TLRY's MedMen Enterprises delays 10K filing
Irwing Simon has no credibility as a Cannabis CEO. As a result, TLRY's future in the Cannabis industry is brought into question!
"Beyond the delay in submitting the necessary filings, MMEN-CA anticipates that it cannot present its interim financial reports, management commentary, and associated certifications for the quarter ending September 30, 2023, within the expected timeframe. The company wishes to clarify that it has not initiated any procedures related to insolvency. Additionally, there is no significant information pending release to the public at this time. It's just a matter of time!"
The Medmen press release and inevitable bankruptcy seemed almost scripted to those closely watching the cannabis industry. However, one individual who appeared to be caught off guard was Irwin Simon, the Chairman & Chief Executive Officer of Tilray Brands, Inc. During the Tilray (TLRY) earnings call in April 2023, Simon commented on his company's investment in MedMen: "So, I'm still very bullish on MedMen. I think a lot of great work has been done to clean it up. I think MedMen still has one of the best-known brand names in the MSO in the cannabis business in the U.S. And what it does for us, Andrew puts us upon legalization; we now have a great brand in MedMen if that were to come to be."
His remarks now will spark a wave of discussions among industry observers, with many questioning the direction in which he is steering Tilray. One of the many reasons we are SHORT. The growing concern is evident: Is Simon's diversification approach beneficial for the company or leading Tilray down a precarious path? We argue that Simon's strategy, particularly regarding the MedMen investment, may not be in the best interest of Tilray's long-term stability and success. This sentiment is increasingly echoed in the cannabis financial community, where there's a growing chorus for change in leadership at Tilray. The question on many minds is whether Simon's tenure at the helm of Tilray is nearing its end as stakeholders look for strategies that promise stability. As the situation unfolds, it's clear that the decisions made at Tilray's top echelons will be under intense scrutiny. The cannabis industry, known for its dynamic and often unpredictable nature, waits to see how Tilray navigates these choppy waters.
As a reminder, TLRY invested in MedMen convertible notes In 2021, claiming this as a strategic move provided Tilray with the ability to convert those notes into equity ownership of MedMen, potentially giving Tilray a substantial stake in the company. The investment made by Tilray in MedMen was reported to be $165.8 million. This investment was a significant step in Tilray's expansion plans, especially in the U.S. market. The notes are convertible to equity in MedMen upon federal legalization, subject to regulatory requirements, and represent a right to about 68% of the notes and warrants, equating to approximately 21% of MedMen's outstanding Class B subordinate voting shares post-legalization. According to the CEO, the acquisition of these convertible notes by Tilray was not just a financial investment but also a strategic maneuver. It provided Tilray with a path, subject to necessary regulatory approvals, to obtain a significant equity position in MedMen. This move was seen as crucial for Tilray's U.S. expansion plans. The acquisition provides Tilray with a recognized brand in the U.S. cannabis retail space.
Canopy Growth's Completes Another Strategic Pivot
Canopy Growth first purchased a majority stake in BioSteel Sports Nutrition in October 2019. The acquisition marked a significant move for Canopy Growth into the sports nutrition and wellness sector, aligning with the growing interest in integrating cannabis products with health and wellness industries. Canopy Growth initially acquired a 72% stake in BioSteel Sports Nutrition Inc., with a path to eventually obtaining 100% ownership. Canopy Growth announced a change in its strategy on February 9, 2023. This announcement was made in conjunction with reporting their third-quarter fiscal year 2023 financial results. The announcement included details about Canopy Growth's Canadian business transformation plan, indicating a significant shift in the company's strategic focus and operations. Canopy Growth announced it would cease funding the BioSteel business unit. Over the weekend, there have been significant developments with a court-approved sale of all or substantially all of the assets of BioSteel Canada and BioSteel Manufacturing. The agreement involves selling most of BioSteel Canada's assets, excluding specific inventory, accounts receivable, and contracts. This includes intangible assets, intellectual property, formulas, recipes, and specified fixed assets and the sale of BioSteel Manufacturing's assets, such as property, plant, equipment, inventories, and related operational records.
Biden Signs Emergency Funding Bill: Extends Farm Bill and Impacts Hemp Industry
Summary: The extension of the Farm Bill is a crucial development for the hemp industry, providing more time for Congress to address the complex issues surrounding hemp-derived cannabinoids. It reflects the ongoing evolution and challenges in regulating this sector and we believe closing this loophole is needed for the cannabis industry.
Extension of the Farm Bill to September 2024 President Joe Biden recently signed an emergency funding bill to prevent a government shutdown. A key component of this bill, as reported by Reuters and other news agencies, is the extension of the Farm Bill until September 2024. This extension gives Congress additional time to develop a new Farm Bill, which is crucial for the evolving hemp industry.
Focus on Hemp-Derived Cannabinoids and Delta-8 THC The extended timeframe is particularly significant for advocates who are pushing for regulations addressing the burgeoning market in hemp-derived cannabinoids, including the controversial delta-8 THC. The current landscape sees a growing demand and market for these unregulated products.
Implications for Farm Programs and Food Assistance The stopgap bill ensures continued funding for farm programs and food assistance through the next year. This stability, including hemp cultivation and sales, is vital for the agricultural sector.
Background of the Farm Bill The Farm Bill, a major spending package renewed every five years by Congress, plays a critical role in the agriculture and food industry. The 2018 Farm Bill was a landmark legislation that legalized hemp production and sales across all 50 states.
Challenges and Market Dynamics However, the 2018 Farm Bill also inadvertently created a market for unregulated hemp-derived products, competing with the strictly regulated state-legal marijuana industry. This led to a surge in products containing CBD, delta-8 THC, delta-9 THC, and other cannabinoids, often sold in various retail outlets and online.
Regulatory and Legal Challenges These products have posed challenges for state lawmakers and the U.S. Food and Drug Administration (FDA). The FDA has issued warning letters to companies selling hemp-derived products with unsupported medical claims or marketing delta-8 THC products in packaging resembling children's snacks and candies.
State Responses and Legal Battles In response to the regulatory vacuum at the federal level, states like Kentucky and Virginia have started to pass laws banning or severely restricting hemp-derived products. Hemp companies have been actively responding with legal actions to delay or overturn these state bans.
