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VANCOUVER, British Columbia, Sept. 12, 2018 (GLOBE NEWSWIRE) -- FinCanna Capital Corp. (“FinCanna”) (CSE: CALI) (OTCQB: FNNZF) a royalty company for the U.S. licensed medical cannabis industry, is pleased to provide the following Letter to its Shareholders:
It’s been an exciting year for FinCanna. We started trading just over nine months ago, have raised C$24 million and invested in three top-tier businesses. I believe we’ve reached an inflection point in our development as our investee companies move toward commercialization, so I thought I would take this opportunity to share my thoughts with you as we move into the final few months of 2018.
Investment Considerations Focused on California, the largest legal cannabis market in North America Operates an attractive royalty model that is beneficial for operators and the company Established partnerships with best-in-class operating entities Extensive network provides access to top-tier projects and operators Executive leadership team with 40+ years of combined experience in fund raising, capital management, corporate development, merchant and commercial banking
they capitalize weed companies and then take a cut of the profits.
is it real?
I looked at these guy a while back and then completely forgot about them. Yesterday one of my "building mo" scans picked them up again.
we have to look at the companies they're funding to see if there are or will be any profits to get royalties from. I thought there investments to date looked at least interesting.
FinCanna Capital Corp. names New Board of Directors Member
Company: FinCanna Capital Corp. (FNNZF)
August 30, 2018
FinCanna Capital (CSE: CALI) (OTCQB: FNNZF), a royalty company for the U.S. licensed medical cannabis industry, this morning announced the appointment of Robert “Bob” Kamm to the company’s Board of Directors. Kamm has more than 25 years of experience operating and advising businesses, including his current role representing FinCanna on the Board of Directors of its investee company, Cultivation Technologies Inc. Jeff Tindale has resigned from the FinCanna Board of Directors making way for Kamm’s appointment. Tindale will continue to serve on FinCanna’s Board of Advisors.
In addition, the company announced that on August 29, 2018, it issued a total of 450,000 incentive stock options to a director and an advisor with an exercise price of $0.30 per share and a term of five years. “We are very pleased to welcome Mr. Kamm to our Board of Directors,” FinCanna Capital president and CEO Andriyko Herchak stated in the news release. “Bob has a wide range of business expertise and skills all of which will serve us well as we begin to accelerate our growth trajectory over this next time period.
He has an exceptional history of identifying and building high growth companies and we look forward to him applying his talents to the future success of FinCanna. I would also like to thank Mr. Jeff Tindale for his invaluable service on our Board of Directors since FinCanna’s inception and welcome his continued involvement with FinCanna on our Board of Advisors.”
To view the full press release, visit nnw.fm/a9Eeq
About FinCanna Capital Corp.
FinCanna provides financing to top-tier companies in the licensed medical cannabis industry in exchange for a royalty on revenues. FinCanna, led by a team of finance and industry experts, is building its diversified portfolio of royalty investments in scalable, best-in-class projects and companies in U.S. legal states, with a focus on California. For additional information visit www.FinCannaCapital.com
The following management’s discussion and analysis (“MD&A”) prepared effective April 19, 2018 should be read in conjunction with the audited financial statements of FinCanna Capital Corp. (“FinCanna” or the “Company”) for the period from incorporation on November 28, 2016 to April 30, 2017, and accompanying notes thereto which have been prepared in accordance with International Financial Reporting Standards. All figures are in Canadian dollars unless stated otherwise.
Forward-Looking Statements
Certain statements contained in the following MD&A constitute forward-looking statements. Such forward looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. Highlights & Recent Developments
CORPORATE
On July 13, 2017, FinCanna and Astar announced they entered into a binding agreement (the “Agreement”) pursuant to which Astar would acquire all of the issued and outstanding shares of FinCanna in exchange for common shares, outstanding options and warrants of Astar, on a one to one basis (the “Transaction”). The proposed transaction was to be carried out by way of a plan of arrangement, pursuant to which FinCanna would become a wholly-owned subsidiary of Astar. As a result of the Transaction, Astar, as the “Resulting Issuer”, would continue on with the business of FinCanna under the name of “FinCanna Capital Corp.” On September 6, 2017, FinCanna and Astar announced that Morris L. Reid was appointed to the Board of Directors of FinCanna.
On December 22, 2017, FinCanna and Astar completed the Transaction.
On December 27, 2017, FinCanna and Astar announced the completion of the contemplated plan of arrangement and the granting a total of 3,350,000 incentive stock options with an exercise price of $0.50 per share of the Resulting Issuer, valid for five years from the date of grant. On December 29, 2017, FinCanna’s common shares commenced trading on the Canadian Securities Exchange (“CSE”) under the trading symbol “CALI”. On March 19, 2018, FinCanna announced it has received its listing on the OTCQB under the symbol “FNNZF”.
FINANCINGS
On May 26, 2017, the Company completed a private placement financing of 8,694,333 common shares at $0.30 per share, for gross proceeds of $2,608,300. Additionally, the Company issued 695,547 finders’ warrants in connection with this financing.
On May 29, 2017, the Company completed a private placement financing of 1,615,000 common shares at $0.30 per share, for gross proceeds of $484,500. Additionally, the Company issued 104,000 finders’ warrants in connection with this financing.
On June 13, 2017, the Company completed a private placement financing of 4,757,299 common shares at $0.30 per share, for gross proceeds of $1,427,190. The Company also issued 241,600 finders’ warrants in connection with this financing. In addition, the Company issued 70,000 common shares with a fair value of $21,000, to a Director of the Company for consulting services.
In connection with this offering, on July 5, 2017, the Company issued 1,900,000 common shares at $0.30 per share, for a total fair value of $570,000, to certain officers of the Company subject to a limited recourse shareholder loan.
On November 23, 2017, the VP Corporate Development left the Company and the 400,000 common shares issued (of which 80,000 had vested) under the limited recourse shareholder loan were returned to treasury and cancelled.
The shareholder loan relating to those shares was also extinguished. On December 22, 2017, the Company completed brokered and non-brokered private placements whereby it issued at total of 14,264,466 units with one-half of one share purchase warrants at $0.50 per share for gross proceeds of $7,132,233, and 7,132,233 warrants. Each warrant shall be exercisable into one common share of the Company at an exercise price of $0.75 for a period of two years.
In connection with the brokered portion of the private placement, the Company issued 420,000 finders’ warrants exercisable into one common share of the Company at an exercise price of $0.50 until December 22, 2018. With respect to the non-brokered portion of the private placement, the Company issued 412,000 finders’ warrants exercisable into one common share of the Company at an exercise price of $0.75 until either November 21, 2019, or December 22, 2019. In addition, the Company issued 150,000 common shares with a fair value of $75,000 as a finder’s fee recorded as share issue costs.
During the period ending January 31, 2018, a total of 2,901,177 warrants were exercised for gross proceeds of $870,354.
Subsequent to January 31, 2018, a total of 813,834 warrants were exercised for gross proceeds of $242,817.
Non-brokered Private Placement – March 2018
On February 21, 2018, subsequent to the period end, FinCanna announced its intention to raise up to $5,000,000 by way of a non-brokered private placement of up to 7,142,857 units (the “Units”) at a price of $0.70 per Unit (the “Private Placement”). Each Unit will consist of one common share of FinCanna and one-half of one common share purchase warrant.
Each full warrant will be exercisable to acquire one common share of FinCanna at an exercise price of $1.05 for 24 months from the date of the closing of the Private Placement. The common share purchase warrants will be subject to acceleration at FinCanna’s discretion in the event its common shares trade on the Canadian Securities Exchange on a volume weighted average price (“VWAP”) basis of $1.40 or more for a period of ten consecutive trading days.
On April 5, 2018, the Company closed the first tranche of the private placement announced on February 21, 2018. The Company issued 3,829,944 Units at a price of $0.70 per unit for gross proceeds of $2,680,960. All securities issued will be subject to a four-month hold period expiring on August 6, 2018.
On April 13, 2018, the Company closed the second and final tranche of the private placement announced on February 21, 2018. The Company issued an additional 802,725 Units at a price of $0.70 per unit for gross proceeds of $561,907. All securities issued in the second tranche will be subject to a four-month hold period with expiring on August 11, 2018.
Upon closing of this second and final tranche the Company closed on a total of $3,242,867.
FinCanna paid a finder’s fee of 8% on a portion of the proceeds raised from subscriptions arranged by certain finders in cash and / or warrants equal to 8% of the aggregate Units subscribed for pursuant to the subscriptions arranged by such finders. Each warrant shall be exercisable for one common share at a price of $1.05 for a period of 24 months from closing. The lead finder in the non-brokered private placement is Triview Capital Ltd.
ROYALTY PORTFOLIO DEVELOPMENTS
Cultivation Technologies Inc.
On September 12, 2017, FinCanna’s first investee, Cultivation Technologies Inc. (“CTI”), began operations in Coachella, California with one of the state’s first permitted solvent extraction facilities for medical cannabis. The lab was established as an interim facility in accordance with CTI’s conditional land use permit in Coachella, to remain in operation during the construction of the full 6-acre medical cannabis campus planned for the site.
On October 25, 2017 FinCanna agreed to amend the agreement with CTI. In exchange for FinCanna agreeing to extend certain dates, subject to certain limitations, the amended agreement with CTI provided FinCanna with a 50% share of the profit from CTI’s interim medical cannabis extraction facility. The share in profits will provide FinCanna with a source of monthly revenue before construction of CTI’s Coachella Campus.
On January 15, 2018, FinCanna reported that CTI now had the rights to 100% of the production capacity of its interim extraction facility. The new operating structure is expected to result in significant economic opportunities to CTI, as it now has the ability to add an additional extraction machine and fractional distillation and winterization equipment.
This added working capital will create additional capacity for CTI to process up to 6,000 pounds of biomass per month and the ability to service third party vaporizer, winterization and distillation customers at a scale of approximately 100,000 grams of finished product weekly. FinCanna also announced amendments to its funding agreement with CTI to provide for certain changes to the terms of FinCanna’s investment that, among other things, entitles FinCanna to an increased royalty of 14% of revenue (previously 10%), an increase in the annual interest rate on the loan from 10% to 20% and 7% of CTI’s revenues to be paid to FinCanna and applied against interest and principal on the loan.
On January 24, 2018, FinCanna reported that CTI had secured an additional five megawatts of power from the local utility company, Imperial Irrigation District (“IIF”). This increased CTI’s total available power to seven megawatts, the largest power commitment in the Coachella Cannabis Zone from IID, and provides CTI with the requisite power for construction and operation of the planned Coachella Campus. Green Compliance Inc.
On February 6, 2018, FinCanna entered into a royalty agreement with Green Compliance, Inc. (“Green Compliance”). Under the Royalty Agreement, FinCanna will fund US$3 million in tranches by September 15, 2018, in return for a perpetual royalty equal to 10% of consolidated gross revenues of Green Compliance, subject to certain buy-back options.
Gram Co Holdings LLC
On February 15, 2018, FinCanna signed a binding term sheet with Gram Co Holdings LLC (“Gram Co”), subject to due diligence by FinCanna, pursuant to which FinCanna would fund US$3 million in tranches. In return, FinCanna will receive a tiered corporate royalty, adjusted based on revenues levels, ranging from 14% to 7.5% of Gram Co’s revenues.
FinCanna Capital Corp. (the "Company") was incorporated pursuant to the provisions of the British Columbia Business Corporations Act on November 28, 2016, under the name 1098119 B.C. Ltd., and changed its name to Coachella Cannabis Corp. on the same date, and further to FinCanna Capital Corp. on May 12, 2017. The Company’s head office address is at Suite 550 – 800 West Pender Street, Vancouver, BC V6C 2V6 and its registered and records office address is 595 Burrard St, Suite 2600, Vancouver, British Columbia, Canada, V7X 1L3. The Company’s principal business activity has been seeking of investment opportunities in the medical cannabis sector in the United States.
The Company and Astar Minerals Ltd., (“Astar”) entered into an Arrangement Agreement on July 11, 2017, pursuant to which Astar acquired all of the issued and outstanding common shares of the Company in exchange for 44,742,763 common shares of Astar, on a one to one basis. In addition, each outstanding option and/or warrant to acquire the Company’s common shares became exercisable for one common share of Astar (the “Transaction”).
The Transaction was carried out by way of a plan of arrangement (the “Agreement”), pursuant to which the Company became a wholly-owned subsidiary of Astar (Note 4). As a result of the Transaction, Astar, as the “Resulting Issuer,” continued on with the business of the Company under the name “FinCanna Capital Corp.” As contemplated by the Agreement, Astar’s common shares were delisted from the TSX Venture Exchange (“TSXV”). On December 22, 2017, the Company completed the Transaction and the common shares of the Resulting Issuer were listed on the Canadian Securities Exchange (“CSE”) and began trading on December 29, 2017 under the symbol “CALI”.
Nature of Business
The Company’s mission is to combine extensive investment expertise, and industry experience in funding best-inclass businesses in the U.S licensed medical cannabis industry with a focus on California.
The Company’s vision is to be the capital partner of choice for high growth, best-in-class businesses focused on the licensed US medical cannabis industry.
Licensed Medical Cannabis
According to analysts at Ameri Research, the global market for licensed medical cannabis is growing at a compound annual rate of more than 21%, and is on track to exceed $63.5 billion by 2024. The Company is focused on this sector and is confident that its investors and portfolio companies will benefit from this focus.
FinCanna is focusing initially on California since it is the sixth largest economy in the world and the largest medical cannabis market in North America. At Arcview Group, analysts estimate the California’s legal cannabis industry will grow at a 21% CAGR to $6.5 billion by 2020, and generate upwards of $1 billion in tax revenue.
Royalty Model
FinCanna’s primary objective is to form part of a “whole capital” solution for businesses in the licensed medical cannabis sector by providing capital investment for a percentage of the future revenues. It seeks to invest in Bestin-Class businesses by aligning the business and financial interests of existing owners and operators with those of FinCanna.
FinCanna’s capital solution seeks to deliver efficient long-term capital under a royalty arrangement to facilitate the growth or other specific objectives of its investees. It also endeavors to provide funds in a timely way to insure the business opportunity is optimized.
FinCanna’s royalty financing offering is an alternative or complement to debt and equity financing. It provides the advantage of allowing investees to maintain financial flexibility and control of their business as opposed to entering into arrangements that may include restrictive debt structures or giving up an ownership stake.
Cultivation Technologies Inc.
Cultivation Technologies Inc. (“CTI”) is comprised of a team of experts from Fortune 150 agriculture, medical cannabis, law, engineering and technology. CTI has demonstrated the ability to navigate permitting in California, the largest medical cannabis market in North America.
CTI is constructing a medical marijuana manufacturing and testing facility. CTI has been granted a multitude of local permits that allow for the construction of the project and permit CTI to conduct on-site cannabis operations, subject to regulatory requirements. Subsequent to amendments to the laws of the State of California with respect to cultivating marijuana that took effect on January 1, 2018, CTI has applied for and received a Temporary State License which will remain in effect until such time as a Permanent State License can be obtained. The Permanent State License will then be subject to renewal on an annual basis.
Presently, this industry is illegal under United States federal law. CTI has, and intends to adhere strictly to the state statutes in its operation. FinCanna provides funding to CTI for its planned, fully-entitled, large-scale indoor medical cannabis facility to be developed in Coachella, Southern California. In return, FinCanna is entitled to a Royalty of 14% of CTI’s revenues from its Coachella Project. FinCanna also has the right to finance CTI’s next 2 licensed cannabis facility projects on the same terms as the Coachella Project.
Green Compliance
Green Compliance, headquartered in Fort Lauderdale, Florida, offers a state-of-the-art enterprise compliance and point-of-sale software solution (“ezGreen”) for licensed medical cannabis dispensaries and cultivators. Green Compliance helps its customers comply with both the Health Insurance Portability and Accountability Act (“HIPAA”) and State Laws by ensuring patients’ confidential data is being handled properly, helping to protect from possible security breaches and financial and criminal liability resulting from potential violations.
Green Compliance developed the software with Automated Healthcare Solutions (“AHCS”) and has an exclusive licensing and support agreement with them. AHCS is a leading point of care tracking and dispensing software solution in the U.S. dedicated to the workers compensation vertical in the pharmaceutical industry, and a proven HIPAA compliant solution. AHCS supports thousands of active physicians that dispense medication onsite and has tracked, monitored, reported, and protected patient information for the past 16 years across thousands of physician practices, while maintaining HIPAA compliance and following Health and Human Services protocols in the United States Green Compliance has commenced sales in the United States, and its target market is every licensed operating dispensary and cultivator in the states which have passed laws legalizing medical cannabis - currently 29 states and Washington, D.C.
FinCanna entered into a royalty agreement with Green Compliance. Under the Royalty Agreement, FinCanna will fund US$3 million in tranches by September 15, 2018. In return, FinCanna will receive a perpetual royalty equal to 10% of consolidated gross revenues of Green Compliance, subject to certain buy-back options.
Gram Co Holdings LLC
Gram Co Holdings LLC (“Gram Co”), based in Oakland, California, is a cannabinoid research and refinement facility focussed on the medical cannabis industry to provide B2B and B2C products and services to licensed medical dispensaries, infused product manufacturers and numerous others in the cannabis supply chain.
FinCanna Capital Corp.
Gram Co has leased a facility in Oakland, California in which they are retrofitting a large, state-of-the-art medical cannabis extraction laboratory, which is expected to be operating by the end of the third quarter of 2018. Gram Co plans to be a premier producer of bulk quantities of THC distillate and various concentrates produced via hydrocarbon-based solvent extraction. Gram Co also plans to provide white labeling services to licensed brand and infused product manufacturers who do not have direct access to compliant production facilities.
Brands and manufacturers who work in conjunction with Gram Co will also be able to utilize in house distribution and marketing services as a part of operational collaborations. Gram Co principles have extensive experience in extraction, manufacturing and business operations, and will also be bringing over their existing brand from their registered collective “California Extracts” to operate under the Gram Co family. California Extracts already has an existing industry following and market presence.
FinCanna has signed a binding term sheet with Gram Co, subject to due diligence by FinCanna. Under the term sheet, FinCanna would fund US$3 million in tranches. In return, FinCanna will receive a tiered corporate royalty, adjusted based on revenues levels, ranging from 14% to 7.5% of Gram Co’s revenues.
"The idea of having a new attorney general in the first term of President Trump's administration, I think is very likely," Sen. Graham says as AG Sessions faces mounting criticism from Pres. Trump. https://t.co/WTHXtU9FFtpic.twitter.com/IuHxNtEOWL
Cultivation Technologies, Inc. Reaches $1 Million in Cumulative Revenue Since Beginning Commercial Operations in January 2018
June 7, 2018
As an innovator in the emerging cannabis industry in California, Cultivation Technologies, Inc. ("CTI") - a leading manufacturer and distributor of licensed cannabis in California - announced today that it has reached $1 million in cumulative revenue since it started commercial operations earlier this year.
Through its subsidiaries Coachella Manufacturing and Coachella Distributors, CTI provides "Extraction-as-a-Service" or "Contract Manufacturing" to brands, cultivators, manufacturers, and distributors who require licensed Butane Hash Oil ("BHO") processing for their biomass or manufacturing services for various products.
With divisions that fulfill the varying levels of procurement of cannabis products, including distribution to retail dispensaries, CTI remains at the forefront of this developing industry - including meeting the complex standards required to be fully-licensed within the state.
Earlier this week, CTI made news with the expansion of its Coachella™ Premium brand of cannabis concentrates and vape cartridges in California dispensaries. The Coachella™ Premium line of products features all the major concentrate types - including diamonds, sauce, shatter, batter, and sugar - with an ongoing list of strains.
The company was also instrumental in sponsoring state legislation AB2679, which sets safety standards and institutional best practices for cannabis extraction using solvents.
"We're quite encouraged about the revenue growth CTI is experiencing in just a few short months since launching operations," said Miguel Motta, President & CEO of Cultivation Technologies, Inc. "We've learned a lot about the market and expect to build upon our initial success in 2018 and beyond."
ABOUT CULTIVATION TECHNOLOGIES, INC.
Cultivation Technologies, Inc. provides infrastructure, manufacturing, extraction, distribution, technology, and branding to the legal medical cannabis industry. The company owns 6-acres in Coachella, California, which is entitled for a 111,500+ square foot facility featuring cultivation centers, manufacturing facilities, a testing lab, a distribution hub featuring transportation, and a centralized processing center. For more information, visit www.CultivationTech.com. The Company acquired temporary licenses for "Type 7" manufacturing and distribution from the State of California in January 2018.
CEO Beck’s LinkedIn profile suggests that he joined the company earlier this year. The corporate website describes him as a founding shareholder of MJIC and having involvement with a publicly traded vaporizer company. Beck founded the Marijuana Index, which is owned by MJIC, and was apparently involved very early in Vape Holdings (OTC: VAPE), though this is not disclosed in any SEC filings. VAPE did a reverse-merger in 2013, soared in early 2014 and has lost nearly 100% of its value.
Most interesting about Beck’s background is his apparent involvement in a penny stock pump and dump scheme that resulted in a settlement that included disgorgement as well as a five-year injunction that ended shortly before Beck joined CTI. Beck was prohibited from “directly or indirectly soliciting investors to purchase or sell securities.” The SEC complaint alleges that Beck was managing director of Del Mar Corporate Communications, which oversaw a “cold call telemarketing campaign of materially false or misleading information” on behalf of Pax Clean Energy, which was suspended from trading by the SEC in 2009.
CFN Exclusive Interview with FinCanna CEO Andriyko Herchak
By GlobeNewswire, June 14, 2018
SEATTLE, June 14, 2018 (GLOBE NEWSWIRE) -- CFN Media recently sat down with FinCanna Capital Corp. (CSE:CALI) (OTCQB:FNNZF) CEO Andriyko Herchak to discuss the company's royalty investment model, its accomplishments to date, and its strategy going forward.
CFN: Thank you for your time today Mr. Herchak, and congratulations on your recent news. Before we discuss the news, please give us an overview of FinCanna Capital and its royalty model.
Andriyko Herchak: You are welcome, it's a pleasure to speak with you today. At FinCanna Capital we are building a diversified portfolio of royalty based income by investing in top tier companies in the United States medical cannabis industry, with a focus on California. What is a royalty? Basically, we invest capital in a company and in exchange we receive a percentage of its revenue going forward. It has been a very successful model in other industries and we believe now is the perfect time for this royalty model in the US cannabis space and particularly in California. Our royalty model allows operators and business owners to preserve their ownership stake, not diluting themselves as they would with typical equity financing.
CFN: Why do you think the royalty model makes sense for cannabis companies today, particularly in the United States?
AH: In California right now, basically every company is a startup or running a startup, many with no history of revenues. If those companies are trying to raise money, equity financing can be massively dilutive, in large part due to the lack of a track record of revenue production. Our model does not look back, but rather forward. Our investment approach allows companies to preserve equity while providing cash to grow their business.
Additionally, cannabis is still federally illegal, which is a major contributing factor for the shortage of capital for cannabis companies across the US. Banks and federally regulated institutions are largely on the sidelines, so debt financing is difficult to find. Equity financing, as I mentioned earlier, often comes with unfavorable terms for the company. So our royalty model fills a void in the market for companies needing capital while operating in the US cannabis space.
CFN: Which companies have you invested in to this point, and why?
AH: Our royalty portfolio is currently comprised of three investments. We invest in management and the underlying business, that's really our focus and the top criteria for us. The first company we've invested in is, Cultivation Technologies Inc., ("CTI"). They have an exceptional management team that has proven itself in other industries. The CEO is a former executive of one of the largest agricultural companies in the world. The company is developing a large medical cannabis campus in Coachella, California. The two main revenue drivers will be cultivation and extraction. They were one of the early movers in California and we've been alongside them from the beginning. Its a large scale opportunity and we look forward to great things as the planned cannabis campus project moves forward.
Our second investment is with Green Compliance, a company that offers a HIPAA compliant software solution for cannabis companies. The industry is riddled with problems around data security. To our knowledge, none of the other point of sale (POS) software solutions out there were designed to protect client/patient data at the level to be delivered by Green Compliance and as required under HIPAA. The company offers a POS system that has been proven in the pharmaceutical industry over the last 17 years and is now being repurposed for the cannabis sector. The Green Compliance has the flexibility to integrate as a plug-in with any existing seed-to-sale software or it can operate as a stand-alone point-of-sale system.
Our third investment is in Gram Co, based in Oakland California. The company's business is to extract high quality cannabis distillate for major brands in California. The Gram Co team are seasoned extractors, highly experienced, and very well connected in the industry. We expect the company to be fully operational later this year.
CFN: Excellent. FinCanna recently announced that your portfolio company, CTI, has secured distribution across California and commenced sales of its Coachella Premium Cannabis product line. Why is this significant for your company?
AH: First of all, we have a 50% profit interest in CTI's extraction facility. CTI is developing its own premium brand in a market where having your own brand offers the highest revenues available in the vertical. While CTI only commenced operations in late January this year, they have already managed to secure distribution with 10 of the largest dispensaries in California. With California representing the 6th largest economy in the world, we expect a large financial win as the company progresses.
CFN: CTI has infrastructure that really sets the company apart. Can you tell us more about Coachella Manufacturing?
AH: CTI received one of the first solvent extraction permits in California and is one of the first companies to legally extract in the state. CTI has a clear first mover advantage in what amounts to a race to market across California. Their facility includes a state of the art, licensed lab with the latest in cold storage, extraction, and distillation technologies designed to produce premium and unique products for an increasingly discerning marketplace.
CFN: Is California going to be a major focus for FinCanna going forward?
AH: Absolutely. Our ticker symbol is CALI, and that was intentional. California was the first jurisdiction to legalize medical cannabis in North America, thirty years ago. It's by far the largest legal cannabis market in North America. The new laws that came into effect in the state this year are serving to both open the market but also demands a higher level of regulatory compliance for market participants as the green rush ramps up. There is a great race to market as entrepreneurs see tremendous, once in a generation opportunity. There are a lot of great companies out there that, due to restrictive federal regulations, are not able to obtain adequate financing. So we have this incredible opportunity to pair our attractive royalty financing with great operators to grow top tier businesses.
CFN: How does FinCanna build upon the success you've had to this point?
AH: It all comes down to the companies we invest in. We invest in companies we believe have the best opportunity to become leaders in their respective verticals. For companies we've invested in to date, we expect them to grow in size and reach without any further investment on our part. We will apply the same methodology to future investments by choosing the top companies that will become leaders in their own verticals. As those companies grow, our royalties grow accordingly. Success comes down to financing the right companies, with the right management, in the right sectors. We think we are well on our way with the companies we've financed to date and look forward to expanding our portfolio as opportunities present themselves.
For more information and to read the company's statement regarding potential risks visit www.fincannacapital.com
About CFN Media
CFN Media (CannabisFN) is the leading agency and financial media network dedicated to the global cannabis industry, helps companies operating in the space attract investors, capital, and publicity. Since 2013, private and public cannabis companies in the US and Canada have relied on CFN Media to grow and succeed.
Coverage Initiated for FinCanna Capital Corp. (CSE: CALI) (OTCQB: FNNZF) via NetworkNewsWire
By GlobeNewswire, June 28, 2018
NEW YORK, June 28, 2018 (GLOBE NEWSWIRE) -- FinCanna Capital Corp. (CSE:CALI) (OTCQB:FNNZF), a royalty company for the U.S. licensed medical cannabis industry, announces it has engaged the corporate communications expertise of NetworkNewsWire ("NNW").
FinCanna Capital is a royalty company aiming to be the capital partner of choice for high-growth, best-in-class businesses operating in the licensed U.S. medical cannabis industry. Primarily focused on the burgeoning California cannabis market, FinCanna leverages extensive investment expertise and industry experience to benefit its shareholders and portfolio companies.
The company's "whole capital" solution for businesses in the licensed medical cannabis sector includes the provision of capital investment for a percentage of their future revenues. The FinCanna Capital Solution utilizes a royalty arrangement to deliver capital, in order to facilitate the growth or other specific objectives of its investees, and ensure the business opportunity is optimized. This model provides an alternative or complement to debt and equity financing, allowing investees to maintain financial flexibility and control of their business rather than entering into arrangements that may include restrictive debt structures or giving up an ownership stake.
NNW is a multifaceted financial news and publishing company that delivers a new generation of social communication solutions, news aggregation and syndication, and enhanced news release services. NNW's strategies help public and private organizations find their voice and build market visibility. As part of the Client-Partner relationship with FinCanna Capital, NNW will leverage its investor-based distribution network of over 5,000 key syndication outlets, various newsletters, social media channels, blogs, and other outreach tools to generate greater brand awareness for the company.
"FinCanna Capital is focused on driving growth and partnerships with vibrant businesses in the world's largest market for legal cannabis," states Sherri Franklin, Director of Client Solutions for NNW. "We look forward to assisting the company with a dynamic corporate communications campaign as it pursues opportunities in rapidly growing market verticals."
About FinCanna Capital Corp.
FinCanna provides financing to top-tier companies in the licensed medical cannabis industry in exchange for a royalty on revenues. FinCanna, led by a team of finance and industry experts, is building its diversified portfolio of royalty investments in scalable, best-in-class projects and companies in U.S. legal states, with a focus on California. For additional information visit www.FinCannaCapital.com
About NetworkNewsWire
NetworkNewsWire (NNW) is a financial news and content distribution company that provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets, (3) enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to nearly 2 million followers, (5) a full array of corporate communications solutions, and (6) a total news coverage solution with NNW Prime. As a multifaceted organization with an extensive team of contributing journalists and writers, NNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today's market, NNW brings its clients unparalleled visibility, recognition and brand awareness. NNW is where news, content and information converge.
FinCanna Executes & Increases Royalty Payments Under Agreement with Refined Resin Technologies Inc. a California Based Cannabis and Extraction Company
By GlobeNewswire, July 10, 2018
New Structure Increases Royalty Payments to 11.75% of First US$160 Million of Annual Revenues
VANCOUVER, British Columbia, July 10, 2018 (GLOBE NEWSWIRE) -- FinCanna Capital Corp. ("FinCanna") (CSE:CALI) (OTCQB:FNNZF) a royalty company for the U.S. licensed medical cannabis industry, has executed an Expanded Royalty Agreement with Refined Resin Technologies Inc.("Refined Resin") formerly known as Gram Co Holdings LLC, of Oakland, California. Refined Resin is a cannabinoid research and refinery company that provides B2B and B2C products and services to licensed dispensaries and distributors in the medical cannabis supply chain.
FinCanna will fund US$3 million in tranches to complete the original Royalty Agreement transaction that was previously announced under a binding term sheet in February 2018. In return, FinCanna will receive a tiered corporate royalty, ranging from 14% to 5.0% of Refined Resin's annual revenues, based upon agreed upon benchmarks.
Concurrently, FinCanna has also agreed to acquire an Additional Royalty for the purchase price of US$1.795 million, payment that will be comprised of US$500,000 cash and the remainder paid in common shares of FinCanna. The Additional Royalty provides FinCanna the right to receive a further royalty payment of 2% of Refined Resin's revenues. Refined Resin has the option to repurchase the Additional Royalty subject to certain terms.
With the inclusion of the 2% additional royalty consideration, the tiered royalty payments to FinCanna now range from 16% to 7.0% based on agreed upon benchmarks, with the combined royalty rate to FinCanna totaling 11.75% on the first US$160 million of annual revenues payable in perpetuity subject to certain buy-back options.
The additional payment will allow Refined Resin to increase production volumes to take advantage of strong market demand that in turn will benefit FinCanna through accelerating speed to market and advancing the royalty payment schedule.
"We are very pleased to close this transaction with Refined Resin Technologies. It's an exciting opportunity for us on a number of levels. The Refined Resin team is highly skilled in the production and management of a sophisticated extraction facility," said Andriyko Herchak, President and CEO of FinCanna Capital. "Additionally, the team has very deep connections in the distribution and retail markets and are themselves very effective brand developers and marketers. Moreover, the potential capacity of the facility, and its ability to produce high value-add products bode well for the financial future of the enterprise and commensurately, outstanding value for FinCanna shareholders."
Refined Resin has leased a facility in Oakland, California in which they are retrofitting a large, state-of-the-art medical cannabis extraction laboratory, which is expected to be operating by the end of 2018. Refined Resin's principals have extensive experience in extraction, manufacturing and business operations and intend to be premier producers of bulk quantities of THC distillate and various high value concentrates produced via hydrocarbon-based solvent extraction.
Refined Resin also plans to provide white-labeling services to licensed brands and infused product manufacturers who do not have direct access to compliant production facilities. Brands and manufacturers who work in conjunction with Refined Resin will also be able to utilize in-house distribution and marketing expertise as part of their value add service offering.
The Royalty to FinCanna begins to accrue immediately upon disbursement of the initial advance payment. Refined Resin's Annual Revenues, for purposes of calculating the FinCanna royalty, are gross revenues less any sales returns calculated in accordance with GAAP. All funds advanced in the transaction are allocated for the retrofitting and development of the Refined Resin facility in Oakland and associated designated expenses.
About Refined Resin Technologies Inc.
Refined Resin Technologies, based in Oakland, California, is a cannabinoid research and refinement company focussed on the medical cannabis industry to provide B2B and B2C products and services to licensed dispensaries, infused product manufacturers and numerous others in the medical cannabis supply chain.
About FinCanna Capital Corp.
FinCanna provides financing to top-tier companies in the licensed medical cannabis industry in exchange for a royalty on revenues. FinCanna, led by a team of finance and industry experts, is building its diversified portfolio of royalty investments in scalable, best-in-class projects and companies in U.S. legal states, with a focus on California. For additional information visit www.fincannacapital.com and FinCanna's profile at www.sedar.com.
Should FinCanna (CALI.C) shareholders worry about California banks?
June 28, 20180
FinCanna Capital (CALI.C) has created a California-focussed portfolio of royalty investments in U.S. cannabis companies.
A royalty company lends money to a producer in exchange for a chunk of their future product or cash flow. The opportunity exists because cannabis companies in the U.S. have limited access to capital.
On January 1, 2018 recreational pot was legalized by California voters.
A month ago, Senator Bob Hertzberg (D) introduced a bill which would allow state-chartered banks to enter the burgeoning cannabis market, which is projected to grow to $7 billion annually by 2020 in California.
“Many of these companies were under constant threat of getting busted by the feds,” Hertzberg said in an interview with the L.A. Times, “If the risk of federal intervention is eliminated, cannabis businesses will feel more confident about opening an account with our limited state charter.”
“The bill, SB 930, which was recommended by the Senate Banking and Financial Institutions Committee, would create a new, limited-purpose state charter for privately financed banks under a program that would be overseen by the state Department of Business Oversight,” stated the L.A. Times.
“The measure would allow cannabis firms to deposit money in state-licensed banks, which would issue checks to the businesses for use in paying rent and state and local taxes and fees, as well as for paying vendors for goods and services provided to their businesses. The pot firms could also buy state and local bonds”.
An alert Equity Guru reader, “Omar” spotted that this could have an impact on FinCanna’s business model.
“What effect will the recent legalization and deregulation of banks towards funding weed enterprises will have on FinCanna?,” asked Omar, “I spoke with one person from FinCanna who said that this is something they’ve planned for. Number one, they have a number of contracts in the pipeline. And number two, royalty financing companies are typically a more attractive option than banks and their interest heavy loans.”
Our response:
“Omar, as a general principal, FinCanna won’t benefit from weed companies having alternative financing opportunities (to royalty/streaming deals). Bank loan rates are typically lower than the rates available to small-cap publicly traded companies.
However… it’s one thing for the state government to tell the banks, “You can invest in weed companies” – it’s quite another for a commercial loans officer in Oakland to put her career on the line and green light a $20 million loan.
The mining industry provides an instructive model. Billions of dollars of capitalization, but VERY low participation from the banking industry. Banks don’t employ geologists, and they don’t employ cannabis and branding experts, so they are going to be gun shy in taking risks. In summary, I agree with your conclusion, but I think risk-averse-bankers may be a bigger factor than high-interest-rates-at-commercial banks.”
The proposed regulation is intended to stop weed company accountants wandering around with duffle bags full of cash – not to open investment floodgates into a frontier industry.
The FinCanna business model – dumbed down – is this:
Money – a percentage of revenue – regardless of productions costs Minimal ongoing cash costs – Initial investment only. Low burn rate – small number of employees Diversification – multiple projects across multiple sub-sectors
On June 27, 2018 FinCanna announced that it has increased the size of its non-brokered private placement from $3 million to $5.5 million. FinCanna will issue up to 18,333,333 Units at a purchase price of $0.30 per Unit.
FinCanna intends to use the net proceeds from the Private Placement to fund additional royalty investment opportunities and the Company’s ongoing working capital and general corporate purposes.
On June 7, 2018 FinCanna announced that “Cultivation Technologies (CTI) its first investment in California, has achieved USD $1 million in cumulative revenue since it commenced commercial operations in late January 2018.”
According to the press release, “CTI is working to maximize the commercial potential of its extraction facility, which can process an estimated 6,000 pounds of biomass per month, which translates to approximately 3.7 million grams of raw cannabis oil annually. FinCanna is entitled to receive 50% of the profits from this extraction facility.”
On June 04, 2018 FinCanna announced that Coachella Premium brand of cannabis concentrates and vape cartridges is expanding its retail presence, securing distribution in 10 dispensaries across California.
Coachella Premium gets craft cannabis from artisan licensed cultivators to produce high-quality California concentrates.
The 10 new locations include, Connected Cannabis (multiple locations), Lighthouse (Coachella), 420 Central (Santa Ana), and From the Earth (Santa Ana).
Will California banks invest in the weed industry?
Probably.
But when?
On June 26, 2018 Aurora Cannabis (ACB.TSX) announced a $200 million debt facility with the Bank of Montreal (“BMO”).
The facility will consist of a $150 million term loan and a $50 million revolving credit facility The debt facility will be secured by Aurora’s production facilities, including Aurora Sky, Aurora Mountain, and Aurora Vie.
“This is by far the largest traditional debt facility in the cannabis industry to date,” stated Terry Booth, Aurora CEO.
So, a half decade after Bay Street entered the weed business, Canadian bankers are finally dipping their toes in.
Should FinCanna shareholders worry about California banks?
Not now.
Not any time soon.
Full Disclosure: Equity Guru has no commercial relationship with FinCanna, but the writer does own stock.
Volume was more important lastly but represented Sell orders, the accumulation-distribution line is down so we are still in the distribution step, are we at the end of this distribution-downtrend step ??? only imho.
distribution of warrants has been already done, it is already in the filings of the company. Their strike price is above the level of the pps, their expiration is in august 2018 and in 2019.
That is why I put money only if I see a stabilization of the pps after going down. For me a dip is good if he is followed by a stabilisation, just imo.
did you see the news ? seems to be in good progress. one thing is good but we have to wait before to invest = the pps is going down since the beginning. we can see a good accumulation line till june but I think it will go up again. This company is on my radar, good business model, no P and D, they build their business step by step.
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