California Distributor collapses
Herbel, a California distributor, is in receivership after falling behind on key loans which include tens of millions of dollars in unpaid invoices to brands across the state. The industry is already struggling, so many of these unpaid brands will most likely feel the pain of this collapse. To make matters worse, the terms of Herbl’s receivership mean that investors and other claimants due money from Herbl might be paid before brands, meaning the likelihood of these brands being paid are very low. Back in 2022, Herbel reportedly handled close to $700M in product sales. Herbl has not officially acknowledged the situation as of yet, but their employees on LinkedIn started to post last week that they are looking for jobs. “The recent receivership of Herbl, one of California’s largest cannabis distributors, should be a wake-up call to policymakers that all is not well, and immediate action is called for to avert a crisis that has already started,” Wesley Hein, president of the Cannabis Distribution Association.
TerrAscend Private Placement
TerrAscend Corp announced that they are looking into raising $15M with two private placements. One private placement will be an equity offering of 5M units priced at $1.50 units, for a total value of approximately $7.5M. The price is equal to a 7.4% discount to the closing price of the common shares on the Canadian Securities Exchange on June 14. The other private placement will be a non-brokered offering of senior unsecured convertible debentures priced at $1,000 per debenture for a total value of roughly $7.5M. According to the company, the proceeds will be used to qualify the company to uplist to the Toronto Stock Exchange, the acquisition of medical cannabis dispensaries in Maryland and for “general corporate purposes”.
NY Black market
Today, Governor Kathy Hochul out of New York announced that authorities have seized ~1k pounds of illegal cannabis products worth roughly $10M from 31 illegally wrong dispensaries. These raids began earlier this month to fight the war against the black market now that legal sales have begun in the state. "Illegal sales are not just unsafe and unfair, they are unjust," Hochul said. The state approved $5M to be spent on 37 full-time workers focused on enforcing this new legal market. Those 37 employees are going to have their hands full combating what we believe to be the largest black market in North America.
