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Cannabis Briefs for September 17, 2019

September 17, 2019

•The House of Representatives will take a full floor vote on the SAFE Banking Act by the end of the month, according to a spokesperson for Majority Leader Steny Hoyer. The bill would protect banks from prosecution for providing banking services to legal cannabis businesses, a concern that causes the industry to operate almost entirely in cash. The bill cleared the House Financial Services Committee in March and currently has over 200 co-sponsors.

•Cresco Labs has agreed to acquire Las Vegas, Nevada-based Tryke Companies for $252.5 million, approximately $55 million of which will be paid in cash. Tryke is a vertically integrated grower and seller with six retail locations in Nevada and Arizona, including its Reef Dispensary adjacent to the Vegas strip, which brought in $14.5 million this year through August 31. The company generated $70.4 million in revenue in fiscal 2018 and managed an EBITDA of $24.6 million. The deal will also add another 17,000 pounds of annual cultivation capacity to Cresco’s operations and includes one of only eight cultivation licenses recently awarded in Utah. The transaction will give Cresco approximately an 8% share of the Nevada market.

•Aurora Cannabis has reported results for the fiscal quarter and year ended June 30. Quarterly revenue jumped to C$98.9 million ($75m), up from C$65.1 million ($49m) the quarter before. Nonetheless, the company reported an EBITDA loss of C$11.7 million ($8.8m) for the quarter. Net revenue for the fiscal year totaled C$247.9 million ($187.2m), a 350% increase from fiscal 2018. Notably, Aurora produced 57,442 kg of cannabis in fiscal 2019 but only sold 36,628 kg despite the Canadian market experiencing supply shortages. “While retail distribution in key provinces has been a constraint in fiscal 2019, we will see retail infrastructure expand in 2020 through the launch of new brick-and-mortar stores across Canada,” said CFO Glen Ibbott. “With more stores, we expect to see further consumer engagement.”

•Los Angeles-based Float Technologies is launching FreeLeaf, billed as the world’s first flavored, odorless cannabis product line. In addition to flower that has no smell or taste, FreeLeaf also features a line of “culinary cannabis,” edible cannabis flower in flavors Rosemary-Jane, Hazy Thyme, and Blunt Basil, among others. The brand includes pre-rolled joints in lavender, mint, and clove flavors. FreeLeaf will debut at the Budberry Dispensary and Lounge in West Hollywood.

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