Cannabis multistate operator Acreage Holdings obtained a $15 million short-term mortgage with an eye-popping 60% yearly interest fee. The secured notice, obtained from an unidentified institutional investor, matures in 4 months.
MJBizDaily takeaway: That astronomical interest fee, which required Acreage to place up as collateral its marijuana enterprise amenities in three states in addition to its mental property, signifies the corporate wants money – in a rush.
“A 60% annual rate is extremely high even for cannabis, where the capital crunch has made rates of 10%-20% common,” mentioned Mike Regan, an fairness analyst and managing member of Denver-based MJResearchCo.
“This sounds more like a payday loan with $3 million in interest to borrow $15 million for four months and implies that Acreage needs the cash right now despite the $60 million financing announced only two weeks ago.”
Big Tobacco goes bust
The first Big Tobacco firm to enter the marijuana and hemp sectors, Morrisville, North Carolina-based Pyxus International, filed for chapter safety, claiming the coronavirus pandemic prompted its monetary issues.
MJBizDaily takeaway: As shoppers draw back from inhaled merchandise together with tobacco cigarettes through the respiratory-related COVID-19 outbreak, hashish firms which have relied on related smokable choices corresponding to pre-rolls ought to take notice and plan accordingly.
Missouri vegetation MMJ
Missouri regulators authorized the primary medical hashish firm to start cultivating MMJ within the state, which ought to result in a gross sales launch within the fourth quarter of 2020. A second grower additionally was authorized.
MJBizDaily takeaway: Plants within the floor is nice information for Missouri’s hashish trade. Growers had been supposed to start operations within the spring, however the coronavirus pandemic threw a wrench within the works.
Marijuana Business Daily estimates the market will generate $300 million in annual gross sales inside a number of years of its launch, supplied it could possibly overcome pending authorized hurdles.
New knowledge reveals blended gross sales numbers
Sales in sure hashish markets that aren’t counting on tourism, corresponding to Oregon and Washington state, have elevated through the coronavirus pandemic, however others – together with California, Colorado and Nevada, which have a superb quantity of vacationer visitors – aren’t faring as nicely.
MJBizDaily takeaway: Those sturdy numbers for states that depend on in-state consumption are testomony to the hashish market’s resiliency throughout an financial downturn in markets that draw on native shoppers.
But tourism-dependent economies may endure throughout a recession, and the marijuana market will doubtless not be proof against taking a success from a scarcity of tourists.
Some hashish firms in states corresponding to Nevada have targeted efforts on catering to native shoppers, as an illustration, providing loyalty applications. Marketing to encourage purchases from these in-state prospects is one approach to drive income.
Drug large takes up CBD
Major world drug producer Perrigo Co., based mostly in Dublin, Ireland, is expanding into the CBD market by a brand new partnership with Colorado CBD producer Kazmira.
Perrigo has invested $50 million for a 20% fairness stake in Kazmira.
MJBizDaily takeaway: While it appears Perrigo isn’t within the marijuana market – its CEO told Business Insider as a lot – the truth that one of many world’s largest producers of over-the-counter medicine is getting into the CBD area ought to be famous by each the hemp and MJ industries.
The firm’s sheer distribution attain and manufacturing energy put it at a big benefit, and the corporate’s debut alerts Big Pharma’s interest in CBD.
Canadian hashish oil exports surge
Exports of Canadian hashish oil merchandise jumped fivefold in 2019 over the earlier 12 months.
Overall, 5,372.Three liters of hashish oil merchandise had been exported for medical and scientific use in 2019.
Australia was the highest vacation spot, with roughly 3,700 liters (977 gallons) shipped there in 2019. Germany and Denmark had been second and third, respectively. The three markets accounted for 90% of all exported oil merchandise.
MJBizDaily takeaway: Though the numbers look spectacular, Canadian firms have thus far didn’t convert worldwide orders into significant income drivers.
Furthermore, many of the shipments went to 1 market, Australia, which itself is eager on changing into a web exporter.
That means Canadian exporters are going to should diversify in the event that they hope to maintain world momentum.
Bart Schaneman might be reached at [email protected]
International editor Matt Lamers contributed to this report.
For more of Marijuana Business Daily’s ongoing protection of the coronavirus pandemic and its results on the hashish trade, click on right here.