Investor Ideas Potcasts #550, Cannabis News and Stocks on the Move; (TSX: WEED) (NASDAQ: CGC) (TSX: FIRE) (CSE: PULL) (CSE: HOLL) (CSE: CURA)
Delta, Kelowna, BC - April 8, 2021 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today's podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
Listen to the podcast:
Investor Ideas Potcasts #550, Cannabis News and Stocks on the Move; (TSX: WEED) (NASDAQ: CGC) (TSX: FIRE) (CSE: PULL) (CSE: HOLL) (CSE: CURA)
Today's podcast overview/transcript:
Good afternoon and welcome to another episode of Investorideas.com "Potcast" featuring cannabis news, stocks to watch as well as insights from thought leaders and experts.
In today's podcast we look at a few public company announcements.
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) and The Supreme Cannabis Company, Inc. (TSX: FIRE) (OTCQX: SPRWF) announced that they have entered into a definitive arrangement agreement under which Canopy will acquire all of Supreme Cannabis' issued and outstanding common shares in a transaction valued at approximately $435 million on a fully-diluted basis.
Under the terms of the Arrangement Agreement, Supreme Cannabis shareholders will receive 0.01165872 of a Canopy common share and $0.0001 in cash in exchange for each Supreme Cannabis Share held. The Transaction provides Supreme Cannabis shareholders with a premium per Supreme Cannabis Share of approximately 66% based on the closing prices of the Supreme Cannabis Shares and Canopy common shares on the Toronto Stock Exchange as of April 7, 2021.
The Transaction is expected to provide several benefits to both Canopy and Supreme Cannabis shareholders. Notably, following completion of the acquisition, Canopy will possess a strengthened brand portfolio including one of Canada's leading premium brands, 7ACRES. Brand growth is anticipated with distribution supported by Canopy's robust sales and distribution network as well as superior consumer insights and R&D capabilities. In addition to receiving a market premium, Supreme Cannabis shareholders will also benefit from Canopy's US CBD business and conditional positioning for continued exposure to the US market expansion. Further value will be derived through the scalable Kincardine, Ontario production facility, which has a demonstrated record of producing premium flower at low cost.
Key Transaction Highlights
Solidifies Canopy's leadership position in the Canadian recreational market, well-positioned for growth: The Transaction combines Canopy's preeminent position with Supreme Cannabis' Top-10 position in Canada to create a pro forma Canadian recreational market share of 13.6%(1), including 7ACRES holding Canada's number one premium flower brand position, number one in PAX vapes, and Top-5 in pre-rolled joints(2).
Adds premium brands to Canopy's portfolio: The addition of Supreme Cannabis' premium brands, 7ACRES and 7ACRES Craft Collective, complement Canopy's current consumer offering and will strengthen Canopy's brand portfolio, with both brands expected to continue to grow with further investment and expansion. Supreme Cannabis' Blissco and Truverra brands also add breadth to Canopy's market presence in both the recreational and medical markets.
Brings a premium, low-cost and scalable cultivation facility to Canopy's production capabilities: Supreme Cannabis' hybrid-greenhouse cultivation facility at Kincardine, Ontario has a demonstrated capability of consistently producing premium flower from sought-after strains at low cost with significant potential for scaling.
Secures an immediate attractive premium for Supreme Cannabis shareholders: The Transaction provides Supreme Cannabis shareholders with a premium per Supreme Cannabis Share of approximately 66% based on the closing prices of the Supreme Cannabis Shares and Canopy common shares on the TSX as of April 7, 2021.
Participation by Supreme Cannabis shareholders in the future of Canopy: The Supreme Cannabis shareholders will receive Canopy common shares pursuant to the Transaction and will have access to Canopy's consumer insights, advanced R&D and innovation capabilities as well as the opportunity to participate in the future growth of the US market based on the Company's conditional positioning for rapid market entry. Post-Transaction, Canopy's industry-leading balance sheet and cash position of approximately $2.5 billion positions the company for further expansion and product development.
Opportunity to achieve potential cost synergies estimated at approximately $30mm within two-years: Canopy anticipates post-Transaction cost synergy opportunities across both cost of goods sold and sales, general and administrative expenses, as it optimizes and integrates Supreme's operations and shared services.
"As we continue to expand our leading brand portfolio, we're excited to reach more consumers through Supreme's premium brands and high-quality products, further solidifying Canopy's market leadership," said David Klein, Chief Executive Officer of Canopy. "Supreme's deep commitment to superior genetics, top-tier cultivation and strict quality control, paired with Canopy's leading consumer insights, advanced R&D and innovation capabilities, is expected to create a powerful combination that aligns with our strategic focus to generate growth with premium quality products across key categories."
"This transaction is a testament to the value created by all the teams at Supreme and will be beneficial to all of our stakeholders," added Beena Goldenberg, President and CEO of Supreme Cannabis. "We have been successful at delivering great products that achieved strong customer loyalty, and operating at levels of efficiency that are industry-leading. We have also built a highly sought-after premium brand in 7ACRES. Combining Supreme Cannabis with Canopy - a Canadian market leader with exposure to the United States - presents a significant value creation opportunity for both companies. We look forward to working with Canopy to complete this transaction."
Pure Extracts Technologies Corp. (CSE: PULL) (OTC: PRXTF) announced the signing of a Letter of Intent with the affiliate of a publicly traded multi-state operator (MSO) to form a Joint Venture to install a cannabis and hemp extraction system in an existing Michigan facility.
This MSO has a long history of success in Oregon offering a family of products including sun-grown and indoor premium flower, along with patented nitro sealed indoor and sun-grown pre-rolls and jars. These products are also grown and packaged in Michigan for retail sale in over 100+ dispensaries throughout the state.
Pure Extracts is a plant-based extraction company focused on cannabis, hemp, functional mushrooms, and the rapidly emerging psychedelic sector from a state-of-the-art processing facility located just north of Whistler, British Columbia.
In Michigan, the companies plan to join forces by combining the MSO affiliate's local permitting, licensing, and marketing expertise with Pure Extracts' extraction, vape, live resin and edibles manufacturing skills. The venture partners plan to build-out 2,600 sq. ft. of existing, under utilized, space in the MSO's current facility, which is strategically located in central Michigan within a 2-hour drive of several major markets.
Pure Extracts expects to contribute a mix of equipment and cash to the venture, which will allow the partners to rapidly scale-up to meet the rising demand for recreational cannabis concentrates and edibles throughout the state.
Michigan is anticipated to follow similar consumer trend patterns experienced in other states such as California and Colorado where sales of extracts and concentrates eventually overtake sales of dry-flower. Bruce Linton, co-founder and former CEO of cannabis giant Canopy Growth and executive chairman of Michigan-based and newly public Gage Growth Corp., recently commented in Forbes that, "Michigan is one of the fastest growing cannabis markets in the U.S." According to the Michigan Marijuana Regulatory Agency (MRA), during February 2021, Michigan cannabis sales increased 160% from a year ago to US $106.2 million, with medical sales improving 48% to US $38.1 million and adult use sales soaring 353% to US $68.1 million.
In addition to manufacturing Pure Extracts' proprietary brands of vapes and edibles, the JV partners anticipate an initial white-label order for live-resin concentrates from the MSO affiliate as that company continues to build on the outstanding reputation its dry-flower products have already garnered within the Michigan marketplace.
Pure Extracts CEO, Ben Nikolaevsky, remarked, "We are really excited about launching our first US initiative into the dynamic Michigan market, especially with experienced and entrenched partners. There is strong demand throughout the state for the products we know best: full spectrum oil (FSO) vapes, live resin concentrates, and edibles. With immediate access to the MSO affiliate's 100+ dispensary customers out of Michigan's nearly 400 licensed dispensaries, we expect our products to be distributed and on-shelves in Q4 of this year."
Expansion of the Company's operations in Michigan are subject to compliance with applicable state laws concerning cannabis as well as general compliance with CSE policies and Canadian securities laws.
Hollister Biosciences Inc. (CSE: HOLL) (OTC: HSTRF) and Easyriders have come together to create high-quality cannabis products that embody the independent spirit and attitude of the modern biker. The collaboration officially hits the road this month with premium pre-roll packs in silver or black collectible tins featuring the iconic Easyriders logo.
Each pack contains 10 .2-gram pre-rolls designed for quick, socially discreet ways to medicate, microdose and elevate on the go or when sharing with friends. The silver tin features pre-rolls made with an artisan Sherbert strain (Girl Scout Cookies x Pink Panties genetics), while the pre-rolls in the black tin feature lush Ice Cream Cake flower (Wedding Cake x Gelato #33 genetics). Both are terpene-rich, indica-dominant hybrids that may promote stress release, physical relaxation and uplifting moods.
These initial products in the Easyriders line will be available at dispensaries throughout California. The line will expand later this summer with the introduction of a topical tattoo balm.
Hollister Biosciences was founded in the California town where an infamous 1947 biker rally birthed the outlaw biker image and inspired the Marlon Brandon film The Wild One, while Easyriders has been the definitive voice of motorcycle culture for more than half a century. Shared roots in a classic Americana culture made the companies natural ride partners from the start.
"My vision for Hollister has always been to pay homage to the amazing biker culture that has permeated the global landscape over the past few decades by combining it with amazing cannabis products," says Carl Saling, the Co-Founder, CEO and Director of Hollister Biosciences. "Easyriders is one of the most iconic and recognizable global biker brands. With the collaborative vision of Easyriders' Pepper Foster, we are proud to now be their exclusive cannabis partner, and we look forward to producing a truly authentic experience across the cannabis skus we develop and distribute across America."
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) announced new Curaleaf branding for the Company's recently acquired retail locations and the opening of two new locations in Horsham and Philadelphia. The new Curaleaf-branded stores mark the company's 11th and 12th locations in Pennsylvania. As a vertically integrated cannabis operator known for quality, expertise and reliability, Curaleaf is the largest national cannabis retail brand in the U.S., and will have 104 locations across 23 states following the opening of the two new Pennsylvania dispensaries.
Curaleaf successfully closed its acquisition of Grassroots on July 23, 2020. In connection with that deal, nine Herbology dispensaries in Pennsylvania—located in Altoona, Bradford, Brookville, Dubois, Gettysburg, King of Prussia, Lebanon, Morton and Philadelphia— have already been rebranded under the Curaleaf umbrella.
Over the coming week, Curaleaf will open two additional retail locations in the southeastern Pennsylvania market at 255 Horsham Road in Horsham and 5058 City Avenue in Philadelphia, marking the Company's 103rd and 104th retail locations nationwide. A ribbon cutting ceremony with the Eastern Montgomery Chamber of Commerce at 9:30 a.m. commemorated Horsham's opening on April 7th, and a ribbon cutting with the Main Line Chamber of Commerce will follow at the new City Avenue location at 8:50 a.m. ET on April 12th. A portion of proceeds from both opening days will be donated to the Central PA Food Bank and the Urban Affairs Coalition as a continuation of Feed the Block, an initiative of Curaleaf's Corporate Social Responsibility program developed to combat and address food insecurity in the communities it serves.
"We are pleased to expand and strengthen our retail presence in Pennsylvania, offering our unparalleled patient care and education, as well as access to premium cannabis products," said Joe Bayern, Curaleaf Chief Executive Officer. "We look forward to serving these communities and anticipate that demand will quickly surpass projected sales in this market, as cannabis continues to gain acceptance for a variety of health and wellness needs."
All locations will prominently display Curaleaf's signature teal logo, and as part of the interior design, each store will feature hyper-local cityscape murals that capture each unique location, further enhancing the experience and connection to the community. The staff at each retail location remains committed to delivering unparalleled service and creating an inclusive experience that encourages exploration and education with a personalized approach.
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