COOKIES acquires MMTC license in Florida (TCNNF)
COOKIES, a California-based cannabis company, has acquired one of Florida’s 22 medical marijuana treatment center (MMTC) licenses. According to the Miami Herald, COOKIES bought the license from Tree King-Tree Farm Inc. for an undisclosed amount. The company plans on operations coming online in 2021. COOKIES was founded in 2012 by Berner, a Bay Area rapper and entrepreneur. The dispensary chain offers over 50 cannabis varieties and product lines, and it has 18 retail locations nationwide with plans to expand in Massachusetts as well. COOKIES has a significant brand presence nationwide through partnerships with established MSOs and local dispensaries. The company has successfully leveraged its hip-hop credibility to build its brand power and win celebrity partnerships, notably with rapper Rick Ross and hip-hop duo Run the Jewels. COOKIES sells cannabis strains with lively names, like Cereal Milk, Gary Payton, Cheetah Piss, and Ice Cream Cake, and even sells branded streetwear and smoking accessories.
While the Florida medical market is dominated by established players, primarily by Trulieve, COOKIES appears to be an entrant uniquely posed to grab market share if the company ramps expansion in the state. In interviews with Forbes, Berner disclosed that his California flagship stores often gross between $100,000 - $200,000 a day, and that their newest location in Melrose, CA has often hit sales of $450,000. The license purchased by COOKIES from Tree King Tree Farm had once been designated to sell to Green Peak Innovations for $48M.
Recreational legalization in Vermont just needs the governor’s signature
On Tuesday, the Vermont Senate passed a bill legalization commercial adult-use marijuana by a margin of 23-6. The bill is on Gov. Phil Scott’s (R) desk, and his signature is the final step towards its passage. The governor has expressed reservations on the bill and has not clearly indicated whether he’ll sign the bill or not. If Vermont legalizes, it will contribute to legalization momentum in the Northeast corridor and heading into the November elections.
Canopy Growth and Acreage implement amended arrangement (CGC, ACRGF, STZ)
Yesterday, Canopy Growth and Acreage initiated the first steps towards their merger. As part of their recently amended terms, Canopy submitted an upfront payment of US$37.5M to Acreage shareholders. Holders of Acreage shares and certain securities convertible or exchangeable are entitled to receive approximately US$0.30 per share.
Canopy CEO David Klein commented, ““We are encouraged by Acreage’s recent actions to improve the focus and financial performance of its business and begin building our brands in the U.S., through the introduction of the Tweed brand in several U.S. states. The amended arrangement provides Canopy the most efficient entryway into the U.S., once federally permissible, and we believe will continue to benefit shareholders of both companies over the long-term.”
Canopy and Acreage initially had a conditional deal where Canopy bought the rights to acquire Acreage for US$3.4B. In the April 2019 agreement, Canopy agreed to pay US$300M upfront for that right, with the deal’s consummation dependent on U.S. federal legalization. This amended arrangement dropped the upfront payment to US$37.5M and removed the conditionality of U.S. federal legalization to execute the acquisition.
