8-K

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): August 9, 2019

GENERAL CANNABIS CORP

 (Exact Name of Registrant as Specified in Charter)

Colorado	000-54457	90-1072649
(State or other jurisdiction 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)

[_]

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))

[_]

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 exchange on 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 August 12, 2019, General Cannabis Corp (the “Company”) issued a press release announcing results for the quarter ended June 30, 2019. A copy of the press release is furnished and attached hereto as Exhibit 99.2.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 9, 2018, the board of directors (the “Board”) of the Company appointed Seth Oster to the Board, with such appointment effective as of such date. In addition, the Board appointed Mr. Oster as chair of its nominating and corporate governance committee. In connection with his appointment, Mr. Oster was granted an option (the “Option”) to purchase 100,000 shares of the Company’s common stock on August 9, 2019, which vests in full on the one-year anniversary of the date of grant. The Option was granted pursuant to the Company’s 2014 Equity Incentive Plan. The exercise price of the Option is $1.10 per share, which was the closing price of the Company’s common stock on the date of grant. There is no family relationship between Mr. Oster and any of our other officers and directors. There are no understandings or arrangements between Mr. Oster and any other person pursuant to which Mr. Oster was appointed as director. A copy of the press release announcing Mr. Oster’s appointment is furnished and attached hereto as Exhibit 99.3.

Item 7.01. Regulation FD Disclosure.

On August 9, 2019, the Company issued a press release announcing it has entered into a non-binding term sheet to acquire substantially all of the assets of a licensed recreational cannabis cultivator in Denver, Colorado. A copy of the press release is furnished and attached hereto as Exhibit 99.1.

The information in Items 2.02 and 7.01 of this Current Report on Form 8-K and the Exhibits 99.1, 99.2 and 99.3 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press release, dated August 9, 2019
99.2	Press release, dated August 12, 2019
99.3	Press release, dated August 12, 2019

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: August 13, 2019

GENERAL CANNABIS CORP
By:	/s/ Brian Andrews
Name:	Brian Andrews
Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

General Cannabis Announces Entry into Term Sheet For Strategic Acquisition of
Leading Denver Vertically Integrated Cultivator and Retailer

Denver, August 9, 2019 – General Cannabis Corp (OTCQX: CANN) (the “Company”), the comprehensive national resource to the regulated cannabis industry, today announced that it has entered into a non-binding term sheet to acquire substantially all of the assets of a licensed recreational cannabis cultivator and retailer in Denver, Colorado (the “Business”).  The seller of the Business operates two indoor cultivation facilities and a retail cannabis dispensary in central Denver to manage the Business.  The Business has been rated one of the best dispensaries in Denver by High Times magazine, and is the holder of a library of world-class cannabis genetics.

This potential transaction follows the Company’s recent announcements of its entry into non-binding term sheets to acquire other licensed cannabis entities in Colorado. The Company is taking these actions based on the signing of Colorado House Bill 1090 (“HB-1090”), a recently approved law allowing public companies to own Colorado-licensed cannabis companies.  Once the regulations surrounding the implementation of the law are finalized, the Company plans to enter into a binding transaction for the Business.

It is anticipated that General Cannabis will pay consideration consisting of sixty percent cash and 40% in shares of the Company’s common stock for virtually all of the tangible and intangible assets of the Business.  The number of common shares issued at closing will be determined based on the 30-day volume weighted average price.

The term sheet also provides that the Company will enter into a five-year lease for the retail and cultivation co-located facility with options for renewal and purchase. “We are pleased to announce our plans to acquire a third licensed Colorado cannabis operator,” said Michael Feinsod, Executive Chairman and Chief Executive Officer of General Cannabis.  “This planned acquisition would expand our business to central Denver. The Business we plan to acquire would provide another strong piece to our expansion strategy.  This facility would pair us with a premier retailer and expand our customer base, allowing us to leverage our skill set as HB-1090 is implemented.  We look forward to completing the transaction and integrating this facility, and its employee team, into the General Cannabis family.  This acquisition would bring our anticipated cultivation space to approximately 45,000 square feet, our anticipated owned dispensaries to two, and one infused products manufacturer license within the state of Colorado.

“Colorado has been the national leader in legalized cannabis rollout.  With statewide trailing twelve-month retail sales of over $1.5 billion, we believe Colorado cannabis cultivators and retailers are poised to take advantage of this new significant access to the public capital markets,” said Feinsod.  “The leading operators in Colorado have achieved success operating at scale and, we believe, are excellent acquisition candidates.  We plan to continue to acquire additional licensed cannabis assets within Colorado and other regulated markets.  Our strong platform can create a synergistic opportunity for Colorado operators looking to grow with us.”

About General Cannabis Corp

General Cannabis Corp is the comprehensive national 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, operational consulting and products, consumer goods and marketing consulting, and capital investments and real estate.  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 press 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 regarding the Company’s plans to enter into a binding agreement to purchase the Business, the proposed terms of the transaction, the closing of other potential transactions, the timing of the implementation of HB-1090, the expected benefits of HB-1090, and the Company’s plans to acquire additional licensed cannabis assets within Colorado.

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 press release.  These forward-looking statements are not guaranteeing 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 the possibility that the proposed transaction is not consummated, changes in the Company’s share price, the benefits from the potential transactions may not be fully realized or may take longer to realize than expected, and those factors described from time to time in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statements made herein.

Contact

Brian Andrews

Chief Financial Officer

General Cannabis Corp

(303) 759-1300

EX-99.2

Exhibit 99.2

General Cannabis Announces

2019 Second Quarter Results

DENVER, August 12, 2019 – General Cannabis Corp (OTCQX: CANN) (“General Cannabis” or the “Company”), the comprehensive national resource to the regulated cannabis industry, today announced financial results for the quarter ended June 30, 2019.

Financial Highlights

The following table summarizes our results of operations:

		Three months ended June 30,
		2019		2018	Percent
		(Unaudited)			Change
Segment Revenues
Security	$	507,556	$	614,281	(17)%
Operations		792,642		402,287	97%
Consumer Goods		28,892		97,973	(71)%
Investments		27,775		--	100%
		1,356,865		1,114,541	22%
Total costs and expenses		3,843,252		3,605,858	7%
Operating loss		(2,486,387)		(2,491,317)	--%
Other expense		408,415		1,177,980	(65)%
Net loss	$	(2,894,802)	$	(3,669,297)	(21)%
Loss per share – Basic and diluted	$	(0.11)	$	(0.10)	10%

		Six months ended June 30,
		2019		2018	Percent
		(Unaudited)			Change
Segment Revenues
Security	$	1,072,148	$	1,166,258	(8)%
Operations		1,572,743		708,301	122%
Consumer Goods		58,667		182,464	(68)%
Investments		42,596		--	100%
		2,746,154		2,057,023	34%
Total costs and expenses		8,463,197		7,714,822	10%
Operating loss		(5,717,043)		(5,657,799)	1%
Other expense		1,691,454		2,477,885	(32)%
Net loss	$	(7,408,497)	$	(8,135,684)	(9)%
Loss per share – Basic and diluted	$	(0.23)	$	(0.23)	--%

“We have surpassed $1 million in revenue for the fifth consecutive quarter, with a 34% increase in year-to-date revenue in 2019 compared to 2018,” said Brian Andrews, Chief Financial Officer of General Cannabis.  “During the first six months of the year, we have increased our focus on securing significant consulting contracts in emerging markets across the country and providing wholesale products to new and existing customers. Both efforts have resulted in significant increases in Operations revenue compared to the prior year. Security revenues were negatively impacted by customers deciding to forego guard services and slower than expected growth in California.  We continue to explore additional revenue streams within the Security segment, such as camera monitoring design and installation, and product transport.  In response to lower revenues from Chiefton, within our Consumer Goods segment, over the course of the last three months we have eliminated annualized overhead by approximately $350,000 in order to better match our cost structure to estimated potential revenues,” continued Mr. Andrews.

Michael Feinsod, Chief Executive Officer and Executive Chairman of General Cannabis stated “It was a busy quarter with a focus on our existing businesses while making significant other operational and business improvements as described in this release.  We expect these steps to reap benefits over the near term.   

During the quarter, we completed a registered direct offering of our common equity and subsequently paid down the majority of our debt.

We have recently opened our new CBD store and e-commerce website, STOA Wellness, which offers a curated collection of quality products designed for high performance athletes. We strive to offer high quality products derived from sustainably sourced plants. We believe this sets us apart and offers our customers a unique experience. We trust these factors will generate growing Consumer Goods revenue through the remainder of the year.”

“In addition to growing our existing lines of business, we are excited to embark in the coming months on multiple potential acquisitions we have announced as HB-1090 is implemented. As of today, we have entered into non-binding term sheets for approximately 45,000 square feet of cultivation space, a processing facility and adult use (recreational) dispensaries. Our operating history and Colorado experience have proven to be strong attractions as we engage with potential Colorado partners. To date, each of the proposed transactions would keep existing management teams in place.  We look forward to moving forward with these transactions and integrating these new teams into our General Cannabis family.  We believe that upon completion, these strategic acquisitions will create synergistic opportunities that will allow us to leverage our skill sets to help our customers succeed.”

Mr. Andrews continued “These new growth plans, both within existing business offerings and the new cultivation and distribution opportunities presented by HB-1090, has our team vitalized, motivated, and excited for the future of General Cannabis. We have a corporate platform of human resources, accounting, reporting that will enable us to quickly integrate with well-run acquisition candidates.  These skills and our reputation as one of the Best Places to Work in the Cannabis Industry by MG Magazine makes General Cannabis an attractive partner to work with in the consolidation of the Colorado market.  We believe our expansion into rapidly evolving markets, and continued focus on providing quality products and services, will continue to benefit the customers, shareholders, and employees of General Cannabis into the future.”

For our most recent SEC filings, visit us at www.generalcann.com.

About General Cannabis Corp

General Cannabis Corp is the comprehensive national 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, operational consulting and products, consumer goods and marketing consulting, and capital investments and real estate.  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 press 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 regarding potential future revenue streams, statements regarding the Company’s new CBD store and e-commerce website, STOA Wellness, generating future growth of the Company’s Consumer Goods revenue, statements regarding the improvements made by the Company that will benefit the Company in the future, statements regarding the potential completion of the Company’s proposed acquisitions, statements regarding the potential benefits to the Company of the proposed acquisitions and the Company’s plans with respect to such acquisitions, statements regarding the benefits to customers, shareholders and employees of the Company’s expansion into rapidly evolving markets and focus on providing quality products and sevices and other statements about the Company’ future performance or financial condition.

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 the possibility that the Company’s proposed transactions will not be consummated, changes in the Company’s share price, the benefits from the potential transactions may not be fully realized or may take longer to realize than expected, and other factors those described from time to time in General Cannabis’s most recent Annual Report on Form 10-K and most recent Quarterly Report 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.

Contact

Brian Andrews

CFO, General Cannabis Corp

(303) 759-1300

EX-99.3

Exhibit 99.3

General Cannabis Corp. Names Seth Oster to its Board of Directors

DENVER, CO (August 12, 2019) PRNewswire – General Cannabis Corporation (OTCQB: CANN), the comprehensive resource to the regulated cannabis industry, announced today that veteran communications and public affairs executive Seth Oster has been elected to its Board of Directors.

Oster has over 25 years of experience leading corporate communications, marketing and public affairs efforts at high levels of the federal government and in the private sector. He currently serves as Global Chief Communications Officer at leading talent and entertainment company United Talent Agency (UTA). He has previously held positions as the top communications executive for Paul Allen’s Vulcan, Inc, accounting and consulting giant KPMG, and publicly traded companies, including Napster and Stamps.com.

Oster also has an extensive background in politics—having served in both the legislative and executive branches of the U.S. government. Oster was appointed by President Barack Obama in 2009 to lead public affairs at the U.S. Environmental Protection Agency (EPA) and earlier in his career was a top aide to U.S. Senator Dianne Feinstein.

“Seth’s expertise in communications, experience with game-changing companies, and time in the government trenches all will help strengthen General Cannabis’ business as it evolves into a leader in its field,” said Michael Feinsod, Chief Executive Officer of General Cannabis Corp. “His unique perspective and counsel will be an exceptional asset as we continue to execute our strategies and enhance value for our shareholders.”

Oster is a graduate of The George Washington University in Washington, D.C. He has also served on the boards of a variety of non-profit organizations and as a member of the Pacific Council on International Policy.

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 press 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, but are not limited to, statements regarding the Company’s anticipated growth, possible future business expansions and acquisitions, future sales and initiatives, and position as leaders in the industry.

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 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 changes in the Company’s share price, and those factors described from time to time in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. The Company undertakes no duty to update any forward-looking statements made herein.

Contact

Brian Andrews
Chief Financial Officer
General Cannabis Corp
(303) 759-1300