MJardin Receives Cultivation and Processing License at Second Ontario Facility

The facility, located in Dunnville, is a joint venture between MJardin Group (75%) and Grand River Organics (25%).

February 21, 2020

TORONTO and DENVER, Feb. 19, 2020 (GLOBE NEWSWIRE) -- PRESS RELEASE -- MJardin Group, Inc., a cannabis producer, has announced that one of its indoor cannabis cultivation facilities “GRO”, located in Dunnville, Ontario, has received its cultivation and processing license from Health Canada. The facility is a joint venture between MJardin Group (75%) and Grand River Organics (25%).

The 11,000-square-foot facility is estimated to produce 1,200 kg of premium flower and 396 kg of trim for a total of 1,596 kg of product per year and is expected to reach full production capacity in Q3 2020. “GRO” houses five compartmentalized flower rooms of equal size. The facility is equipped with optimal HVAC and fertigation systems that will ensure workflow efficiency and consistency in cultivation of product.

“We are pleased to have reached this important milestone and are eager to begin cultivating at this facility,” said Pat Witcher, CEO of MJardin Group. “Our Canadian footprint continues to successfully come online via cultivation and sales of our high THC premium product and we look forward to reaching even more of the market in 2020 with our strategic partners. This is a very exciting time for our group.”

The company has been awarded four cultivation licenses and two sales licenses in the Canadian portfolio and eagerly anticipates the completion of construction and full roll-out of its Canadian assets.

FSD Pharma Generates $7.7 Million in Proceeds and 670% Return on Investment Through Sale of Interest in Cannara Biotech

The company has sold its 12% equity interest in Cannara Biotech Inc.

February 21, 2020

Posted by Melissa Schiller

Business and finance Canada Mergers and Acquisitions News

TORONTO (February 20, 2020) – PRESS RELEASE – FSD Pharma Inc. has announced the sale of its 12% equity interest in Cannara Biotech Inc. to a consortium of buyers for cash proceeds of more than $7.7 million.

The terms of the share sale transaction were negotiated at arm's length with a group of buyers that included entities controlled by members of the Cannara board and senior management. A substantial portion of FSD Pharma's shareholdings in Cannara were subject to a statutory escrow expiring December 2021. Under the terms of the share sale transaction, the buyers agreed to acquire FSD Pharma's interest subject to escrow and, as such, assumed all of the associated market risk. The share sale transaction represents a 670% return on the company's stake in Cannara.

"This is a very positive milestone for the shareholders and stakeholders of FSD Pharma to recognize a 7x return in less than two years," stated Raza Bokhari, MD, executive co-chairman and CEO. "This transaction represents, which I hope is the first of others that will follow to strengthen our cash position on the balance sheet. Our aim is to scale up to $50 million in disposable cash through monetizing our non-cash assets and raising new capital from institutional and institutional grade investors in the United States and elsewhere."

For further details on the share sale transaction, please refer to FSD Pharma's Early Warning Report, which will be available under Cannara's SEDAR profile at www.sedar.com.

Chinnapong | Adobe Stock

CBN, CBC and Acidic Forms Found to Kill Colon Cancer Cells

A new pre-clinical study from Cannabics Pharmaceuticals finds CBN, CBC and their acidic forms to be effective against human colon cancer cell lines.

February 21, 2020

Andrea Sparr-Jaswa

International Medical Cannabis News

Last week, Cannabics Pharmaceuticals announced new pre-clinical findings on the cannabinoids cannabinol (CBN) and cannabichromene (CBC) and their acidic forms, CBNA and CBCA, demonstrating their efficacy against human colon cancer cells.

Necrotic effect of CBN on Colon Cancer: Nuclear (blue) and Necrosis (yellow) dyes were analyzed using fluorescent microscopy. Left: untreated cells. Right: cells treated with CBN.

The new research builds on previous investigations by the U.S.-run company whose Israeli research labs focus on understanding and developing personalized cannabinoid medicine for cancer and the side effects of conventional cancer treatment.

What Is CBN?

This mildly intoxicating cannabinoid is a natural byproduct of Δ9-tetrahydrocannabinol (THC), the primary psychoactive component of non-hemp cannabis cultivations. It is formed when THC, or its parent cannabinoid cannabigerol (CBG)—notably found in higher concentrations in hemp cultivations—are exposed to oxygen and light.

Similarly, CBNA is the non-intoxicating oxidative byproduct of these cannabinoids still in their acidic forms, THCA and CBGA.

Generally found in minute amounts, CBN content in cannabis flower can increase over time and with improper storage. However, unlike a bottle of wine soured from exposure to air, cannabinoids don’t go “bad” in the traditional sense; they simply change into new types with their own mechanisms of action and potential for therapeutic effects.

In its neutral or heated form, CBN has a higher affinity than THC for CB₂ receptors which are predominantly expressed by the immune system. Research, like the 2009 investigation published in Expert Reviews in Molecular Medicine, has shown an emerging role for CB₂ receptors in immune system balance and therapeutic modulation. A 2017 review of the molecular targets of phytocannabinoids also mentions that, like CBG, CBN engages with the menthol receptor TRMP8 in a manner relevant to colon cancer therapy.

What About CBC?

Stemming from a recessive gene variant, cannabis plants rich in CBC are rare; but many cultivations have measurable amounts. While prolific breeding efforts may yet produce CBC-rich plants in full flower, research describes substantial quantities of this cannabinoid at flower maturity as uncommon, whereas higher concentrations have been found during vegetative stages.

Like CBG, a lack of affinity for the cannabinoid receptor associated with intoxication, CB₁, allows CBC to work without hampering physical and cognitive functioning. With activity similar to that of CBN and CBG, as described in the molecular target study linked above, CBC’s engagement at menthol receptors may also play a role in its ability to propel colon cancer cell death, as demonstrated in the Cannabics Pharmaceuticals study.

Canopy Growth Reports Third Quarter Fiscal 2020 Financial Results

The company generated $124 million in net revenue, up from $76 million in Q2 2020.

February 21, 2020

Posted by Melissa Schiller

Business and finance Canada News

SMITHS FALLS, ON, Feb. 14, 2020 /CNW/ - PRESS RELEASE - Canopy Growth Corporation has announced its financial results for the third quarter ended December 31, 2019. All financial information in this press release is reported in millions of Canadian dollars, unless otherwise indicated.

Third Quarter Fiscal 2020 Corporate Financial Highlights

Revenues: Reported Net Revenues increased 62% over Q2 2020, or 13% excluding the impact of portfolio restructuring charges. Gross Recreational B2B revenue increased 8% over prior quarter due, in part, to over 140 stores becoming active in the quarter and higher sales of premium dried flower and pre-roll joints. Our acquired businesses including Storz & Bickel and This Works also performed well, contributing to organic growth this quarter.
Gross margin: Gross margin before fair value impacts was 34%. Gross margin performance in quarter benefited from lower period costs due to higher facility utilization
Operating expenses: Total operating expenses decreased 14% versus Q2 2020 primarily due to a $20 million reduction in G&A expenses and over $31 million lower stock-based compensation versus the prior quarter
Adjusted EBITDA: Adjusted EBITDA loss of $92 million, a $64 million narrower loss versus Q2 2020 driven by higher sales, improved gross margins and lower operating expenses
Cash Position: Gross cash balance was $2.3 billion, down from $2.7 billion in Q2 2020, reflecting the EBITDA loss, capital investments and M&A

Third Quarter Fiscal 2020 Business & Operational Highlights

Maintained leading market share in retail, at an estimated 22%, of the Canadian recreation market as we saw a strong demand for both premium and value priced dried flower and pre-rolled joints
Continued market share gains and increase in the number of patients, to over 76,700, in the Canadian medical cannabis market
Named David Klein as new Chief Executive Officer
Completed first shipments of cannabis-infused edible chocolates and JUJU Power 510 batteries in December 2019
Storz & Bickel expanded product line with launch of Crafty+ vaporizer in November 2019
Announced initial line of First & Free Hemp-derived CBD products and began sales online through www.firstandfree.com, one quarter ahead of Q4 2020 target

"In Q3 we executed across Canada, in our international markets and in our strategic acquisitions to drive revenue growth," said David Klein, CEO. "We have a lot of work to do. We are eager to capitalize on the opportunity to create an unassailable position through a tight focus on the consumer and on critical markets."

"We delivered significant gross improvement in the third quarter driven by stronger revenues and higher capacity utilization. Actions taken earlier this year are expected to meaningfully reduce stock-based compensation in FY21, and we have started to implement tighter cost controls across the organization," said Mike Lee, EVP & CFO. "We plan to take further steps to reduce our costs and right-size our business to ensure that we can generate a healthy margin profile and cash generation in the coming years."

Canadian Cannabis

Recreational B2B sales increased 8% over Q2 2020, due to over 140 stores becoming active in the quarter and higher sales of premium dried flower and pre-roll joints
Recreational B2C sales increased 16% over prior quarter, due in part to an 11% increase in same store sales
Medical sales increased 5% over the prior quarter primarily attributable to the broadening of our brand and product offerings, including the availability of products from additional CraftGrow partners, as well as an increase in number of customers to over 76,700.

International Cannabis

C3 revenue increased 5% over Q2 2020
Germany cannabis sales higher than expected due to opportunistic sales into the German market to fill a supply gap that resulted from a regulatory enforced sales halt of cannabis products offered by another vendor

Strategic Acquisitions

Storz & Bickel vaporizer revenue increased 46% over Q2 2020 due to solid organic growth and seasonal sales
This Works revenue increased 42% over prior quarter due to strong organic growth

Non-IFRS Measures

Gross margin percentage, before fair value impacts in cost of sales, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. This measure is calculated as net revenue less inventory production costs expensed to cost of sales, divided by net revenue, and may be computed from the consolidated statements of operations presented within this news release.

Adjusted EBITDA, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair value changes and other non-cash items, and further adjusted to remove acquisition-related costs. The Company attributes Adjusted EBITDA to its operations and corporate overhead, strategic investments and business developments, and non-operating or under-utilized facilities. The Adjusted EBITDA reconciliation is presented within this news release and explained in Management's Discussion & Analysis under "Adjusted EBITDA (Non-IFRS Measure)", a copy of which will be filed on SEDAR.

Free Cash Flow, a non-IFRS measure, is a key operational metric that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. This measure is calculated as net cash provided by (used in) operating activities less purchases and deposits of property, plant and equipment.

Transition to U.S. GAAP Reporting

As part of our U.S. financial reporting requirements, Canopy Growth confirmed that, as of September 30, 2019, it no longer met the criteria for qualification as a foreign private issuer because (1) more than 50% of the outstanding voting securities are held by residents of the United States, and (2) the majority of Canopy Growth's directors are United States citizens.

Therefore, as of April 1, 2020 Canopy Growth will be considered a United States domestic issuer and a large accelerated filer. As a result of this change, as of April 1, 2020, Canopy Growth will be required to prepare its consolidated financial statements, including the Company's March 31, 2020 audited annual consolidated financial statements, in conformity with United States generally accounting principles, with such change being applied retrospectively. The extent of the impact of this change in accounting framework has not yet been quantified. Canopy Growth will also be required to provide an auditor attestation report under Section 404(b) of the Sarbanes-Oxley Act.

This press release is intended to be read in conjunction with the Company's Unaudited Condensed Interim Consolidated Financial Statements ("Financial Statements) and Management Discussion & Analysis ("MD&A) for the three and nine months ended December 31, 2019, which will be filed on SEDAR (www.sedar.com) and will be available at www.canopygrowth.com. The basis of financial reporting in the Financial Statements and MD&A is in thousands of Canadian dollars, unless otherwise indicated.

Cannara Insiders Form Buying Group to Fully Acquire FSD/FV Pharma's Position in Cannara

The insiders' increased stake in Cannara coincides as cultivation is poised to commence.

February 21, 2020

Posted by Melissa Schiller

Business and finance Canada Mergers and Acquisitions News

VANCOUVER, Feb. 20, 2020 /CNW/ - PRESS RELEASE - Cannara Biotech Inc. has announced a buying group which includes Javaa Private Equity Inc. has collectively acquired a total of 85,003,250 common shares from FSD/FV Pharma Inc., the majority of which remain in escrow, stemming from Cannara's go-public transaction a year ago. This $7.7 million transaction ensures a smooth transition of approximately 12% of Cannara's issued and outstanding common shares.

Post transaction, FSD/FV Pharma holds no remaining interest in Cannara and Dr. Sara May, the president of FV Pharma Inc. will step down from the company's Board of Directors. The company is evaluating alternative independent directors and will fill the vacancy in a timely fashion.

"The buying group, a combination of insiders and independent, third party investors who understand Cannara's potential and the progress it has made since going public, are committed to the company's strategic plan of being a leader in Quebec's cannabis landscape," said Lennie Ryer, CFO of Cannara. "With last month's license granted from Health Canada, we are now poised to begin full cultivation operations at Phase 1 of the Farnham facility, with an annual capacity of 20,000 kgs of premium, indoor grown cannabis."

Following their acquisition of 8,161,626 common shares of Cannara in the transaction, Javaa now holds 242,167,820 common shares of Cannara representing approximately 34.3% of the issued and outstanding common shares. The shares of Cannara acquired by Javaa are held for investment purposes. Javaa may in the future purchase or sell shares of Cannara or otherwise trade in securities of or engage in other transactions with respect to Cannara depending on a number of factors, including but not limited to, Cannara's financial position, the price levels of the common shares of Cannara, conditions in the securities markets and general economic and industry conditions, Cannara's business or financial condition, and other factors and conditions Javaa deems appropriate.

For further information, a copy of the Early Warning Report to which this press release relates can be obtained from Cannara's SEDAR profile at www.sedar.com.

What Is CBN?

What About CBC?

Legislative Map