Cannabis
Stock News: General Cannabis (OTCQB: $CANN) Announces 2016 Fourth Quarter and
Year-End Results
Year-Over-Year Revenue Growth of 69
Percent Recorded
DENVER - March 31, 2017
(Investorideas.com Newswire) General Cannabis Corp (OTCQB: CANN), the comprehensive
resource to the regulated cannabis industry, today announced financial results
for the year and quarter ended December 31, 2016.
"Our year-over-year revenue
growth of 69 percent and quarter-over-quarter revenue growth of 13 percent
comes from both organic growth and a full year of expanding the businesses we
launched in 2015," said Robert Frichtel, Chief Executive Officer of
General Cannabis. "With 28 states and the District of Columbia now having
legalized medical marijuana, of which eight states also legalized recreational
use, there is a tremendous opportunity for us to significantly expand our
business in 2017."
"We also have been focusing on
managing our operating costs and expenses, and incurred only an 11 percent
year-over-year increase, even as our revenue grew" Frichtel added.
"We have demonstrated our ability to acquire and develop substantial
companies that serve this rapidly expanding industry."
Financial
Highlights
The following tables summarize our
2016 year-end and fourth quarter results:
The significant increase in the
"Other expense" category for the quarter and year ended December 31,
2016, was due almost entirely to non-cash expenses associated with warrants
issued with our new debt and retiring our old debt. For more information on
these transactions, see Capital Raise below.
"I am excited by the
recapitalization and growth of our business in 2016," said Michael
Feinsod, Executive Chairman of General Cannabis. "To date, warrant
exercises from the recapitalization have resulted in cash of $1,160,000 and
principal reduction of $670,000. We are well-positioned to acquire additional
businesses and assets in 2017, as well as expand into new markets. We continue
to prove that we have one of the strongest platform in the industry and are
poised for continued growth."
Current Business
Trends and 2017 Outlook
- We expect to make more
acquisitions in 2017. We are currently evaluating opportunities in all
areas of regulated cannabis. We remain well capitalized and positioned to
help businesses expand rapidly.
- The trend towards state
regulated marijuana is accelerating. All of our businesses continue to
enjoy significant demand and we are expanding our Iron Protection Group
into additional states in 2017.
- We are already working with
clients in California, Maryland, Nevada and Pennsylvania as they respond
to new voter mandates. Next Big Crop has the skills and experience to
assist operators and investors as they take advantage of regulated
cannabis expansion into 28 states.
- We expect continued growth
in Chiefton as we roll out our marijuana-specific marketing/advertising
agency format.
- GC Supply had a strong
quarter and is poised to continue this relationship-based service to our
clients in existing and new markets.
- We anticipate rolling out
new internally started initiatives in 2017: ◦Next Big Crop's Management
Service program is accelerating. We plan to continue our active business
of helping licensed producers build, open, and manage cultivation sites
and retail locations, with the most cutting-edge technologies available.
- Canna Runner, our cash
transport business, anticipates significant growth in 2017, as Colorado
Transport Rules go into effect. This IPG subdivision already provides
cash transport for numerous Colorado dispensaries.
- A banking solution. Using
our corporate headquarters ("The Greenhouse"), and its existing
hard assets, we are remodeling the facility to provide a turnkey solution
for a banking operator seeking to service the regulated marijuana
industry in a standalone facility.
Capital Raise
In September, we completed a $3.00
million debt refinancing. We received $2.45 million of cash for issuing the 12%
Notes. $550,000 of our long-term debt was converted into 12% Notes, and we used
some of the proceeds to retire all of our other long-term debt, which totaled
approximately $912,000. The new capital provides General Cannabis the working
capital necessary to actively pursue new acquisitions and investment
opportunities. As of March 30, 2017, 3.3 million warrants have been exercised,
for which we have received cash proceeds of approximately $1.16 million and a
reduction in 12% Note principal of approximately $670,000. The remaining 5.7
million of unexercised warrants issued with the debt offering could provide up
to approximately $2.98 million of additional proceeds if fully exercised on a
cash basis. A summary of the transaction is as follows:
- $3.00 million of 12% notes
were issued on September 21, 2016.
- Cash interest is payable
quarterly.
- The notes mature on
September 21, 2018.
- In connection with the
issuance of the Notes, 9 million warrants to purchase common stock were
issued.
- If the company's common
stock closes above $5 for 10 consecutive days, the Company may call the
warrants, giving the holder 30 days to exercise.
- The warrants expire on
September 21, 2019.
- The warrants have certain
anti-dilution and re-pricing provisions. The latter require us, under
GAAP, to record changes in the fair value of the warrants as income or
expense, which may have a significant non-cash impact to our results of
operations.
About General
Cannabis Corp
General Cannabis Corp is the
all-in-one resource for the highest quality service providers available to the
regulated cannabis industry. We are a trusted partner to the cultivation,
production and retail sides of the cannabis business. We do this through a
combination of strong operating divisions such as security, marketing,
operational consulting and products, real estate and financing. As a
synergistic holding company, our divisions are able to leverage the strengths
of each other, as well as a larger balance sheet, to succeed. Our website address
is www.generalcann.com.
Forward-looking Statements
This presentation contains
forward-looking statements that relate to future events or General Cannabis'
future performance or financial condition. Such statements include statements
regarding the opportunity for us to significantly expand our business; statements
that we are well-positioned to acquire additional businesses or expand into new
markets; statements that we expect to make more acquisitions; statements that
we expect continued growth; statements that we are poised to continue
relationship-based service; and statements that we plan to continue our active
business of helping licensed producers. Any statements that are not statements
of historical fact, such as the statements above and including statements
containing the words "plans," "anticipates,"
"expects" and similar expressions, should also be considered to be
forward-looking statements. These forward-looking statements are not guarantees
of future performance, condition or results and involve a number of risks and
uncertainties. Actual results may differ materially from those in the
forward-looking statements as result of a number of factors, including those
described from time to time in General Cannabis' filings with the Securities
and Exchange Commission. General Cannabis undertakes no duty to update any
forward-looking statements made herein.
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