8-K
TREES Corp (Colorado) (CANN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2020
GENERAL CANNABIS CORP
(Exact Name of Registrant as Specified in Charter)
| Colorado | 000-54457 | 90-1072649 |
|---|---|---|
| (State or other jurisdiction<br><br><br>of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 6565 E. Evans Avenue Denver, Colorado | 80224 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (303) 759-1300
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
[_]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchangeon which registered |
|---|---|---|
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On March 30, 2020, General Cannabis Corp (the “Company”) issued a stockholder letter announcing expected revenue for its year ended December 31, 2019. The Company has furnished a copy of this letter as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K under Item 2.02 “Results of Operations and Financial Condition” and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 8.01. | Other Events. |
|---|
The Company is relying on the order issued on March 4, 2020, by the U.S. Securities and Exchange Commission (Release No. 34-88318) to extend the filing date of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The order provides public companies with up to an additional 45 days to file with the Securities and Exchange Commission reports under the Securities Exchange Act of 1934, as amended, including Annual Reports on Form 10-K, if the company is unable to meet the filing deadline due to circumstances relating to the novel coronavirus, COVID-19.
The Company’s operations and business have been disrupted due to the unprecedented conditions and travel restrictions surrounding the COVID-19 pandemic spreading throughout the United States. These disruptions have resulted in limited access to the Company’s facilities and have interfered with management’s ability to work with its independent accountants, professional advisors and support staff in order to complete the Company’s financial statements and related disclosures that will be included in the Company’s Form 10-K. Notwithstanding the foregoing, the Company expects to file its Form 10-K for the year ended December 31, 2019, no later than May 14, 2020, which is 45 days from the original filing deadline of March 30, 2020, for such Form 10-K.
The Company is also supplementing the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, with the following risk factor regarding the impact of COVID-19 on the Company’s business:
The Company’s business, results of operations and financial condition may be adversely affected by pandemic infectious diseases, particularly the novel coronavirus strain known as COVID-19.
Pandemic infectious diseases, such as the current COVID-19 strain, may adversely impact the Company’s business, consolidated results of operations and financial condition. The global spread of COVID-19 has created significant volatility and uncertainty and economic disruption. The extent to which COVID-19 impacts the Company’s business, operations and financial results will depend on numerous evolving factors that the Company may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; the effect on the Company’s customers and customer demand for the Company’s services, products and solutions; the Company’s ability to sell and provide its services and solutions, including as a result of travel restrictions and people working from home; the ability of the Company’s customers to pay for the Company’s services and solutions; and any closures of the Company’s offices and the offices and facilities of the Company’s customers. COVID-19, as well as measures taken by governmental authorities to limit the spread of this virus, may interfere with the ability of the Company’s employees, suppliers, and other business providers to carry out their assigned tasks or supply materials or services at ordinary levels of performance relative to the requirements of the Company’s business, which may cause the Company to materially curtail certain of its business operations. Any of these events could materially adversely affect the Company’s business, financial condition, results of operations and/or stock price
Cautionary Note Regarding Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the following: the expected timing of the filing of the Company’s Form 10-K for the fiscal year ended December 31, 2019, and the potential impacts on the Company’s business, financial, condition, results of operations and/or stock price of the novel coronavirus, COVID-19. Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words “may,” “will,” “believes,” “plans,” “anticipates,” “expects” and similar expressions. The Company has based these forward-looking statements on current expectations and projections about future events as of the date of this Form 8-K. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those factors described from time to time in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
The exhibit listed in the following Exhibit Index is filed as part of this Current Report on Form 8-K.
| Exhibit No. | Description |
|---|---|
| 99.1 | Stockholder letter dated March 30, 2020 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: March 30, 2020
| GENERAL CANNABIS CORP | |
|---|---|
| By: | /s/ Steve Gutterman |
| Name: | Steve Gutterman |
| Title: | Chief Executive Officer |
Exhibit 99.1
Exhibit 99.1
Dear Stakeholders:
As we come together during these unprecedented times, our sincerest hope is that you, your families and friends are safe and in good health. Our collective focus is, first and foremost, on our stakeholder’s health and safety. At the same time, we recognize that the cannabis industry finds itself a source of relief and support for many people.
Our world has taken a turn none of us could have ever anticipated—and the U.S. economy faces historic pressure as a result of COVID-19. Where shelter-in-place restrictions have been enacted, marijuana-related businesses have been deemed “essential” along with food and agriculture, transportation, energy, financial services, communications and information technology.
Clearly, the COVID-19 outbreak has challenged our business operations. Nonetheless, we start with this news: General Cannabis Corp enjoyed record revenue in 2019. In fact, we **** expect to report revenues for the year ended December 31, 2019 at approximately $6.0 million, which is up more than 30% from the prior year, led especially by the continued strong performance from Next Big Crop (NBC), our cultivation consulting business.
At the close of last year, we made a strategic decision to focus on the acquisition of state licensed cannabis cultivation, manufacturing and retail operations in mature markets, primarily Colorado and California. We also streamlined our operations to ensure our capital was being put to use most efficiently, discontinuing our Security and Consumer Segments, which were performing well but without the margins that we felt justified continued investment. At the same time, we increased our focus and investment in NBC. Since acquiring NBC in 2015, we have continued to grow market share in the design, construction and management of regulated marijuana cultivation in retail facilities throughout the country. Our confidence in NBC’s potential to drive continued revenue growth opportunities in existing and newly legalized states is significant. Equally important, our operating experience at NBC enables us to identify, acquire and operate underperforming cultivation assets.
Although our definitive acquisition agreement to acquire 75 Farms, a light deprivation greenhouse cultivation facility outside of Boulder, Colorado, is subject to closing conditions including the approval of the State of Colorado, we believe we can significantly increase revenues from the facility by leveraging NBC’s capabilities following the closing of the transaction. We also believe that if the State of Colorado approves the acquisition, we will be able to close subsequent transactions more quickly in Colorado versus our competitors.
On March 20, 2019, we closed the sale of our Denver office building, whereby we paid down all secured debt. Further, we also successfully re-financed and extended the maturity of other outstanding debt. And although the need for remote working and related disruptions due to the COVID-19 crisis will result in our 10-K filing being delayed, we are on track to complete that filing shortly.
At a time of great uncertainty, our top priority is the needs of our team, our business partners and our stakeholders. Like so many companies, we have organized our management team and dedicated employees to remain fully operational through this disruption in our lives and our business.
As always, we appreciate your support and confidence. Please feel free to reach out at any time. And stay well.
Sincerely,
| Michael Feinsod | Steve Gutterman |
|---|---|
| Executive Chairman | Chief Executive Officer |
Note: An overview of our business strategy can be found here:
https://www.generalcann.com/wp-content/uploads/2020/01/Cannabis-3.0-new.pdf
About General Cannabis Corp.
General Cannabis Corp is the comprehensive national resource for the highest quality service providers available to the regulated cannabis industry. The Company is a trusted partner to the cultivation, production and retail sides of the cannabis business. It achieves this through a combination of strong operating divisions such as security, operational consulting and products, consumer goods and marketing consulting, and capital investments and real estate. As a synergistic holding company, the Company’s divisions are able to leverage the strengths of each other, as well as a larger balance sheet, to succeed. The Company’s website address is www.generalcann.com.
Forward-looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the following: the impact of COVID-19 on our business and operations; our confidence in the potential of NBC to drive continued revenue growth opportunities; the ability to close the acquisition of 75 Farms; the ability to significantly increase revenues from the 75 Farms facility by leveraging NBC’s capabilities; and the organization of our management team and employees to remain fully operational through the current disruption. Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words “may,” “will,” “believes,” “plans,” “anticipates,” “expects” and similar expressions. General Cannabis has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including (i) the extent to which COVID-19 impacts our business, operations and financial results, which will depend on numerous evolving factors that we may not be able to accurately predict, including without limitation the duration and scope of the pandemic and governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic, all of which could materially adversely affect our business, financial condition, results of operations and/or stock price, (ii) that the pending 75 Farms transaction, which is subject to closing conditions, may not be consummated in a timely manner or at all, and (iii) those factors described from time to time in General Cannabis’s most recent Annual Report on Form 10-K and most recent Quarterly Reports on Form 10-Q under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. General Cannabis undertakes no duty to update any forward-looking statements made herein.