It’s time for your Daily Hit of cannabis financial news for October 26, 2021.
On The Site
MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) announced the appointment of Roz Lipsey to the role of Chief Operating Officer. She succeeds Tim Bossidy, who has served as interim Chief Operating Officer since 2020. Ms. Lipsey has served on MedMen’s executive management team since 2020 in the role of Senior Vice President, Business Operations, and brings more than 25 years of operational experience, focusing on business start-up, scaling, and strategy.
The appointment comes during the midst of the company’s saucy trial with former CFO James Parker. The trial began last week and testimony from Parker continued on Monday. According to Law360, Parker expanded upon his first day of testimony regarding moving cannabis across state lines. The report stated that Parker was sure that MedMen had stocked a Nevada grow house with cannabis plants that were grown in California. Interstate transportation of cannabis is illegal even if cannabis is legal within the state. In 2018, MedMen opened a 45,000-square-foot facility near Reno. The facility recently announced that it was going to be grown under a new company called LitHouse. LitHouse will expand its current California production, enter the Nevada market for the first time and produce flower for MedMen’s private label line MedMen Red. MedMen also has three dispensaries in Las Vegas.
Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM) is buying Illinois-based Innovative Growers Equipment Inc. for approximately $58 million. The deal is expected to close in early November 2021. At the same time, Hydrofarm also released preliminary third-quarter results and gave guidance for the full year of 2021.
Hydrofarm reported that its net sales will range between $121.0 million to $124.0 million for the three months ending September 30, 2020 versus last year’s $96.7 million. This is increase of approximately 27% was driven entirely by M&A growth. The net income is expected to range between $13.3 million and $18.3 million, versus last year’s net income of $2.7 million for the same time period. The adjusted EBITDA is estimated to be between $14.4 million to $16.4 million versus last year’s $7.4 million, an increase of approximately 108%.
Stem Holdings, Inc. d/b/a Driven by Stem (OTCQX: STMH) (CSE: STEM) is buying High Country Supply also known as Colorado Harvest Company, one of Denver’s oldest and most respected vertically-integrated operators with two delivery permits, three retail dispensaries, and two cultivation facilities. The purchase price of the acquisition was not disclosed, however, CHC is expected to generate over $13 million in revenues in 2021, with a projected gross margin of $5,070,000, upon completing over 180,000 retail transactions.
In Other News
Eaze, the nation’s largest cannabis delivery marketplace, today opened applications for its award-winning Momentum business accelerator to cultivate underrepresented cannabis businesses nationally. BIPOC, women, LGBTQ+ and military veteran founders across the country can apply now to this award-winning program. Now in its third year, Momentum’s national focus reflects Eaze’s multi-state expansion into Michigan and recent acquisition of Colorado and Florida retail leader Green Dragon.