Stem enters LOI to acquire vertically-integrated operator as CordovaCann enters LOI to purchase HMS assets
In this week's "Rising High," The Fly's recurring series focused on cannabis and psychedelic stock news, The Fly looks back on LOIs for acquisitions, manufacturing partnerships and NY whole flower sales.
STEM ENTERS LOI TO ACQUIRE COLORADO HARVEST COMPANY: Stem Holdings (STMH) announced Tuesday that it has entered into a letter of intent to acquire High Country Supply d/b/a Colorado Harvest Company, a vertically-integrated operator with two delivery permits, three retail dispensaries, and two cultivation facilities. In calendar 2021, CHC is expected to generate over $13M in revenues, with a projected gross margin of $5.07M upon completing over 180,000 retail transactions. Pursuant to the LOI, the parties intend to negotiate the terms of definitive agreements, providing for the integration of Colorado Harvest Company's three vertically integrated dispensaries, two modern grow facilities, and its two Colorado adult use delivery permits located in Aurora and Denver into Stem's Budee proprietary platform.
CORDOVACANN ENTERS LOI TO ACQUIRE HMS ASSETS: CordovaCann (LVRLF) announced Wednesday that on October 26, the company entered into a non-binding letter of intent for the purchase of the assets of HM Scientific and its sister company, AuBio Labs. The transaction will enable Cordova to provide manufactured cannabis products on both a white label and branded basis throughout the State of California. HMS, headquartered in Costa Mesa, California is completing the buildout of a facility for the extraction and manufacturing of a variety of cannabis derivative products. Once complete, the facility plans to provide tolling services, white label manufacturing and numerous branded product offerings, and will be capable of processing 12,000 pounds of cannabis biomass per month. The facility will be a focal point for Cordova in California, and the company plans to expand its operation in the state in the coming months. HMS is led by a strong operational team with a wide cannabis network that will continue to operate the business post-closing of the transaction. The transaction as contemplated is expected to close on or before December 15, 2021, subject to certain closing conditions.
Pursuant to the terms of the LOI, Cordova has agreed to purchase the assets of HMS, which includes, but is not limited to, extraction and manufacturing equipment, intellectual property related to two cannabis brands, contracts with retailers and tolling customers, lease to the manufacturing building and related liabilities. The proposed consideration for the Transaction is $700,000 and 1M common shares of the company on the closing date. The company plans on financing the upfront cash consideration through accessing the capital markets for debt and/or equity capital.
TYSON 2.0, COLUMBIA CARE PARTNER FOR CULTIVATION, MANUFACTURING: Boxer and entrepreneur Mike Tyson announced his reentry into the world of commercial cannabis on Wednesday with the launch of Tyson 2.0, a new company to bring to market Tyson-branded cannabis products available at multiple price points. Led by Adam Wilks and Chad Bronstein, Tyson 2.0 will provide retailers across the country with a suite of products designed to reach Mike Tyson's national audience. Columbia Care (CCHWF) will be the brand's national cultivation and manufacturing partner in the markets where the company operates. Columbia Care will also sell the Tyson products throughout its dispensary network, as well as wholesale to other retailers. Tyson 2.0 has completed a seed round led by Sol Global, K2, Ambria, and Arcadian Capital. Funds will be used to solidify cultivation agreements, develop proprietary strains, and build a national sales team to bring Tyson 2.0 to legal markets.
Columbia Care also announced Monday a partnership with performer Pitbull to launch N2P, a line of high-quality full-spectrum CBD products for health and wellness routines. The N2P product line is derived from natural, U.S. grown hemp and initial product offerings will feature lip balms, salves, tinctures and sour gummies. The company also announced Monday that it received a license to offer whole flower to New York’s medical cannabis community.
AURORA ENTERS MANUFACTURING DEAL WITH VALENS: Aurora Cannabis (ACB) announced Thursday a manufacturing agreement with The Valens Company (VLNCF) to manufacture a new seasonal offering in the mint category. Launching under Drift Turbo, the company's mainstream adult-use recreational brand, the new Canna Cane Mints are a two-piece hard peppermint candy containing 10mg THC. This is the first product offering under the manufacturing arrangement, which is expected to expand in the coming months. The cannabis edibles will be manufactured using SoRSE by Valens emulsion technology, a patented, in-house emulsion technology that transforms cannabis oils into water-soluble forms to infuse foods, liquids and topicals without the taste or smell of cannabis.
CURALEAF BEGINS SALE OF WHOLE FLOWER IN NY: Curaleaf (CURLF) announced Tuesday that its initial batches of New York whole flower have cleared testing by third party labs and that sales of three initial strains began at the company's Newburgh location and in Curaleaf's Carle Place, Forest Hills, and Plattsburgh dispensaries. Prior to this month, cannabis was only available to New York patients in ground form.
OTHER CANNABIS/PSYCHEDELIC STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Atai Life Sciences (ATAI), Audacious (AUSAF), Awakn Life Sciences (AWKNF), Ayr Wellness (AYRWF), BC Craft (CRFTF), Body and Mind (BMMJ), CanaFarma (CNFHF), RIV Capital (CNPOF), Canopy Growth (CGC), Clever Leaves (CLVR), Compass Pathways (CMPS), Cresco Labs (CRLBF), Cronos (CRON), CV Sciences (CVSI), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Delic Holdings (DELCF), Delta 9 (DLTNF), Emerald Health (EMHTF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), FluroTech (FLURF), Gage Growth (GAEGF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Goodness Growth (GDNSF), Harborside (HBORF), Hemp (HEMP), Heritage Cannabis (HERTF), HEXO (HEXO), High Tide (HITIF), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), Inner Spirit (INSHF), InterCure (INCR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Relmada Therapeutics (RLMD), RYAH Group (RYAHF), Skye Bioscience (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Village Farms (VFF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).