc. has a significant U.S. consumer base of more than 110,000 Spore customers, nearly 40,000 subscribers, resulting in year to date revenues as of the end of November 2021 of nearly C$8 million, and current sales of more than $1 million per month.
The Securities and Exchange Commission (SEC) has reached a settlement with the regulator, according to a court filing Friday with TruCrowd Inc. as reported by Law360. TruCrowd, also known as Fundanna agreed to pay $243,747 in disgorgement, interest and penalties with regards to a claim that the company ignored red flags about businessman Robert Shumake Jr. In September, the SEC filed charges against three individuals and one issuer on a crowdfunding scheme for two cannabis companies that raised $2 million. The money was supposed to be used to buy and invest in cannabis properties, but no money was ever used for those purposes. Instead, the money was siphoned off for personal use. In addition to that, the SEC also charged the registered crowdfunding portal, TruCrowd, and its CEO Vincent Petrescu, who placed the offerings on the portal’s platform. For his part, Petrescu will pay a $9,700 fine as part of the settlement. Law360 reported that neither he nor TruCrowd admits or denies the SEC’s allegations against them. In addition to those settlements, Shumake’s associate Nicole Birch has also agreed to settle the claims against her by paying more than $679,000 in disgorgement and interest as well as a $200,000 fine. The report also stated that she also neither admits nor denies the claims.
In Other News
Piper Sandler downgraded Canopy Growth stock saying sales trends remained under pressure. Analyst Michael Lavery downgraded the stock to Underweight from Neutral, and also lowered the price target to $7 from $11. U.S.-listed shares of Canopy Growth fell 9.5% to $8.68. The analysis suggested that Canopy Growthstock could fall even further than the 60% it has lost year to date. “Canopy continues to lose share in Canadian recreational use cannabis, and its U.S. measured retail sales, while still small, are down ~30% since August,” said a note from the firm.
Turning Point Brands, Inc. (NYSE: TPB) announced today that it has received a United States Postal Service exemption to ship vapor products to thousands of age-restricted vape shops across the United States through VaporBeast and other websites.
KEY Investment Partners LLC announced the closing of its cannabis-focused venture fund with approximately $30 million in aggregate capital commitments. KEY Investment Partners provides strategic capital to high-growth companies that are well positioned to develop the infrastructure of the cannabis industry. To date, KEY has made 11 investments across multiple sub-sectors of the cannabis industry, including market-leading companies such as: HERBL, a supply chain solutions and distribution company; Springbig, one of the largest cannabis-focused loyalty and marketing automation platforms; XS Financial, a direct lender that provides flexible leasing solutions to cannabis companies; and Open Book Extracts, a cannabinoid ingredient formulator and producer.