Grow Life 420

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today released its unaudited financial results for the second quarter ended June 30, 2019. All financial information presented in this release is in U.S. dollars, unless otherwise noted.

Second Quarter 2019 Highlights and Subsequent Events

Revenue

• Second quarter revenue of $29.9 million, up 253% year-over-year and 42% quarter-over-quarter.
• Second quarter pro forma revenue¹ increased 55% quarter-over-quarter to $52.7 million, which includes the impact of pending acquisitions and investments.

EBITDA

• Second quarter Adjusted EBITDA² of $14.5 million, compared to $4.8 million in the prior-year period. Excluding the impact of biological assets, adjusted EBITDA for the second quarter was $2.3 million.
• Second quarter 2019 financial results included $3.2 million related to share-based incentive compensation, acquisition and other non-recurring costs of $3.2 million and $0.7 million in one-time charges related to the Company’s expansion in California.

Net Income

• Second quarter net loss of $3.9 million, compared to net income of $1.6 million in the prior-year period.

Balance Sheet

• As of June 30, 2019, the Company had total assets of $355.0 million, including cash and cash equivalents of $61.1 million and a working capital position of $128.7 million with zero debt on the balance sheet.

Operations

• The Company is operational in seven U.S. states, with binding transactions pending in New York, Massachusetts and Florida, as well as approved expansion into Michigan.
• The Company expects its acquisition of Origin House to close during the fourth quarter of 2019, which greatly expands its distribution network in California.
• Cresco received regulatory approval for its acquisition of Valley Agriceuticals, LLC., providing the Company with one of 10 vertically integrated licenses granted in the State of New York.

Talent

• Continued hiring top talent including a new Chief Information Officer and a new Chief People Officer, bringing total staff headcount to approximately 1,400 employees at the end of the second quarter of 2019, including pending acquisitions.

Management Commentary

“We delivered an outstanding quarter that reflects the leading positions we have established in some of the most attractive markets in the cannabis industry,” said Charles Bachtell, Co-founder and CEO of Cresco Labs. “We are seeing accelerating revenue growth driven primarily by market share gains and strong trends in registered patients in our established markets of Illinois and Pennsylvania, as well as our expanded presence and distribution in California. As we scale our operations in our established markets, we are seeing the positive impact on gross profit margin that we projected. The higher revenue and margins helped to drive a substantial increase in Adjusted EBITDA compared to the prior quarter.

“While our increasing profitability demonstrates our ability to effectively execute and leverage the attractive model we have developed, we continue to operate with a long-term perspective and make investments to position Cresco Labs to lead the cannabis industry in the years to come. We are transforming the retail cannabis experience with the national rollout of our Sunnyside* dispensaries, expanding into the CBD market with the launch of our WellBeings product line, and expanding our cultivation and retail operations in Illinois to capitalize on adult-use legalization beginning in 2020. As we continue to capitalize on the strong organic growth trends in our current markets and complete our pending acquisitions of Origin House and VidaCann, we expect to deliver continued improvement in revenue and profitability, resulting in further value being created for our shareholders,” said Mr. Bachtell.

Financial Results for the Second Quarter Ended June 30, 2019 (Unaudited)

Revenue for the second quarter of 2019 was $29.9 million, an increase of 253% compared to revenue of $8.5 million for the second quarter of 2018. The increase in revenue was driven by expansion into new markets and continued growth in the states where the Company operates. Second quarter 2019 revenue increased 42% compared to $21.1 million for the first quarter of 2019, primarily driven by higher revenue generated in Pennsylvania, Illinois and California. On a pro forma basis, revenue for the second quarter of 2019 increased 55% from the first quarter of 2019 to $52.7 million, which includes the impact of pending acquisitions and minority investments.

Second quarter 2019 operational gross profit², before the impact of biological assets accounting, was $14.4 million, or 48.1% of revenues, compared to $9.4 million, or 44.6% of revenues, for the first quarter of 2019. The improvement in operational gross profit margin was driven by greater scale in the Company’s established markets, increasing efficiencies in cultivation, processing and packaging, partially offset by the impact of initial costs associated with expansion into newer markets like California, Ohio and Arizona, where the Company expects to see higher margins as these operations continue to scale.

Total expenses for the second quarter of 2019 were $20.6 million, compared to $3.2 million for the prior year period. Total expenses in the second quarter of 2019 included $3.0 million in expenses related to share-based incentive compensation, $3.2 million in acquisition and other non-recurring costs and $0.9 million of depreciation and amortization. The balance of the increase represents investments made in talent and operational infrastructure to support the Company’s continued revenue growth.

Net loss for the second quarter for 2019 was $3.9 million, compared to net income of $1.6 million for the prior-year period. Current period net income included income tax expense of $5.6 million, primarily driven by discrete tax items related to the legal close of the acquisitions of MedMar Inc. and PDI Medical.

Adjusted EBITDA for the second quarter of 2019 was $14.5 million, compared to $4.8 million for the prior-year period. Excluding the net impact of the fair value of biological assets, Adjusted EBITDA for the second quarter of 2019 was $2.3 million.

Balance Sheet and Liquidity

As of June 30, 2019, the Company had total assets of $355.0 million, including cash and cash equivalents of $61.1 million and a working capital position of $128.7 million with zero debt on the balance sheet. Use of cash in the second quarter of 2019 included significant investments in the expansion of cultivation, processing and retail facilities in the Company’s existing markets, payments for the legal close of the MedMar Inc. and PDI Medical acquisitions, and funding provided to pending acquisitions to drive the continued development of facilities.

Conference Call and Webcast

The Company will hold a conference call and webcast to discuss its business and financial results on Wednesday, August 21, 2019 at 5 p.m. Eastern Time. The conference call may be accessed via Cresco’s investors website at investors.crescolabs.com or by dialing 866-688-4235 (409-216-0711 for international callers) and entering conference ID 3385937. Archived access to the webcast will be available for one year on Cresco’s investors website.

Consolidated Financial Statements 

The financial information reported in this news release is based on unaudited management prepared financial statements for the three and six months ended June 30, 2019. The Company will file its condensed interim consolidated financial statements on SEDAR by August 29th, 2019. Accordingly, such financial information may be subject to change. All financial information contained in this news release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes, to the extent that the financial information contained in this news release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this news release shall be deemed to be modified or superseded by the Company’s financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited financial statements for the year ended December 31, 2018, previously filed on SEDAR.

Cresco references certain non-IFRS financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-IFRS Financial Measures” section at the end of this press release for more detailed information.

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In 2012, the two states of Colorado and Washington sent shockwaves through the United States when they voted to legalize recreational cannabis. With these states legalizing, a domino effect has started around the country. As of 2019, the majority of states now have passed legalizations for recreational cannabis (11 states, including the District of Columbia), or medical cannabis (33 states).

People everywhere benefitted from these laws being passed. Consumers were able to go to the dispensaries for the first time to buy cannabis legally. Business owners set up dispensaries that people would flock to, and these businesses meant new employment opportunities for job seekers. Legal cannabis also saw revenue in cannabis-friendly states go nowhere but up.

With all of these new laws being passed in favor of cannabis comes a new awareness about the plant itself. More research about its medicinal qualities has come out in recent years. Cannabis is non-addictive and offers a variety of benefits for both medical and recreational users alike.

The Medical Benefits of Cannabis

Cannabis offers many medicinal qualities to patients for all kinds of conditions. Recently, the DEA considered the reclassification of cannabis as a Schedule 1 Controlled Substance. While they regrettably didn’t reclassify cannabis, they did express their support to the further research of the plant, and worked on processes to make it easier for researchers.

Over the years, many studies have been made as to just what sorts of conditions cannabis can treat. Medical cannabis can help people with the following conditions:

• People with epilepsy: Cannabis (notably the CBD found in the cannabis plant) can be a big helper for people suffering from epilepsy and seizures. Studies done on people taking Epidiolex (an FDA approved drug made of CBD) who were suffering from seizures experienced a mild drop in seizure occurrences.

• People with severe pain and inflammation: Cannabis can help treat pain, as the effects felt after smoking may help to relieve the feelings of pain people with chronic issues experience.

• People with eating disorders: Folks with eating disorders can benefit from cannabis, because it can increase a patient’s appetite and encourage them to eat more. 

• Cancer patients: Not only can cannabis help control the feelings of nausea associated with chemotherapy, but it can also help control the vomiting. Research suggests that cannabis might also be able to reduce or even kill cancer cells, and possibly even slow the growth of tumors.

• Depression: People who suffer from anxiety or depression can greatly benefit from cannabis. Cannabis can provide a feeling of happiness, and can help someone suffering from depression enjoy the little things more.

As you can see, cannabis offers medical patients a whole lot of healing qualities. What about recreational users, then?

The Recreational Benefits of Cannabis

Recreational cannabis has taken many states by storm. In some of the states where cannabis is legal, law enforcement has even seen a drop in drug related stops and arrests, as well as drops in drinking and driving incidents and violent crimes.

Recreational users experience several benefits from being able to enjoy cannabis. Not every recreational user is looking to “get stoned,” but rather enjoy the benefits offered by one of the most versatile plants on the planet.

• Liven up social gatherings. Someone having some friends over to their house might enjoy breaking out some cannabis and sharing it. Many friends and social circles were built on smoking together, and it is still a bonding experience among both friends and families today. 

• Have a great nightcap! There are many people in the world who start drinking the minute they get home from work to deal with the day’s stress. Recreational cannabis users look forward to going home and sparking up, then just enjoying some music or a good show on the couch. Another bonus: there are no hangovers from smoking cannabis. 

• Cannabis can bring out your creativity. Anyone who considers themselves creative can reap some benefits from cannabis. A lot of musicians, writers, artists, and actors get inspired after a good smoke. Certain strains can really unlock your creativity and get those neurons firing!

Now that you know some of the benefits offered by medical and recreational cannabis, you have to decide how you’re going to enjoy it.

Luckily, whether you choose to smoke or vape your weed, there are plenty of options around to enhance and personalize your cannabis experience.

Smoking Cannabis

Smoking is the tried and true method. It’s faster and a little cheaper initially than vaping. All you have to do is find your flower and put it in your preferred smoking device, and you’re off to the races.

Speaking of smoking devices, there is no shortage of them on the market. Beautiful glass pipes and water vases of all sorts of different designs, hookahs, and more are on offer for you to choose from at dispensaries and head shops. You can also just roll up a good old fashioned joint and pass it around.

Vaping Cannabis

Vaping has been in the public eye for a while in the form of nicotine delivery systems. Lately, legal states have sold a lot of cannabis vapes, too. You can choose from cannabis oil vaporizers or dry herb vaporizers.

Cannabis oil vapes are refillable tanks with batteries. You can buy your favorite type of THC or CBD oil and refill your tank whenever it gets low. These can be super convenient and very discreet.

Dry herb vapes are devices that heat up dried herb. These are perfect for relaxing at home. Just insert some fresh cannabis and press the button, and you’re good to go.

No matter which type of vape you want, you will have plenty of options available at your local dispensary or online. Many reputable and popular brands offer more vapor devices than ever nowadays, with popular kits like the Volcano Vaporizer for sale and more, you’ll find something that will agree with your personality and your wallet!

Puff, Puff, Pass

As we become more and more aware of the medical and recreational benefits of cannabis, more people will have access to it and more states will continue to legalize it. This is good news for anyone who is a cannabis enthusiast, or for anyone who depends on it for medical reasons.

What’s your story with cannabis? Are you a recreational or medical user, or maybe a little bit of both? Do you prefer smoking or vaping, and what are some of your favorite products?

DISTRICT OF COLUMBIA: Rep. Tulsi Gabbard (HI-02) introduced H.R. 3652, the Hemp for Victory Act which lays the foundation for the emerging hemp industry in a manner that incentivizes family farmers and small businesses, protects against corporate monopolies, and studies the benefits of hemp cultivation and hemp-based products while ensuring safe agricultural practices, and environmental and labor considerations.

“The hemp industry is poised to grow rapidly, having a billion dollar impact on the U.S. economy and creating thousands of jobs. Hemp-based materials have the potential to transform industries from health care to domestic manufacturing to affordable, sustainable housing construction, and more. Studies have shown it can play a role in helping remove toxins from our environment and prevent soil erosion, as well as provide alternatives to single-use plastics, which pollute our lands and ocean,” said Rep. Tulsi Gabbard. “My bill will lay the foundation for how we can optimize the hemp industry’s potential and ensure this opportunity benefits family farms and small businesses across America — from Hawai‘i to Kentucky and beyond.”

“Congresswoman Gabbard’s commitment to re-energizing the American farmer and delivering on the economic and planetary healing promise of the versatile, valuable hemp plant is exactly what our nation needs, and the time is now to support her bold efforts,” said Joy Beckerman, a board member with the Hemp Industries Association.

“We commend Congresswoman Gabbard for her leadership on introducing the Hemp For Victory Act,” said Eric Steenstra, President of Vote Hemp. “The fledgling hemp industry can create thousands of farming and manufacturing jobs but needs research and the same support given to other crops which the bill helps provide.”

Background: H.R. 3652, the Hemp for Victory Act of 2019, named after the World War II-era effort to revitalize the U.S. hemp industry, broadly addresses many aspects of the re-emerging U.S. hemp industry. The legislation’s objective is to build and encourage a national hemp industry, but to ensure that is done correctly, meaning that there are proper labor, consumer, and health standards; investment incentives; safe agricultural practices; environmental considerations; and more. At its core, the bill is aimed at providing opportunities for small businesses, family farms, indigenous populations, and veterans to participate in and prosper from this industry.

The bill will engage the expertise of several U.S. agencies, as well as land-grant universities, in order to lay the foundations of and generate the demand necessary for our hemp industry to ensure domestic economic potential is met across several sectors. Recognizing the potential for this commodity to grow into a multi-billion dollar industry, the bill directs the U.S. Departments of Agriculture, Health and Human Services, Defense, Labor, Housing and Urban Development, Veterans Affairs, Environmental Protection Agency, and Small Business Administration to conduct research and develop studies on the uses and benefits of hemp. This includes preservation and rehabilitation of our environment through toxic site cleanup and soil erosion control, sustainable and affordable housing, nutritional benefits to our children in school lunches and healthcare benefits to our veterans, alternatives to single-use plastics to reduce our ecological footprint, and the creation of thousands of jobs, among so many more.

Rep. Tulsi Gabbard was an original cosponsor of H.R. 3530, the Industrial Hemp Farming Act, a stand-alone bill in the 115th Congress which would have reclassified hemp as an agricultural crop. She supported H.R. 2, the Agriculture Improvement Act of 2018 — more broadly referred to as “the Farm Bill” — which passed both the House and Senate with strong bipartisan majorities and was signed into law. Among its many provisions, the bill legalized the production of industrial hemp and put its regulation under the U.S. Department of Agriculture.

Rep. Gabbard supports empowering local farmers and expanding their opportunities. She also joined a bipartisan amicus brief asking the Court to recognize and uphold the Congressional intent of prior legislation that allowed states to grow, cultivate, and research industrial hemp under specific conditions.

Marijuana use is one of the most heated topics among policymakers, government officials, medical professionals and the general public in the US. The fact that marijuana can be used for recreational as … Read the full article

Perhaps one of the more compelling arguments for legalizing medical cannabis is the fact that evidence heavily suggests that it is able to provide most of the benefits of widely-used opioids without … Read the full article

ISRAEL: Kupat Holim Meuhedet, Israel’s third largest health maintenance organization (HMO), announced yesterday that it was opening an internal cannabis unit using a digitalized system that will allow … Read the full article

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Last minute denial of service road expected to negatively impact “Protestival”

WASHINGTON: “The Seattle Hempfest is taking place this year but with an extreme burden that will be disruptive to waterfront businesses and locals in the area. Hempfest has made good faith efforts to negotiate solutions, but even the most modest accommodation has been rejected by Expedia and the Port of Seattle,” says Seattle Hempfest director, Vivian McPeak.

“Forty-five days before the event, Expedia informed us via the Port of Seattle that they are not allowing Hempfest access to the road it has used for 25 years to bring supply vehicles, vendors, and staff into the back of the event. Expedia is blocking access because they say Hempfest will interfere with their construction and employee vehicle traffic for a few days,” he continues. “First Expedia took away all of Hempfest’s parking, now they are declining access for its production.

This last-minute denial is costing Seattle Hempfest thousands of dollars in extra fees and is creating a logistical nightmare likely to lead to unnecessary traffic snarls on a major arterial along and near the central waterfront.” Over 100,000 attendees are expected at the August 16, 17, 18 Seattle Special Event, now in its 28th year, and the 25th year at its current venue, Myrtle Edwards and Centennial Parks.

Expedia’s denial of access may jeopardize the future of this historic event. “Expedia purchased the former Amgen facility that is adjacent to Centennial Park and is undergoing a massive development project. Seattle residents have been severely impacted by the recent relocation to the city by giant tech companies, threatening the city’s culture, history, and historic buildings as gentrification and congestion runs rampant across the city,” says McPeak. “Expedia is apparently willing to end Hempfest rather than endure a few days of temporary inconvenience.”

At Expedia’s bidding, the Port of Seattle, which issues a permit for Hempfest to use Centennial Park, is only granting Hempfest use of the north service road Alaska Way West between the hours of 7 PM and 4 AM ―impossible hours to load event equipment such as staging, fencing, scaffolding, portable toilets, tent canopies, and wash stations in and out of the venue. Even the most meager requests, such as a few band parking spots, have been ignored by Expedia.

Organizers believe Expedia is working to end the world-renowned free speech event.  Hempfest supporters have created a MoveOn.org boycott petition.

Marijuana use is one of the most heated topics among policymakers, government officials, medical professionals and the general public in the US. The fact that marijuana can be used for recreational as … Read the full article

Perhaps one of the more compelling arguments for legalizing medical cannabis is the fact that evidence heavily suggests that it is able to provide most of the benefits of widely-used opioids without … Read the full article

ISRAEL: Kupat Holim Meuhedet, Israel’s third largest health maintenance organization (HMO), announced yesterday that it was opening an internal cannabis unit using a digitalized system that will allow … Read the full article

Endocanna Health Creates New Paradigm of Personalized Medicine Connecting Human DNA with Cannabis Genetic Profiles CALIFORNIA: Endocanna Health this week launches its "Cannabinoid DNA Variant … Read the full article