I’d be here writing all day if I did a story for every piece of news coming out today, so here’s a collection of what’s the hap with our big basket of weed companies as the November 8 weed vote (also Presidential election) nears.
ARCTURUS GROWTHSTAR TECHNOLOGIES (AGS.C) to buy a Florida medical marijuana-zoned greenhouse:
Squeezing in just before Florida votes on marijuana, AGS has taken up an LOI on a 10-acre greenhouse that is operating presently supplying ornamental plants to big box stores around Florida and is properly zoned to grow, produce and dispense cannabis, according to the company.
Weird kink in Florida weed rules – applicants have to have been in the agricultural business for at least 30 years and grow 400,000 plants annually to qualify for a license. The team AGS is hooking up with reportedly fit under that rule. The company is boasting that the agreement, if it moves ahead as expected, will make it a Florida first mover.
Currently the business makes $2.6 million a year in revs on $400k EBITDA. AGS will look to use their vertical farming tech to increase current business while it waits for Florida’s Amendment 2 to take shape in legal reality, which will probably also mean the specifics of the deal (such as the ownership model and whether Canadians can own part of the deal) will need to also wait until the dust clears a little.
AGS board member John Sweeney, who was once VP of Ops at Tilray, said of the news, well, nothing worth quoting. “We’re excited,” blah blah. Don’t you hate those news release quotes that share nothing you don’t already know?
I went south on AGS when it started plans to make apps – I can be down with buying something that’s making existing revenue, but the app world is a notorious money burner – but this is a positive and strong move forward.
TINLEY BEVERAGE COMPANY (TNY.C) announces new SKU:
The Tinley Beverage Company Inc. (TNY.C) is banging out new SKUs of late, with it’s de-alcoholized THC-added alcohol drinks currently under development and its Hemplify hemp beverage product already out in dispensaries and store. So the news that it’s now moving in on the energy shot space is intriguing.
The new Hemplify Energy Shot is now a thing.
Tinley has placed a purchase order for the product with its California manufacturer and, according to a news release, “is proceeding with final testing and other customary production procedures.”
Take it away team Tinley:
Like the existing Hemplify products, the Hemplify energy shot will be natural, sugar-free, vegan, non-GMO, gluten-free and made with technology designed to enhance bioavailability. In addition to hemp stalk extract, the shot will contain a significant dose of MCT oil and vitamins. Medium-chain triglycerides (MCTs) are a naturally occurring source of dietary fats found in coconut oil. MCT can be rapidly converted into ketones, which can be used as an energy source by the brain. MCT’s also support digestion and immunity.
“The Company is well-positioned to distribute this new energy shot via our existing network of convenience stores, smoke/head shops, premium grocery stores and online,” points out CEO Jeff Maser, right on the heels of a $2.5 million financing at $0.17, and a 165% stock price growth in the weeks since.
— BevNET.com (@BevNET) November 7, 2016
FULL DISCLOSURE: I’m a marketing consultant for Tinley, and own a nice chunk of that stock, which has been making me very happy as it just keeps climbing. Do your own due diligence before you decide that this is a good time to get in yourself.
LIBERTY LEAF (LIB.C) explains drifting stock: Warrant cash!
I got a few knuckleheads tweeting at me that Liberty Leaf (LIB.C) was a fail because it had a few down days last week, which ignores the fact that A) everyone had a few down days and B) nobody knows the story yet. So I went to the company and asked an insider what’s up.
“5c stock with 7c warrants,” was the answer. A little ways back, the company was starting to finally move into a higher gear, coming off a hand full of cents per share, and it did a raise for $400k or so at 5c. At the time, that was a kickass premium for the company, but recent news has taken things to a different place. Now you’ve got a 20c stock that people are sitting on a nice profit with, with those cheapy warrants burning a hole in their pocket, so some profit taking is happening. On the other side of this: “We’re seeing cash come in every day,” I’m told. That’s good, because the company has a plan to use some of that cash, and a lot of shares, to close their deal with the California company with six dispensaries and a handful of growhouses…
MATICA ENTERPRISES (MMJ.C): No, really!
The falling over of Matica Enterprises’ marijuana plans was one of the hairy lowlights of the last year or so in the weed space. The company retooled a little to take advantage of its graphite property, a literal stone’s through from a gigafactory that’s in the planning stages, but the head honchos of the company took a lot of heat for it falling over at the last.
Well, we may never know the full story, but we do know as of today the lawyer representing THC Dispensaries (THCD), the company that was looking to win its production license, has been not just rapt on the knuckles, but kicked in the legal cajones.
Matica filed a complaint with the [New Brunswick Barristers Society] in August 2015 against Mr. JeBailey and the other members at Burnside Law office regarding what we considered to be their unethical actions while representing THCD of which Matica was a 50 percent shareholder. The Committee reached a decision regarding Mr. JeBailey and concluded that he had violated his duties with respect to conflict of interest, quality of service and competence:
“The Committee concluded that by failing to indentify there was a substantial risk to his duty of loyalty, and failing to seek appropriate consents to continue acting in a position of conflicting interests, Mr. JeBailey violated his duties pursuant to Rules 3.4-1 (Duty of Avoid Conflicts of Interest) and 3.4-2 (Consent) of the Code of Professional Conduct.“
“The Committee concluded that by not performing all legal services undertaken on his clients’ behalf to the standard of a competent lawyer, Mr. JeBailey violated his duties pursuant to Rule 3.2-3 (Quality of Service / When Client is an Organization) of the Code of Professional Conduct.”
Yikes. What this means going forward is anyone’s guess, but a lawsuit against JeBailey is underway, with potentially some funds to be returned to Matica for its lost opportunity.
In November of 2015 the Company filed a Notice of Civil Claim in the Vancouver Registry of the Supreme Court of British Columbia naming THC Dispensaries Canada Inc. (“THCD“), Francis MacMaster, CEO of THCD and other related parties as Defendants in an effort to recoup funds and other damages suffered by Matica as a result of numerous breaches by the Defendants of the October 7th, 2014 Investment Agreement.
CANNABIS ROYALTIES (Not yet public): Lab investment featured on Dr Oz show
Cannabis Royalties is, as I’ve mentioned before, the screaming big boy pants weed deal of the next year. Anchored into well over a dozen investments in the cannabis space, in five states in the US, allowing them to cross-promote and license brands across state lines to create legitimate national products, with deals locking them into one of Canada’s biggest LPs at the same time, there’s no doubt in my mind that the thing will be a juggernaut.
And it doesn’t hurt to get spots on the Dr Oz show with Montel Williams fronting and talking about ‘our process’ and ‘our quality.’
CALYX BIOVENTURES (CYX.V) licenses more tech to build out LeafHub
Calyx Bio-Ventures (CYX.V) has been busy since folks started paying attention to its canna-software plans these past few weeks. The stock has marched up from $0.015 a few weeks back to $0.13 today, the tech development staff in Casa Calyx have been cashing in their options and enjoying the fruits of the their labour, and the company announced that it has licensed some tech to help launch a LeafHub social messaging, ecommerce and community building site, sort of like Slack but for the entire industry.
Today they put out more news that there’s more licensing been done to help build that out quickly, and make available the ability to expand into other industry versions while they’re at it.
Calyx Bio-Ventures Inc. is pleased to announce that it has entered into a letter of intent to acquire the rights to an existing software framework which will enhance the features of our real-time, mass communications platform. The new framework provides the additional flexibility to aggregate users onto a single forum, and at the same time allow them to participate in specialized forums or communicate privately. This technology is expected to seamlessly integrate into the Company’s existing FocusPoint Software Platform, which forms the basis of the Company’s LEAFHub Communications Cloud product.
In consideration for the acquisition, the Company will issue 2,500,000 common shares and will complete cash payments of (Cdn) $200,000 over a twelve-month term.
With the cash coming in from warrants from financings past, options, and future raises, Calyx finally has room to move, and it appears to be ramping up accordingly.
FULL DISCLOSURE: I’m a marketing consultant for Calyx and own stock in the company.
MMJ PHYTOTECH (ASX:MMJ): Shifts to TSX-V through Harvest One Capital
Australian weed first mover MMJ Phytotech got a nice share price bump back in the day when it debuted on the aussie markets with no actual business plan. In the time since, it drifted, then picked up a Canadian grower in United Greeneries, and the Satipharm AG brand, then recently decided to shop the properties with a view to getting them on the much more canna-friendly TSX-V.
Recently, a deal was struck to do just that with Top Strike Resources (WON.H), but the team behind Potash One and some of the players behind Organigram (OGI.V) have combined to make a better offer.
Harvest One will pay $42 million for the properties, which is $2 million more than Top Strike had offered, and will see pro-forma ownership of 70% as opposed to 69%.
Tough break, Top Strike.
— Chris Parry