Green Growth shares sink after reporting steep Q2 loss, sale of CBD business

Shares of U.S. cannabis operator Green Growth Brands plunged more than 30 per cent on the Canadian Securities Exchange on Tuesday after the company said it lost US$34.8 million in its second quarter, while reporting US$21.1 million in revenue. The company also said it planned to sell its CBD business for an undisclosed sum to The BRN Group, a “related party transaction” as both companies share founding members. Green Growth, which postponed its post-results conference call with analysts, said the sale will include a ‘stalking horse agreement’ allowing it to shop around for a better offer over the next 30 days. Green Growth also reported a corporate “reorganization” aimed at saving US$4 million in costs.

Valens notches quarterly profit while boosting revenue amid rising interest in cannabis infused products

Cannabis extractor Valens GroWorks has the rare distinction of being one of the few profitable companies in the Canadian pot industry. Valens reported its fourth-quarter results late Monday that showed it made a $4.4 million profit while reporting $30.6 million in revenue. The company said it booked revenue at $1.25 per gram of input in its fourth quarter, compared to $0.61 per gram of input in the prior three-month period. Valens also said it processed 61,394 kilograms of dried cannabis and hemp biomass while striking white-label deals with several firms including BRNT and Shoppers Drug Mart.

Analyst sees conflicting clues on pot industry’s future in quarterly reports

Green Growth and Valens’ quarterly results may appear different, but they both offer clues on where the pot sector is heading. Eight Capital analyst Jenny Wang told BNN Bloomberg that as Valens has opted to focus primarily on compelling consumer-driven products in the legal market, Green Growth has pursued growth through acquisitions and retail expansion across the U.S. Now, with capital market interest in the pot sector drying up, Green Growth is having a more difficult time executing on its strategy, Wang said. Meanwhile, Valens’ bottom line got a boost thanks to cheaper wholesale pot prices in Canada, which is in the midst of an oversupplied market.

Cannabis retailers secure paperwork needed to open new pot shops in Ontario

Some of Canada’s cannabis retailers are revving their engines for a stronger footprint in Ontario. Hobo Cannabis, which is owned by pub and nightclub operator Donnelly Group, said it secured 12 new retail locations in the province after it obtained operator licences from regulators. Hobo said in a statement it will have a total of 15 stores in Ontario, 10 of which will be located in the Toronto-area. Meanwhile, Mihi announced earlier this week that it received an operator licence from the Ontario regulator, although it didn’t disclose where its location would be. Thunder Bay also appears set to have a couple new stores opening, according to a local news website.
 

DAILY BUZZ

US$10.4 million
-- The amount in tax revenue generated by Illinois’ cannabis industry in its first month of legal recreational pot sales, according to the Illinois Department of Revenue.

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