Marijuana Stocks Morning Briefs: Canopy Growth Goes Yukon, Green Bits Big Green, MassRoots Struggles
Tossing a few back is Canopy Growth Corporation (TSX:WEED), who announced on Wednesday a new deal with Yukon Liquor Corporation. The agreement has Canada’s most prominent Licensed Producer supplying Yukon with cannabis products for the country’s adult-use market which is set to become legal later this year. According to a statement, Canopy will supply Yukon with up to 900 kg of cannabis over a three-year period.
The deal is Canopy’s fifth with province or territory, alongside partnerships in Manitoba, Newfoundland and Labrador, Quebec, and other regions. Assuming the necessary regulatory frameworks are put into place, both sides expect the deal to go off without a hitch.
"We're proud to be collaborating with the Government of Yukon to ensure a consistent and safe supply of our high-quality cannabis products once the adult retail market opens," said Mark Zekulin, President of Canopy Growth in a statement. "Being the national supplier of choice requires presence and partnerships across the country and supplying Yukon is an important part of that vision."
Cannabis Point-of-Sale Platform Green Bits Raises $17 Million
Seeing green is retail management and automated compliance platform Green Bits, who completed a $17 million Series A round of financing recently. The company helps marijuana dispensaries run their businesses both more efficiently and legally, according to a statement. Funding was led by New York-based investment firm Tiger Global and brings the company’s total outside funding to $19.3 million.
Green Bits, who in the past year has expanded into seven new states, plans to use the funds for sales, marketing, and product development purposes, as well as to continue expansion into new geographic markets.
"We are honored and excited to have Tiger Global join our team. We have grown quickly in a short period, and this new capital will allow us to exponentially accelerate our growth. Our goal is to be in every state that has legalized cannabis in some way," remarked Ben Curren, co-founder and chief executive officer of Green Bits in a statement.
MassRoots Down $44 Million
A tumultuous year in the boardroom in 2017 cost MassRoots Inc. (OTCMKTS:MSRT) more than bad headlines. According to The Cannabist, the company’s annual filing with the U.S. Securities and Exchange Commission, made this past Tuesday, shows a net loss of $44 million for the year. The report goes on to say that MassRoots is missing IRS payments, handing out stock compensation to the point that it is basically worthless, and continues to miss SEC filing deadlines. The company, in other words, is in complete dire straits.
“We do not believe MassRoots has sufficient capital to become cash-flow positive from operations,” company officials noted in the filing, according to The Cannabist. “We expect to need to raise additional funds to continue to fund operations.”
Additionally, MassRoots owes $1.6 million in payroll tax liabilities, which also includes both interest and penalties. The Cannabist reports that those should be settled by June 30.
The Economics of Legal Marijuana Markets
Courtesy of our friends at Grizzle, the following infographic takes an in-depth look at how “supply from the black-market and legal home grown will continue to weigh down the marijuana industry.” Grizzle writer and President Thomas George goes on to note three reasons why legal marijuana may still have a rocky road ahead:
- Legal producers are burdened by security, testing and packaging costs.
- Black market and home grown are tax free.
- Very strong returns on invested capital for the black market and home grown are a powerful incentive for increased supply.
It is an amazing infographic that everyone should take a look at: