Cannabis Briefs for May 26, 2020May 26, 2020
•Canadian producer Aurora will enter the U.S. market by acquiring Reliva, a Massachusetts-based CBD company. Aurora will pay approximately $40 million in an all-stock transaction. The deal also includes a potential earn-out of up to a maximum of $45 million payable in shares or cash over the next two years, contingent on Reliva hitting financial targets. It is expected to close next month. In its fiscal third quarter ended in March, Aurora posted net revenue of C$78 million ($56m), up 18% from the previous quarter, with adjusted EBITDA registering a loss of C$46 million ($33m). The company says it’s on target for positive adjusted EBITDA in the first quarter of its 2021 fiscal year, which begins in July.
•New York-based multistate operator Acreage Holdings announced that it expects to take a pretax, non-cash charge of $80-$100 million based on planned operational changes. The company has undertaken a number of cost cutting measures recently, including furloughing 122 workers last month. It has also sold a medical operation in North Dakota and undeveloped real estate in Massachusetts in an attempt to achieve positive EBITDA for 2020.
•Columbus, Ohio-based CBD retailer Green Growth Brands has filed for bankruptcy. The company has faced a sustained cash crunch and recently began selling off the majority of its CBD assets. In its bankruptcy announcement, the company blamed Covid-19 for intensifying its financial difficulties. Former chief executive Peter Horvath was recently named CEO at High Times Holding Corp.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.