Employers are still facing challenges related to cannabis in the workplace a year into legalization, finds a new survey by the Canadian Federation of Independent Business (CFIB). In fact, nearly six in 10 business owners rank their provincial government’s efforts to educate them as poor or very poor.
“Cannabis legalization posed some major new challenges for employers, especially in industries where the safety of employees or customers is a concern. We warned governments in the lead-up to legalization that their education efforts were severely lacking. A year in, and as new products become available, it doesn’t look like it’s gotten much better,” said CFIB president Dan Kelly. “We’re finding that provincial governments still have not done a great job of informing employers of their responsibilities, relevant rules and regulations, as well as the resources available to them.”
Only 8 per cent of surveyed businesses had experienced a cannabis-related incident in the workplace since October 17, 2018, but that number rises to 22 per cent for businesses with 100 to 499 employees, according to the preliminary data. Businesses in hospitality were most likely to report having had an incident (16 per cent).
The survey also found that:
- Only a quarter of businesses list their provincial government as a primary source of information related to cannabis in the workplace.
- 32 per cent listed CFIB as a primary source of information, while 48 per cent did not have a primary source of information.
- 59 per cent of those who had a primary source of information felt better equipped to deal with cannabis in the workplace.
- 34 per cent of businesses do not have a drug and alcohol policy in place.
“Many small businesses don’t have an HR department or legal experts on staff so they need help and resources, but too often, their needs are treated as an afterthought when governments rush to introduce major new legislation,” added Kelly. “I advise any business owners that are looking for information to visit cfib.ca/cannabis for tools and resources, including a free workplace drug and alcohol policy template.”
SOURCE Canadian Federation of Independent Business
C21 Investments Restructures Debt Servicing and Terms of Phantom Farms Acquisition
C21 Investments Inc. (“C21 Investments” or the “Company”) (CSE: CXXI and OTC: CXXIF) today announced that it has reached an agreement to restructure payments for the $21.8 million balance remaining on the secured promissory note issued on January 15, 2019 (“Note”) to Mr. Sonny Newman in connection with the Company’s purchase of Silver State Relief LLC and Silver State Cultivation LLC. The Company has also agreed to revised terms for the acquisition of Phantom Venture Group LLC and Phantom Brands LLC (together, “Phantom Farms”). These changes are designed to maintain positive cash flow for C21 Investments and position it for future growth. All figures are in US dollars unless stated otherwise.
Restructuring highlights include:
- December principal payment to Mr. Newman cancelled; monthly debt service obligations reduced by 70% to $600,000 per month starting Jan 1, 2020.
- Consolidation of the Oregon business operations including the sale lease-back with the vendors of the Phantom Farms’ properties on favourable terms.
- Reduction of future share issuance obligations by approximately 6 million shares.
- Aggregate annual run-rate cost reductions now tracking in excess of $6 million.
Demonstrating his flexibility and commitment to shareholders, President and CEO Sonny Newman, has agreed to cancel the December 1, 2019 principal payment of $800,000, lower the monthly payments due thereafter by $1,400,000 to $600,000 per month, and reduce the annual interest rate on the Note to 9.5% from 10%. These terms will be effective through July 1, 2020 at which time the balance of the Note will be due and payable.
“This restructuring will allow the Company to move forward with its strategic plans and as the Company’s largest shareholder, I continue to fully support the Company,” said Sonny Newman. “In my letter to shareholders dated July 16, 2019, I identified right-sizing and integration of our operations in Oregon as a top priority. Today’s announcement marks a significant milestone in achieving this goal.”
C21 Investments has revised the terms of its acquisition of Phantom Farms. Under the revised agreement, the real estate assets of Phantom Farms (“Properties”) will transfer back to the vendors. C21 Investments will have a third-party appraise the value of the Properties and will issue to the vendors in shares priced at CAD$1.05 for any difference between the Properties’ current value and the original agreement of $8.01 million due in October 2020. This represents a reduction in share issuance obligations for the Company of approximately 6 million shares. This transaction is scheduled to close in January 2020. In addition, under the new terms, the vendors will decrease the lease rates for C21 Investments on the Properties to 7% of the assessed value, and the Company will retain an option to purchase the properties. The Phantom Farms’ vendors will retain their earn-out shares per the original agreement.
Having successfully negotiated new debt service and acquisition terms, C21 Investments has formally engaged Eight Capital as its exclusive financial advisor to identify and assess strategic opportunities for the Company. Eight Capital is a Canadian, full-service investment dealer with a leading practice in the cannabis sector.
“The cannabis space continues to evolve rapidly and we want to ensure that all avenues for increasing shareholder value are considered by management and the Board,” said Sonny Newman.
SOURCE C21 Investments Inc.
Core One Labs’ Subsidiary, Agrotech LLC, Completes 1,600 Pound Harvest of Sacramento Farm
Core One Labs Inc. (CSE: COOL), (OTCQX: CLABF), (Frankfurt: LD6, WKN: A14XHT) (“COOL” or the “Company”) announces that its 50%-owned subsidiary, Agrotech LLC, has harvested 1,600 pounds from the Sacramento farm it manages and has completed drying and testing of the biomass.
Agrotech LLC has harvested a section of the two- and one-half acre farm in Sacramento. The harvest yielded over 1,600 pounds of biomass which was dried and tested, then processed for classification into flower, which is expected to yield approximately 60%, and trim for both the production of CannaStripsTM and retail distribution and sales. The remainder of the farm’s crop will continue to provide additional bio-mass late into November.
The harvest of the farm provided research data and further affirmation of the Company’s ability to cultivate outdoors without the use of pesticides or fungicides. The harvest has received a Certificate of Analysis (“COA”) confirming those positive expectations. Operationally, this harvest is evidence that the Company no longer has to rely on third party cultivations and incur the additional risk and the significant margins that reliance represents. The Company now can produce high quality cannabis without contaminates at a much lower cost outdoors, thereby reducing the cost of goods across all the product lines.
Core One Labs CEO, Brad Eckenweiler, stated, “This outdoor cultivation is one more accomplishment for the Company as it continues to build its expertise and operational structure towards a vertically integrated cannabis company from genetics and seed to the customer’s doorstep.” The current market in California for wholesale flower is between USD$600 and USD$1,200 per pound with a COA confirmation.
The Company will be updating the market as to the progress on the farm as new information becomes available.
In addition, the Company is announcing that it has reached an agreement with an arms-length party for a CAD$300,000 one-year unsecured convertible debenture (the “Debenture”). The principal advanced under the Debenture will accumulate interest at 6% per annum compounded monthly and may be converted, together with accrued interest, in whole, or in part, into shares of the Company’s common stock at CAD$0.64 per share.
Lotus Ventures Finalizes First Shipment with Auxly Cannabis Group Inc.
Lotus Ventures Inc. (CSE: J) (FRA: LV9) (OTC: LTTSF) (the “Company” or “Lotus“) has finalized the details of its first shipment to Auxly Cannabis Group Inc. (TSXV: XLY), and expects the shipment to be sent out next week. Pursuant to Lotus and Auxly’s definitive agreement (the “Agreement”) dated September 11, 2018, Auxly is entitled to purchase the first 50% of Lotus’ cultivation at a fixed price, with a right of first offer to purchase the remaining 50% at market prices. Auxly has agreed to purchase 100% of the initial crop and has an ongoing interest in our high-quality flower production.
Lotus was pleased with its initial batch yielding more cannabis than originally expected, while passing all quality control measures. The Company grew multiple strains in its initial batch, optimizing the growing environment and learning what strains worked best for the current market demand. Out of the initial batch, one strain tested at 22.6% THC while the average amongst the group tested at approximately 19.1% THC. As per market demand, Lotus plans to grow higher THC products and anticipates higher THC results in future batches now that the growing environment has been standardized.
As per multiple industry reports, as well as internal data, Canadian cannabis consumers are currently demanding premium dried flower with a high THC% content. Our analysis finds that indoor produced craft products with a high THC% have been able to either maintain or increase selling prices in retail since legalization, while lower-to-mid grade products have seen selling price compression since legalization. Lotus continues to be focused on exceeding consumer expectations as a reliable low-cost producer of high-quality flower grown from exotic and premium strains.
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