Reviewing the Cover Progress Ecosystem – New Hashish Ventures


This can be a copy of the July seventh version of our weekly Publication, which we’ve got been publishing since October 2015.


This weeks’s announcement by Cover Progress that its Board of Administrators had eliminated Co-Founder Bruce Linton from the corporate he began seven years in the past stunned the business. We’re unhappy for our pal and colleague with how his time got here to an abrupt finish and congratulate him for all that he did for the corporate and the worldwide business.

Change on the prime is nothing new for the sector, as a number of LPs have seen management modifications by means of consolidation in addition to inner modifications. Aphria introduced in outsider Irwin Simon, who continues to be Interim CEO however seemingly, in our view, to shed the “interim” shortly. Aurora Hashish moved CEO and Co-Founder Terry Sales space beneath the Government Chairman. CannTrust named Peter Aceto to exchange its founder late final yr. Two years in the past, Organigram introduced in a brand new CEO, Greg Engel, who changed its founder. In fact, Tilray had earlier changed him as CEO. These firms are 6 of the present 7 main LPs when it comes to income, and there are examples from different firms as effectively.

Whereas traders definitely wish to know what lies forward for Cover Progress, there’ll seemingly be some uncertainty till a brand new CEO is called. In our view, the corporate ought to be capable of appeal to some unbelievable expertise, and we sit up for seeing this course of play out. Within the meantime, new CFO Mike Lee, a Constellation veteran, definitely has his eye on the ball. We extremely suggest that readers evaluate his strategic priorities that he shared on the convention name final month. Particularly, he known as for reviewing the worldwide ERP technique, strengthening monetary reporting and controls and accelerating acquisition integrations. All of that is designed to create scalable progress, and we anticipate that the brand new CEO picked by Constellation will probably be one the corporate expects can drive progress in a extra scalable method than the corporate has executed so far.

Within the quick aftermath, NY Consultant Chuck Schumer was fast to affirm that Cover Progress will probably be continuing with its New York hemp actions, as reported by Marijuana Second. Cover Progress has an intensive ecosystem of strategic companions, and we expect it could be smart for traders in these firms, a lot of that are publicly-traded, to affirm that these relationships will proceed beneath the brand new management. To be very clear, we’ve got no cause to imagine that they gained’t, however we wish to make sure that our readers are conscious of the a number of firms which may be going through some uncertainty throughout this management transition at Cover Progress.

On the prime of the checklist is Cover Rivers, which additionally dismissed Linton from his roles there. The corporate was Bruce Linton’s thought, and it seeks to leverage Cover Progress’s infrastructure and capital by offering monetary and working assist to firms throughout the business. Cover Progress owns 27% of the issued shares and over 85% of the voting energy.

One other apparent query is what the change means for Acreage Holdings. We checked in with CEO Kevin Murphy, who is very optimistic that the affiliation will proceed. As a reminder, he and his shareholders simply acquired an choice cost of $2.63 per share ($300 million in complete) for a future potential acquisition when permissible at a the fastened share value of .5812 shares of Cover for every share of Acreage. We interviewed Murphy earlier this yr, and he shared his expectation that in the end Constellation will purchase in each Cover Progress and his firm.

Cover Progress has two vital stakes in U.S. operators past its association with Acreage Holdings, together with non-voting inventory in TerrAscend in addition to warrants in SLANG Worldwide. One space the place the corporate has solid a number of strategic partnerships is in extraction, with suppliers together with MediPharm Labs, Neptune and Valens GroWorks, all publicly-traded, in addition to HollyWeed North, which is predicted to debut in public buying and selling close to the top of the yr.

Whereas many have been stunned by the sudden transfer by the Cover Progress Board of Administrators, we expect traders ought to be ready for extra modifications forward after a interval of considerable M&A and capital elevating and an evolving market that’s turning into extra international and supported by institutional traders.

In contrast to the enterprise mannequin of most operators, DionyMed is a multi-state cannabis distribution and direct-to-consumer supply platform that is bringing as we speak’s main cannabis manufacturers to shoppers. Growing each wholly owned in-house manufacturers and promoting a curated portfolio of associate manufacturers to over 900 retail dispensaries throughout the nation, DionyMed is discovering success because it scales up. The corporate lately acknowledged Q1 income of $14.4M and has signed three agreements to amass and increase into new markets.

To study extra about DionyMed, also called DYME Manufacturers, a consumer of New Hashish Ventures, go to the corporate’s Investor Dashboard that we keep on its behalf and click on the blue Observe Firm button to get updates with their progress.

New Hashish Ventures publishes curated articles in addition to unique information. Right here is a number of the most attention-grabbing enterprise content material from this week:

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Alan & Joel

Alan Brochstein, CFA
Primarily based in Houston, Alan leverages his expertise as founding father of on-line communities 420 Investor, the primary and nonetheless largest due diligence platform centered on the publicly-traded shares within the cannabis business. Along with his in depth community within the cannabis group, Alan continues to seek out new methods to attach the business and facilitate its sustainable progress. At New Hashish Ventures, he’s chargeable for content material growth and strategic alliances. Earlier than shifting his focus to the cannabis business in early 2013, Alan, who started his profession on Wall Road in 1986, labored as an impartial analysis analyst following over twenty years in analysis and portfolio administration. A prolific author, with over 650 articles printed since 2007 at Looking for Alpha, the place he has 70,000 followers, Alan is a frequent speaker at business conferences and a frequent supply to the media, together with the NY Occasions, the Wall Road Journal, Fox Enterprise, and Bloomberg TV. Contact Alan: Twitter | Fb | LinkedIn | E-mail

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