Key Takeaways; Cannabis Sector

• iPower reported fiscal second quarter 2022 results.
• Ayr Wellness closed $20 million acquisition of Levia cannabis infused seltzer.
• Trulieve bought Arizona cultivation facility for $13.75 million.
• InterCure to acquire Israeli Cannabis Company Better for $35 million.

Key Takeaways; Psychedelic Sector

• Awakn’s Prof. Celia Morgan named ‘one of the most influential women’ in psychedelics; the company also filed a patent for a new chemical series of entactogen-like molecules.

People were bemoaning the poor start to 2022 for cannabis stocks only a few weeks ago. Since then, the cannabis stocks have rebounded, resulting in some significant gains. The increase, which has been aided by increased trading volumes, has outperformed the larger stock market and other high-risk sectors, and cannabis stocks are now the strongest performers’ year-to-date. Below is a weekly roundup for the companies that made the headlines this week in the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: iPower

iPower Inc. (NASDAQ: IPW), a leading online hydroponic equipment supplier and reseller, released financial results for the fiscal second quarter ending December 31, 2021 on February 14, 2022.

From the results that were announced, total revenue increased 52 percent to $17.1 million in the fiscal second quarter of 2022, compared to $11.3 million in the same time of fiscal 2021. Greater in-house product sales and increased demand for ventilation products drove the growth.

Additionally, in the fiscal second quarter of 2022, gross profit climbed by 53% to $7.6 million, up from $4.9 million in the same quarter of fiscal 2021. Gross margin was 44.1 percent as a proportion of revenue, up from 44.0 percent the previous quarter. A larger percentage of in-house product sales offset higher freight and input expenses, resulting in a slight gain in gross profit.

The company also reported that, in the second quarter of fiscal 2022, net income increased by 39% to $0.8 million, or $0.03 per diluted share, compared to $0.6 million, or $0.03 per diluted share, in the same period of fiscal 2021.

In addition, at December 31, 2021, cash and cash equivalents totaled $1.0 million, compared to $6.7 million at June 30, 2021. The drop was due to the timing of accounts receivables with the Company’s major channel partner, and it is not indicative of any other business or operating trend. Total long-term debt was $7.4 million as of December 31, 2021, up from $0.5 million as of June 30, 2021. Increased working capital expenses were to blame for the rise.

On Monday, February 14, 2022, at 4:30 p.m. Eastern time, the Company held a conference call to discuss the results of its fiscal second quarter ended December 31, 2021.

#2: Ayr Wellness

On February 15, 2022, Ayr Wellness Inc. (OTC: AYRWF), a leading vertically integrated multi-state cannabis operator (MSO) in the United States, announced the completion of its acquisition of Cultivauna, LLC, the owner of Levia branded cannabis infused seltzers and water-soluble tinctures.

Levia makes use of a proprietary technology that allows for a faster onset of THC effects, typically 15-20 minutes, with effects lasting up to 3 hours, providing for a more consistent consuming experience than many edible products.

The Massachusetts Cannabis Control Commission (“CCC”) approved the ownership shift on Thursday, February 10, 2022. Ayr Wellness announced this deal on September 7, 2021, and the company management must be very happy to see the deal through.

Ayr is a rapidly growing, vertically integrated, multi-state cannabis company in the United States, committed to providing the greatest quality cannabis products and customer service across its entire territory. The Company is focused on superior cultivation to create superior branded cannabis products, based on the concept that everything starts with the quality of the plant. In addition, Ayr aims to improve people’ lives every day by introducing them to the benefits and wonders of cannabis.

#3: Trulieve

Trulieve Cannabis Corp. (OTC: TCNNF), a prominent and top-performing cannabis company in the United States, said on February 15, 2022 that it had finalized the acquisition of a 64,000-square-foot cultivation facility in Phoenix, Arizona. Trulieve will pay $13.75 million in cash, with potential milestone payments contingent on earn-out and escrow conditions.

The new cultivation facility boosts the company’s supply chain capacity and becomes Trulieve’s fifth in Arizona. It will also help in providing flower for medical patients and adult-use clients at the company’s 17 dispensaries across the state. Avondale, Casa Grande, Chandler, Cottonwood, Glendale, Guadalupe, Lake Havasu, Mesa, Peoria, Phoenix, Scottsdale, Tempe, and Tucson are among the Arizona Trulieve locations.

Trulieve is a vertically integrated cannabis company and multi-state operator in the United States, operating in 11 states and with market positions in Arizona, Florida, and Pennsylvania. Trulieve is positioned for rapid development and expansion, leveraging its hub model to gain scale in retail and distribution in new and existing countries. The company’s shares are traded on the OTC market under the symbol TCNNF and they are listed on the Canadian Securities Exchange (CSE) under the symbol TRUL.

#4: InterCure

Israeli-based cannabis producer InterCure Ltd. (NASDAQ: INCR) also known as Canndoc is buying medical cannabis company Cann Pharmaceutical Ltd. also known as Better in a deal valued at $35 million. It is expected to close at the beginning of the third quarter of 2022.

InterCure is Israel’s largest licensed cannabis producer and one of the first to offer Good Manufacturing Practices (GMP) certified and pharmaceutical-grade medical cannabis products. InterCure leverages its market-leading distribution network, international partnerships, and a high-margin vertically integrated “seed-to-sale” model to lead the fastest growing cannabis global market outside of North America. Better is a pharmaceutical-grade medical cannabis company, with leading expertise in cannabis cultivation, marketing, commercialization, and research of medical cannabis products for a variety of medical indications.

InterCure said that the acquisition of Better is expected to further strengthen InterCure’s leadership position in the pharmaceutical-grade medical cannabis market. In addition, the acquisition is expected to create an immediate value creation opportunity with revenue synergies estimated at NIS 50 million for the upcoming year.

Better’s leading brand, Better is driven by a unique genetic portfolio that is consistently in high demand among medical cannabis patients both in Israel and internationally. Better also has advanced pesticide-free cultivation methods with both patient health and environmental advantages.

Better are pioneers in formulating cannabis into a medical product in Israel and the rest of the world. In clinical research regarding the treatment for refractory epilepsy in children and adolescents who have not responded to pharmacological treatment, patients supplied with Better’s lead therapy strain EP1 had greater efficacy of reducing seizures and less adverse effects as compared to other medical cannabis-based products including Epidiolex.

Amos Cohen, InterCure CFO said: “InterCure is continuing its growth momentum while leading the consolidation of the medical cannabis market. This acquisition is a first of its kind and is another step in the implementation of our strategy and strengthens InterCure’s position.”

InterCure shares are traded on the NASDAQ (INCR), Toronto Stock Exchange (INCR.U) and Tel Aviv Stock Exchange (INCR).

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTCQB: AWKNF), a biotechnology company that researches, develops, manufactures, and distributes psychedelic medications to treat addictions, announced on 15 February, 2022, that Professor Celia Morgan, Head of Ketamine-Assisted Therapy for Addiction at the company, was named one of Insider’s 16 most prominent women driving the future of psychedelics.

Professor Morgan recently published data from a Phase II A/B trial in the American Journal of Psychiatry, demonstrating the efficacy of ketamine-assisted therapy for the treatment of alcoholism. The results showed that Ketamine-assisted therapy resulted in total abstinence in 162 of 180 days during the next six months, an increase in abstinence from roughly 2% prior to the experiment to 86 percent six months afterwards.

Professor Morgan is also the principal investigator for the world’s first ketamine therapy research for gambling addiction, which was announced in August 2021. This is the first study of its kind to look into psychedelics as a therapy for a behavioral addiction. The study’s expansion to other behavioural addictions, such as Binge Eating Disorder, Compulsive Sexual Behavior, and Internet Gaming Disorder, was approved last month. Morgan’s work has received approximately $8 million in grant funding from the UK government and other sources.

In addition, Awakn announced on February 17, 2022 that the company aims to strengthen its intellectual property portfolio and pipeline for the treatment of addictions with the filing of a patent application for a new chemical series of entactogen-like molecules. Entactogen-like molecules are a class of psychoactive substances that produce distinctive emotional and social effects that Awakn believes has great potential to treat both substance and behavioural addictions.

This Awakn’s recent patent application, which covers the new chemical series, marks yet another important step forward in the creation of next-generation entactogens and marks a significant milestone in the company’s therapeutic research program. The application adds to Awakn’s pipeline and position as a global leader in the field of psychedelic biotechnology.

Key Takeaways; Cannabis Sector

• Schwazze completed $75 million acquisition.
• Israeli medical cannabis company InterCure reported its preliminary Q4 financial results.
• Cannabis REIT Chicago Atlantic lent $34 million to FarmaceuticalRX.
• Red White & Bloom closed the acquisition of Michigan marijuana operator PharmaCo.
• Weak cannabis sales drove Canopy Growth Q3 revenue 8% lower to C$115 million.
• Aurora cannabis Q2 revenue decreased by 10%; However, they beats estimates.
• Harborside closed $77.3 million debt.

Key Takeaways; Psychedelic Sector

• Awakn to host fireside chat with Dr. Ben Sessa.
• Cybin announced grant of U.S. patent.

It was a busy week in the cannabis sector. The week was full of action as more companies in the sector reported their earnings while others closed some acquisitions deals. Below is a weekly roundup on the cannabis and psychedelics sectors. Make sure you follow through to the end to get the latest updates in these sectors.

Top Marijuana Companies for Week

#1: Harborside

Harborside Inc. (OTC: HBORF), a vertically integrated marijuana company situated in Oakland, California, has completed the first tranche of a $77.3 million loan financing agreement.

The move came as part of the company’s previously announced merger with Urbn Leaf, a San Diego-based retailer, and Loudpack, a Los Angeles-based cultivator, processor, and distributor.

Harborside said in a news release that the first tranche of financing from Pelorus Equity Group is worth $45.4 million, with around $15.5 million coming to Harborside, $16.4 million to Loudpack, and $13.5 million to Urbn Leaf.

When the business combination is finalized, the California Corporation expects to change its name to StateHouse Holdings. The deal is expected to finalize in March, pending shareholder and regulatory clearances, among other things, according to Harborside.

The company used some of the financing to pay off $12 million outstanding under a senior secured revolving credit facility.

“Proceeds from the first tranche of the roll up financing will be used to retire certain existing loans, to fund closing costs and interest reserves, and to provide additional working capital to the three companies,” according to the Harborside release. “Proceeds from the second tranche will be used primarily for working capital purposes and for growth capital of StateHouse.”

The second tranche of financing from Pelorus will be worth $31.9 million.

Harborside also announced it was terminating a $10 million private placement of equity units that it announced along with the business combination in November. In addition, Pelorus said in a release that its financing to Harborside carries a nominal interest rate of 10.25%.

#2: Canopy Growth

Canopy Growth Corporation (NASDAQ: CGC) lost 115 million Canadian dollars ($90 million) in the quarter ending December 31, 2021, due to reduced cannabis sales in its key Canadian market.

The company’s third-quarter net revenue was CA$141 million, which was somewhat above than analysts’ projections. However, compared to the same period previous year, this constituted an 8% drop.

Once again Canopy continued to have difficulty selling cannabis in Canada. Recreational cannabis sales dropped to CA$47.8 million, the lowest level in over a calendar year, and a 25% drop from the same period a year earlier. Medical cannabis sales in Canada declined 7% year over year in the third quarter, to CA$12.9 million.

In Canada, gross sales of dry bud plunged almost 30% to CA$47 million in Q3, but sales of oils and softgels inched higher, to CA$8.8 million.

One of the biggest areas of concern for Canopy is the so-called 2.0 category, consisting of beverages, edibles, topicals and vapes. The company once had ambitions to rule the category, but gross sales of 2.0 products declined to CA$5.8 million, 40% lower year-on-year.

In a conference call to discuss the quarter, analyst Owen Bennett asked the company what went wrong. Canopy CEO David Klein said that “the key unlock is if we get movement on equivalency in Canada, because we just can’t sell the volumes across the market that would be necessary to get the kind of returns that we want.” He’s hopeful that comes in the not-too-distant future.

In addition, the company’s global cannabis net revenue fell 20% year-over-year to only CA$83 million in the October-December quarter. Storz & Bickel, Canopy’s vaporizer device brand, provided a bright spot, with sales rising in the quarter to CA$25.2 million.

The company’s sports nutrition brand, BioSteel, provided another area of strength. BioSteel sales soared 130%, year-over-year, to CA$17 million in the third quarter. Canopy also booked asset impairment and restructuring costs worth CA$36.4 million. The company had CA$1.4 billion in cash as of Dec. 31, 2021.

Canopy shares trade as WEED on the Toronto Stock Exchange and CGC on the Nasdaq.

#3: Medicine Man Technologies “Schwazze”

Since late December, Medicine Man Technologies, Inc. (OTC: SHWZ), a Denver-based vertically integrated cannabis company, has closed on three big acquisitions totaling $75 million, including purchasing one of the region’s most distinguished stores and expanding across of state.

The announced purchases come at a time when Colorado’s cannabis industry is undergoing strong consolidation, and they buck a trend that has seen out-of-state companies buy their way into the Mile High market through acquisitions.

On Thursday, February 10, Schwazze announced that it had completed the purchase of Emerald Fields (officially registered as MCG LLC), a two-store chain with outlets in Manitou Springs and Glendale. The total compensation for the two stores is $29 million, paid 60 percent in cash and 40 percent in Schwazze common stock, according to the business.

In addition, Schwazze reported on Tuesday that it had closed on a $42 million deal in New Mexico, acquiring “virtually all the operating assets” of Reynold Greenleaf & Associates LLC, as well as the stock of Elemental Kitchen & Laboratories LLC. Schwazze now has a significant presence in the state, with ten dispensaries, four cultivation facilities, and a manufacturing facility.

These acquisitions officially make Schwazze one of only a few Colorado-based cannabis multistate operators, referred to within the industry as MSOs.

“With our regional expansion into New Mexico now complete, we have firmly graduated to the MSO category but with a differentiated regional focus which we and our stakeholders believe will be successful as we continue to position the company for rapid expansion as the market opens for adult use consumption,” Schwazze CEO and Chairman Justin Dye said in the statement announcing the deal.

#4: Red White & Bloom

Red White & Bloom Brands Inc. (OTC: RWBYF), a multistate cannabis corporation located in Canada, completed the acquisition of PharmaCo, a Michigan marijuana company. RWB, based in Toronto, declared its intention to purchase PharmaCo in July 2020, exercising its right to do so as part of a financing contract.

Red White & Bloom will issue 37 million units as part of the all-stock deal, each unit having one common share and one convertible preferred share in RWB. In addition, to satisfy obligations, RWB is issuing new units to some of PharmaCo’s debtors.

The acquisition includes: Eight cannabis stores in operation, plus two more that are ready to open; two indoor cultivation facilities; one outdoor cultivation site; and other owned properties that could be used as cultivation or retail sites. RWB already operates a manufacturing facility in Michigan.

In a news release, RWB Chair and CEO Brad Rogers said the company’s Michigan plans “include extending our branded product lines, updating our dispensaries to heighten the customer experience, creating supply chain efficiencies and growing revenue and profitability.”

Red White & Bloom shares trade on the Canadian Securities Exchange as RWB and on U.S. over-the-counter markets (OTC) as RWBYF.

#5: InterCure

InterCure Ltd. (NASDAQ: INCR), an Israeli company, released preliminary financial results for the fourth quarter of 2021 on February 8. Revenue is expected to be more than $31 million, which is three times higher than the fourth quarter of 2020 and represents a sequential increase of more than 24%. The company did not say whether it had made a profit or lost money.

The company also announced that full-year revenue is expected to reach $87 million, representing a nearly 250 percent increase year over year (YOY). The company’s revenue growth is predicted to continue beyond 2022.

On Tuesday, March 15, 2022, InterCure aims to file its full financial statements for the fourth quarter and full year of 2021.

“InterCure continues to execute, achieving record growth in the quarter ended December 31, 2021, with preliminary revenue anticipated to be $31 million, up by over three times from the fourth quarter of 2020,” said InterCure’s Chief Executive Officer, Alexander Rabinovitch. “We have now achieved eight consecutive quarters of double-digit revenue growth and increased profitability, while also crossing the one-ton mark in GMP medical cannabis products dispensed monthly during the fourth quarter, which is a world record in the GMP-certified cannabis markets. Going forward, we remain focused on maintaining our market-leading position in Israel’s cannabis market while continuing with our international expansion plans. By executing on our profitable growth strategy, InterCure is well positioned to build shareholder value as one of the leaders of the international cannabis industry.”

InterCure Ltd and its subsidiaries are involved in medicinal cannabis research, cultivation, manufacture, marketing, and distribution in Israel and overseas. It also invests in the biomedical field. The company was founded in 1994 and is based in the Israeli city of Herzliya.

#6: Aurora

Aurora Cannabis Inc. (NASDAQ: ACB) released results for the second quarter fiscal 2022, which ended December 31, 2021, after the market closed on Thursday.

Aurora reported $60.6 million in total cannabis net sales in the second quarter, up 1% year over year but down from $67 million last year. According to Yahoo Finance, this exceeded analysts’ revenue projections of $46 million. As a result, the stock is currently trading at $4.70, up over 2% from its previous close.

The company also reported a net loss of $75 million for the quarter, down from a net loss of $300 million the previous year. The average net selling price per gram of dried cannabis fell 10% to $4.20 in the first quarter of 2022, excluding the effect of bulk wholesale of excess mid-potency cannabis flower throughout the quarter, reflecting sustained downward pricing pressures due to competition.

“During the second quarter, we improved our Adjusted EBITDA by $2.5 million over Q1, moving us closer to our profitability goal. Our focus remains on further cost reductions, and we are pleased to announce today that we expect to reach the high end of the $60 to $80 million range. Our balance sheet remains among the strongest in the industry, with approximately $445 million in cash as of yesterday. This gives us significant working capital to support organic growth and positions us to pursue strategic M&A opportunities,” stated Miguel Martin, Chief Executive Officer of Aurora.

Aurora Cannabis Inc. is a Canadian company that manufactures, distributes, and sells cannabis and cannabis-derived products both domestically and abroad. It also participates in cannabis breeding, research, production, derivatives, product development, wholesale, and retail distribution.

Top Psychedelic Companies for Week

#1: Awakn

On Wednesday, March 2nd at 11:00 a.m. EST, Awakn Life Sciences Corp. (NEO: AWKN) (OTCQB: AWKNF), a biotechnology business that is studying, developing, and delivering psychedelic therapies to treat addiction, will conduct a fireside chat with Dr. Ben Sessa, Chief Medical Officer.

Dr. Sessa, author of ‘The Psychedelic Renaissance,’ among other works, is widely regarded as one of the most prominent personalities in the psychedelic industry, having spent the last 15 years at the fore. He also oversaw the first MDMA-assisted therapy clinical trial for the treatment of Alcohol Use Disorder in the world.

Dr. Sessa will address the psychedelic industrial environment and Awakn’s unique and differentiated approach to developing psychedelic therapies to treat addiction during the video webinar. He’ll also go through some of the company’s expected milestones for 2022, as well as the company’s strategy for realizing its mission of researching, producing, and providing psychedelic therapies as more than a therapy choice.

The webinar is free and open to the general audience. During the Q&A phase of the webinar, participants will have the opportunity to ask questions. If you are interested participating in this informative and educative webinar, please go here to register for the event.

#2: Cybin

On February 09, Cybin Inc. (NYSE: CYBN), a biopharmaceutical company focused on advancing “Psychedelics to Therapeutics,” announced that the United States Patent and Trademark Office granted U.S. patent 11,242,318 to the Company’s investigational deuterated dimethyltryptamine (“DMT”) compound CYB004. The company said that, a variety of deuterated variants of DMT, as well as 5-MeO-DMT, are authorized.

The patent, which covers composition of matter and protects the CYB004 drug substance as a putative new chemical entity, is set to expire in 2041 before any term extensions are considered.

Cybin’s lead experimental proprietary DMT molecule is CYB004. CYB004 has shown potential efficacy at lower doses while also enhancing the duration of pharmacological action in preclinical trials, resulting in a therapeutic profile that may mitigate the unpleasant effects commonly associated with traditional DMT.

In the second quarter of calendar year 2022, Cybin plans to file a clinical trial application for a pilot study of CYB004, with the pilot study expected to begin in the third quarter of calendar year 2022.

The Company is continuing to pursue several avenues to establish and support its patent position for research and development testing deuterated tryptamines for potential psychedelic-based mental disorder treatments.

Key Takeaways; Cannabis Sector

• Agrify raised $27 million in private placement.
• Jushi raised $10 million selling shares at $3.68.
• High Tide Q4 revenue increased 117% to C$53.9 million.
• Trulieve borrowed additional $75 million at 8%.

Key Takeaways; Psychedelic Sector

• Awakn filed a patent application for a new class of entactogen-like molecules that could be used to treat a variety of addictions.

Stocks are having their worst January since 2008, and this is putting a strain on the cannabis industry. At the beginning of this year, many cannabis stocks have lost more than 18% of their value.

Cannabis equities are generally considered speculative, and speculative assets have taken the worst of the losses in the last four weeks. Four weeks into the year, 2022 is looking a lot like 2020, with a historic downturn extending.

Despite the downtrend, some companies are still thriving in the midst of the chaos. Below is a weekly roundup on the top companies in the Cannabis and Psychedelics sectors.

Top Marijuana Company for Week

#1: Agrify

In a private placement transaction, Agrify Corporation (NASDAQ:AGFY), the most innovative and vertically integrated provider of premium cultivation and extraction solutions for the cannabis and hemp industries, announced on January 26 that it had entered securities purchase agreements with an institutional investor and other accredited investors.

According to a company statement, Agrify will issue and sell 4,020,994 shares of common stock or, in lieu of Common Stock, pre-funded warrants and accompanying warrants exercisable six months from closing to purchase up to 3,015,745 shares of Common Stock for a period of five years at an exercise price of $7.48 per share for a period of five years at an exercise price of $7.48 per share. The Common Stock and Warrants will be sold at a combined purchase price of $6.80

Members of management and the Board of Directors, including Raymond Chang, the Company’s Chairman and Chief Executive Officer, took part in the Offering on the same terms as ordinary investors, with the exception of a combined purchase price of $6.90.

Before deducting placement agent fees and estimated offering expenses, the Company anticipates to receive gross proceeds from the Offering of approximately $27.3 million.

#2: Jushi

On January 26, 2022, Jushi Holdings Inc. (OTC: JUSHF) raised $10 million in a non-brokered private placement after the company’s shares began to rise from their 52-week low of $2.95.

The offering of 2,717,392 subordinate voting shares, were sold at a price of $3.68 per share to Graticule Asset Management Asia for gross proceeds of $10 million. According to Jushi, the funds acquired will be utilized for possible strategic acquisitions as well as general company purposes.

As of December 31, 2021, the company’s pro forma cash balance, including proceeds from the Offering, was approximately $104 million.

This announcement came just a few weeks after, Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi, announced that he had purchased 66,800 Class B Subordinate Voting Shares of the company on the open market for $220,000. In total, he now owns about 19.2 percent of the issued and outstanding Subordinate Voting Shares.

Jushi is a vertically integrated cannabis firm run by a management team with extensive experience in the industry. Jushi is concentrating its efforts in the United States on acquiring branded cannabis properties across multiple states through opportunistic purchases, distressed workouts, and competitive applications.

#3: High Tide

On January 27, 2022, High Tide Inc. (NASDAQ: HITI), a major retail-focused cannabis company with bricks and mortar and worldwide e-commerce assets, released its unaudited year-end financial results for 2021. The Company had not been able to finalize its income tax provision to date due to personnel problems emerging from the pandemic. However, the company anticipates completing the work related to this matter and filing its full set of audited consolidated financial statements and management’s discussion and analysis on or before January 31, 2022.

With 109 sites across Canada, High Tide continues to hold a dominant position in the Canadian cannabis retail sector. To date, the Company’s debut of an innovative discount membership model in its retail outlets near the end of the fourth fiscal quarter of 2021 has yielded encouraging results, with same-store sales increasing during the first fiscal quarter of 2022. Due to this, High Tide plans to generate at least $70 million in revenue in the first fiscal quarter of 2022, equating to an annual run rate of more than $280 million.

The Company plans to expand its Canadian retail store portfolio to at least 150 locations by the end of the calendar year 2022, with a particular concentration on the province of Ontario. In the near future, the company wants to enter the British Columbia market, and it will continue to grow strategically in the other provinces where it now operates. Despite the fact that High Tide’s brick-and-mortar retail businesses continue to confront major obstacles as a result of the ongoing COVID-19 outbreak, the company is optimistic in its ability to maintain a favorable growth trajectory.

#4: Trulieve

Trulieve Cannabis Corp. (OTC: TCNNF), a multistate operator, announced the closing of a $75 million private placement offering, the second tranche of a $425 million debt raise, which is a marijuana industry record.

The senior secured notes have an annual interest rate of 8%, which is among the lowest in the cannabis business. They are due in 2026. The notes also have the same terms as the $350 million first tranche that closed in October.

The revenues will be used for capital expenditures and other company reasons, according to Trulieve, which is based in Florida. “This additional funding provides greater flexibility as we execute on our strategic initiatives in 2022,” CEO Kim Rivers said in a news release.

Trulieve rivals Massachusetts-based Curaleaf Holdings as the largest marijuana operator in the United States based on sales after acquiring Arizona-based Harvest Health & Recreation last year.

Trulieve is a vertically integrated cannabis company and multi-state operator in the United States, operating in 11 states and with market leadership in Arizona, Florida, and Pennsylvania. The company is positioned for rapid development and expansion, leveraging its hub model to gain scale in retail and distribution in new and existing countries. In addition, Trulieve provides ideal customer experiences and expands access to cannabis by providing innovative, high-quality products across its brand portfolio, allowing patients and customers to live without limitations.

Trulieve is listed on the over-the-counter (OTC) market under the symbol TCNNF and is listed on the Colombo Stock Exchange under the symbol TRUL.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTCQB: AWKNF), a biotechnology company focused on researching, developing, and delivering psychedelic therapeutics to treat addiction, announced on January 26 that it had filed a patent application for a new chemical series of entactogen-like molecules, bolstering Awakn’s intellectual property portfolio and pipeline for the treatment of a wide range of addictions, including but not limited to substance addictions such as Compulsive Sexual Behavior and Gambling Disorder.

The new chemical series, which Awakn has patented, represents a big step forward in the production of entactogens and marks a significant milestone in Awakn’s drug discovery research and development. Awakn’s novel pipeline of NCEs extends Awakn’s position as a global leader in the psychedelic-biotechnology business, adding to current patent applications and active clinical development programs.

In October, Awakn and their research partner Evotec stated that the NCE initiative would be expanded towards lead optimization. This research program will include the development of one or more novel entactogen-like molecules for which a patent has been filed, with the goal of moving one or more drugs into clinical development.

Key Takeaways; Cannabis Sector

• Curaleaf completed the $210 million acquisition of Bloom Dispensaries in Arizona.
• Canadian retail cannabis sales fell 3% from October in November, rising 36% from a year ago.

Key Takeaways; Psychedelic Sector

• Awakn signs MOU with MAPS: The company also announced publication of paper; “Debunking the myth of ‘Blue Mondays’.”
• Numinus announced key milestones in MAPS-sponsored MDMA-AT for PTSD trial; the company also reported Q1 2022 results.
• BetterLife obtained positive preclinical data: Additionally, it received FDA response on pre-IND application.

Top Marijuana Company for Week

#1: Curaleaf

Curaleaf Holdings, Inc. (OTC: CURLF), a marijuana multistate operator, completed the previously announced acquisition of Bloom Dispensaries, a vertically integrated Arizona cannabis company.

According to a news release issued on Wednesday, January 19 2022, the addition of Bloom’s four Arizona retail outlets gives Curaleaf a total of 13 marijuana businesses in the state. This in turn means that in Arizona, Curaleaf gains two cultivation and processing facilities.

The total sale value was $211 million, with $51 million in cash upon closing. The remaining $160 million will be paid by Curaleaf issuing promissory notes payable on the first, second, and third anniversaries of the transaction. The third promissory note, valued at $13.85 per share, may be paid in Curaleaf shares.

Additionally, Bloom’s income in 2021 is expected to be over $66 million, according to Curaleaf.

“Arizona represents a significant market opportunity with strong long-term growth potential, and we believe the combination of our two companies will enable Curaleaf to accelerate our growth strategy in the state,” Curaleaf CEO Joseph Bayern said in a statement.

Curaleaf Holdings, Inc. is a fully integrated medical and wellness cannabis company. Cannabis Operations and Non-Cannabis Operations are the two segments in which it works. The Cannabis Operations segment is responsible for the cultivation and distribution of marijuana through retail and wholesale channels.

The Massachusetts based multistate operator, trades as CURA on the Canadian Securities Exchange and as CURLF on over-the-counter (OTC) markets in the United States.

Top Psychedelic Companies for Week

#1: Awakn

On January 19, 2022, Awakn Life Sciences Corp. (NEO: AWKN) (OTCQB: AWKNF), a biotechnology company developing and delivering psychedelic therapeutics (medicines and therapies) to treat Addiction, announced that it had signed a Memorandum of Understanding (“MOU”) with the Multidisciplinary Association for Psychedelic Studies (MAPS) to explore a partnership to use MDMA-assisted therapy to treat Alcohol Use Disorder (AUD)

Under the terms of this MOU, Awakn will explore a data licensing agreement with MAPS to support Awakn’s Phase IIb and anticipated Phase III studies for MDMA-assisted therapy for AUD in Europe.

Awakn and MAPS will also consider forming a partnership in order to obtain marketing authorization and regulatory clearance for the ethical commercialization of MDMA-assisted therapy for the treatment of AUD in Europe.

AUD is a chronic condition that affects 40 million Europeans and 390 million individuals worldwide. Alcohol use is one of the top five causes of the disease and disability in the majority of European countries, making it a ubiquitous and chronic public health issue. And for every AUD sufferer, there is a friend, a partner, or a family member who is also badly affected by it.

Awakn published the favorable results of the BIMA Phase IIa study studying MDMA-assisted therapy for the treatment of AUD in February 2021, citing a 21% relapse rate at 9 months compared to a 75% relapse rate in a separate observational group.

Additionally, MAPS reported in May 2021 that the first of two Phase III trials for MDMA-assisted therapy for the treatment of severe persistent PTSD had yielded positive findings. In this study, 88 percent of patients who had three MDMA-assisted therapy sessions, as well as twelve 90-minute non-drug preparation and integration therapy sessions, saw clinically relevant improvements in their symptoms. 67 percent of those who took part no longer met the criteria for a PTSD diagnosis.

In addition to this news, Awakn also announced the publication of a paper supporting the overall safety and tolerability of clinically administered MDMA and debunking the myth of ‘Blue Mondays’.

#2: BetterLife

BetterLife Pharma Inc. (OTCQB: BETRF), an emerging biotech company focused on the development and commercialization of 2nd-generation non-hallucinogenic psychedelic analogs for the treatment of neuropsychological disorders, reported on January 18, that an in vivo oral bioavailability and food-effect pharmacokinetic (PK) study on BETR-001 in beagle dogs had yielded positive results.

BETR-001 (2-bromo-LSD, formerly TD-0148A) is a lysergic acid diethylamide derivative that is non-hallucinogenic (LSD). BETR-001’s PK has never been studied before in a published study. It was also unknown whether the presence of meals would influence the bioavailability of BETR-001 when taken orally.

Additionally, on January 20, the company announced that it had received a written response from the US Food and Drug Administration (FDA) on its pre-investigational new drug (pre-IND) application for BETR-001’s treatment of MDD.

BETR-001 (2-bromo-LSD, formerly TD-0148A) is a non-hallucinogenic lysergic acid diethylamide (LSD) derivative that is now conducting IND-enabling non-clinical investigations as well as GMP manufacture in preparation for clinical trials.

The FDA’s answer is generally in line with the Company’s planned approach for the development of BETR-001, and it offers advice on the BETR-001 IND-enabling non-clinical toxicological studies, manufacturing strategy, and initial suggested clinical trial parameters.

#3: Numinus

Numinus Wellness Inc. (TSX: NUMI), a leader in psychedelics-focused mental healthcare, announced on January 19, that it had completed key steps to prepare to enroll participants at its clinics in the Multidisciplinary Association for Psychedelic Studies (MAPS) “A multi-site open-label extension study of MDMA-assisted psychotherapy for PTSD (MAPPUSX)”.

The Canadian study sites, led by MAPS Public Benefit Corporation (MAPS PBC) as study sponsor, have recently received regulatory approval from Health Canada, ethical approval from an Institutional Review Board (IRB), and a Section 56 exemption from the Controlled Drug and Substance Act (Canada), which will allow the use of MDMA throughout the duration of the trial.

Numinus will host the MAPPUSX Canadian sites, which will be handled through Numinus’ two newly acquired, purpose-designed clinics, allowing the Canadian phase of the MAPS-sponsored study to be completed quickly.

In other news, on Jan 20 2022, the company announced its fiscal first quarter results for the three months ended November 30, 2021.

Key Takeaways; Cannabis Sector

• Ascend Wellness openly called out MedMen for abruptly canceling their binding agreement to acquire MedMen’s New York operations.
• ScottsMiracle-Gro expands Hawthorne Gardening portfolio with acquisitions of Luxx Lighting and True Liberty Bags.
• MariMed announced agreement to acquire Kind Therapeutics; a Maryland licensed vertically integrated cannabis business.

Key Takeaways; Psychedelic Sector

• New bill introduced in Washington State would legalize Psilocybin, Magic Mushrooms.
• Awakn expanded world’s first Ketamine study beyond gambling disorder to include additional behavioral addictions including; binge eating disorder, compulsive sexual behavior, and internet gaming disorder.
• COMPASS Pathways psilocybin study of 89 healthy participants published in Journal of Psychopharmacology.

Thanks to the dual headwinds of sky-high inflation and the threat of rising interest rates, stocks appear poised for a turbulent 2022. Despite the early signs of a bear market, the cannabis sector is expected to flourish, with more states legalizing as well as more mergers & acquisitions expected to happen this year.

Here are the companies that topped the headlines this week in the cannabis sector.

Top Marijuana Companies for Week

#1: Ascend Wellness

According to Ascend Wellness Holdings, Inc. (OTC: AAWH), MedMen Enterprises Inc. “materially breached” the terms of a transaction in which Ascend would buy the majority of MedMen’s New York marijuana operations.

Under the deal, which was announced in February, Ascend would buy an 86.7 percent stake in MedMen’s New York cannabis firm in a transaction worth at least $63 million. The deal also had an option for Ascend to buy the remaining stake after the state’s adult-use marijuana market opens.

Ascend reported on December 30, 2021, that the merger had gained final regulatory approval and that the transactions would be completed “immediately.” However, in a news release on Monday, January 3, 2022, Ascend alleged that MedMen had “attempted to unilaterally terminate the investment arrangement.”

In a brief news release issued later on Monday, MedMen, based in California, said the investment deal was being terminated but didn’t disclose any other specifics.

Initially, Ascend had noted in its Monday release that MedMen had initially requested the New York State regulators to approve the transaction in March 2021. Ascend further said that the regulators have since complied with their request. But now, MedMen is disputing the (New York) Office of Cannabis Management’s explicit regulatory approval and is refusing to close the deal and further attempting to terminate the transaction.

In the news release, Ascend urged MedMen to complete the deal and promised to continue to explore all steps to persuade MedMen to honor the investment agreement and finalize the transaction.

In an effort to hold MedMen accountable, Ascend filed a letter with the US Securities and Exchange Commission and made it public in another press release on Thursday, January 6.

According to the letter sent to SEC, Ascend is worried that MedMen has failed to maintain compliance with their regulatory obligations under applicable New York laws and regulations. Ascend further claimed that MedMen and company parties failed to acquire approvals for changes in control of the company or send notices of changes in corporate officials to regulators.

As of early Saturday afternoon, MedMen had not published another statement in response to Ascend.

#2: ScottsMiracle-Gro

On Tuesday, January 4, The Scotts Miracle-Gro Company (NYSE: SMG) announced the purchase of two California-based companies, Luxx Lighting for $215 million and True Liberty Bags for $10 million. The deal is aimed at enhancing its private cannabis-related company, Hawthorne Gardening Co.

Because of a slowdown in the cannabis market and supply-chain interruptions, Scotts Miracle-Gro expects its New York-based Hawthorne Gardening hydroponic division to see a 40% drop in first-quarter revenues. This was why the company opted to boost the Hawthorne’s growth with these two acquisitions.

Luxx, situated in Los Angeles, is a leading manufacturer of lighting systems for growers, while True Liberty, based in Sonoma County, provides liners and other storage solutions for dry and cure cannabis plants.

Scotts Miracle-Gro, based in Ohio, cited the slow growth they have experienced to supply challenges that businesses in a range of industries have faced as a result of the coronavirus epidemic and extreme weather occurrences. However, the company did not go into detail about the problems, but it stated that these problems have affected sales of particular product lines they deal with.

“We are optimistic the supply chain disruptions we’ve experienced will be corrected by the end of January and we’ll be able to meet the continued demand we’re seeing for our industry-leading signature products,” Cory Miller, chief financial officer, said in the news release.

On the other hand; Chris Hagedorn, Hawthorne division president, said the acquisitions will reinforce their commitment to supply new goods and solutions to cannabis cultivators in state-legal markets.

According to Scotts Miracle-Gro, which wants to sell and distribute Luxx in burgeoning cannabis markets such as the East Coast, the brand alone is estimated to bring $100 million in annual sales.

“While the cannabis market continues to see near-term challenges from an over-production in recent months, we see the current reality as an opportunity to further distance ourselves from the competition and strengthen our business for long-term success,” Hagedorn said in the release.

#3: MariMed

Cannabis company MariMed Inc. (OTC: MRMD), agreed to buy Kind Therapeutics, a vertically integrated medical marijuana company in Maryland, in a deal worth $20 million.

According to a news release issued Wednesday, January 5, the acquisition will expand MariMed’s footprint beyond Massachusetts and Illinois into a third state. The acquisition price of $20 million will be paid in cash and promissory notes.

Under the deal, MariMed will also acquire the minority interests of one of Kind’s present owners in two of the company’s subsidiaries that own cannabis facilities in Maryland and Delaware for a total of $2 million.

In 2016, MariMed and Kind agreed to form a partnership and joint venture. But the arrangement fell apart in 2019 when Kind filed a lawsuit against MariMed and MariMed filed counterclaims against Kind.

In addition, MariMed stated that once the deal is closed, all litigation relating to Kind will be dismissed. However, the deal is still subject to a number of conditions, including regulatory approvals.

Kind got its medical marijuana processing and growing permits from Maryland regulators in 2017 and leases a facility from Mari Holdings, a MariMed subsidiary. Kind also has a “provisional license for a dispensary,” according to MariMed.

According to the MariMed statement, Mari Holdings also owns and is developing a dispensary facility for Kind in Annapolis, which is slated to open in early 2022.

Since the Maryland legalized medical cannabis and markets opened at the end of 2017, medical marijuana sales in the state have now reached $1 billion as of April 2021.

Top Psychedelic Companies for Week

#1: Washington Psilocybin Bill

SB 5660, which is a bill to legalize the supported adult use of psilocybin by people aged 21 years and above, was filed by Washington State legislators on Tuesday, January 4.

The Washington Psilocybin Wellness and Opportunity Act, which is being sponsored by Senators Jesse Salomon and Liz Lovelett, includes a Social Opportunity Program to help address the harms caused by the war on drugs, a provision to support small businesses, and accommodations for people with certain medical conditions to receive the psychedelic substance at home.

The Washington Department of Health would be empowered to give licenses to psilocybin producing facilities, testing labs, service centers, and facilitators if the Act passes. It would also establish the Washington Psilocybin Advisory Board, which will advise the Department on developing guidelines to administer the Act.

Although psilocybin is non-addictive, the bill’s sponsors recognize the advantages of its adult-supervised use. In this approach of regulation, facilitators are trained and certified professionals who give psilocybin in a safe and supportive environment at licensed service facilities.

If the deal passes, psilocybin services will be made available to people aged 21 and older for nearly any purpose. Under the supported adult use program; the Act specifies that clients do not need to have a medical condition to participate, and psilocybin services in Washington will not be considered medical diagnoses or treatment. Some clients may seek psilocybin treatments to feel more connected to nature or to perceive their interpersonal connections in a new way, as psilocybin is known to boost emotions of closeness. Others may want to improve their overall health, have a religious experience, or increase their creativity.

The Washington Psilocybin Services Wellness and Opportunity bill has only a few advances. However, this is an innovative approach to the safe and legal use of psilocybin in adults. It will allow clients to obtain safe psilocybin products from licensed specialists, as well as provide economic opportunities for residents around the state.

#2: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company focused on developing and delivering psychedelic medicines to treat addiction, announced on Wednesday, January 5, that it had received ethical committee approval to expand its existing ketamine study beyond Gambling Disorder to include three additional behavioral addictions: Binge Eating Disorder, Compulsive Sexual Behavior, and Internet Gaming Disorder.

Prof. Celia Morgan, Awakn’s Head of Ketamine-Assisted Therapy for Addiction, Professor of Psychopharmacology at the University of Exeter in the United Kingdom, and an internationally known expert in the therapeutic use of ketamine, is leading the basket study, which will be another world first.

Professor Morgan’s research will look into a new treatment approach for behavioral addictions, attempting to tap into a window in which the brain can form new connections. Using EEG, the researchers will investigate and evaluate whether ketamine can promote neuroplasticity (Electroencephalogram).

Professor Morgan expressed her thoughts by saying that they are ecstatic to broaden this research and make more breakthroughs into a field of medicine that has seen no significant pharmacological advances in far too long, despite the fact that the number of people suffering has constantly increased. She also added that she believes that the study will provide Awakn with useful information so that they can move forward with their ketamine program and help the behavioral addicts as soon as possible.

There are currently no FDA-approved pharmaceutical treatments for behavioral addictions or disorders, and the demand for novel and effective treatments has never been greater. Individuals and their families suffer from behavioural addictions, which damage physical and mental health as well as increase the risk of suicide. Binge Eating Disorder affects up to 110 million people worldwide, whereas Internet Gaming Disorder affects 238 million, Sexual Compulsive Behaviour affects up to 350 million, and Gambling Disorder affects up to 450 million.

#3: COMPASS Pathways

COMPASS Pathways plc. (NASDAQ: CMPS), a mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health, announced on 4 January 2022, the findings of a phase I study that demonstrated the feasibility of giving COMP360 psilocybin to up to six healthy participants at the same time with 1:1 support.

The Institute of Psychiatry, Psychology & Neuroscience (IoPPN) at King’s College London conducted the study, which was peer-reviewed and published in The Journal of Psychopharmacology as “The effects of psilocybin on cognitive and emotional functions in healthy participants: results from a phase I, randomized, placebo-controlled trial involving simultaneous psilocybin administration and preparation1.” The findings also revealed that there were no negative effects on thinking processes or emotional processing in the short or long term.

In 89 healthy male and female adult volunteers, the effects of two dosages of COMP360 psilocybin (10mg and 25mg) were compared to placebo. The participants were given 10mg COMP360 (n=30), 25mg COMP360 (n=30), or placebo (n=29) in a 1:1:1 ratio.

The investigational medicine was given to up to six volunteers at the same time, and they all got one-on-one psychological assistance from qualified therapists for the duration of the six-hour session. A 12-week follow-up period was included in the study. There were no significant side effects, and COMP360 psilocybin was well tolerated, with no clinically meaningful negative effects on cognitive function.

“This trial was an early component of our clinical development program for COMP360 psilocybin therapy,” said Dr. Guy Goodwin, Chief Medical Officer of COMPASS Pathways.

He also said that the study looked at the safety and feasibility of giving healthy people psilocybin at the same time with 1:1 support. In addition, he said that the study laid a solid foundation on which they have now added positive results from their phase IIb trial in 233 TRD patients and their open-label study of patients taking SSRI antidepressants and psilocybin.

He concluded by saying that they are excited to meet with the FDA early this year to finalize plans for their phase III study, which they hope to start in the third quarter of 2022.

Key Takeaways; Cannabis Sector

• Malta moved to become the first European country to legalize Cannabis for adult use.
• Two Cannabis REITs to Lend Acreage Holdings an Initial $100 Million at 9.75% for 4 Years.
• Innovative Industrial Buys $72.7 Million Sale-Leaseback Portfolio.
• HEXO Q1 Revenue Increased 29% sequentially to $50.2 Million as Loss Widened; The Company promised consumer focus after the loss.
• NASDAQ-Listed Waitr Holdings Considers Buying Cannabis Dispensary Software Company Cova for $90 Million.
• Curaleaf Borrows $425 Million for 5 Years at 8%.
• Glass House Taps $100 Million Debt Facility to Fund Buildout of California Cultivation Facility.

Key Takeaways; Psychedelic Sector

• Awakn Life Sciences Appoints Former EVP & CCO of Gilead Sciences, Paul Carter, to its Board of Directors; The Company also Reported Fiscal Third Quarter 2021 Financial Results

In this week’s roundup in the Cannabis and Psychedelic sectors, we begin with news from Europe where on Tuesday, December 14, Malta’s parliament passed a groundbreaking bill that decriminalized consumption of small amounts of recreational Cannabis, regulated home cultivation of marijuana, and permitted nonprofit cannabis clubs in the European Union country. The bill is anticipated to be signed by the president of the island nation, George Vella, in the coming days.

Malta will become the first European Union (EU) country to legalize small amounts of adult-use Cannabis for personal use under the new law. However, the bill does not regulate the commercial sale of recreational Cannabis to consumers, which means that such transactions will continue to take place in the shadows, out of reach of legal businesses – and out of sight of regulators. Instead, nonprofit cannabis clubs will be permitted, allowing for the cultivation and possession of Cannabis for distribution among members – as long as the organizations are limited to 500 persons and adhere to regulatory requirements. Also, under the new bill, cultivation of up to four plants per household will be authorized, as well as the storage of up to 50 grams of dried Cannabis at home for personal use.

Some European countries are taking measures to decriminalize Cannabis to varying degrees, but none have gone so far as to create major, regulated markets for the drug. Luxembourg recently reversed an earlier pledge to establish a fully controlled recreational marijuana market modeled like Canada’s. The country now intends to allow up to four plants to be grown at home for personal use. But the retail sale of Cannabis will remain prohibited. The new German administration has agreed to regulate recreational cannabis distribution and sale. But details on the planned German initiative, on the other hand, are scarce.

After the roundup on the key development in Europe, it is now time to go through some companies that hit the headlines with some important announcements and deals.

Top Marijuana Companies for Week

#1: Acreage Holdings

Real estate lenders AFC Gamma and Viridescent Realty Trust partnered up to lend $100 million to Acreage Holdings, Inc. (OTC: ACRHF), a multistate cannabis operator, with an option to lend an additional $50 million.

According to the December 16 news release, Acreage Holdings, which is based in New York, will use the senior secured credit facility “to fund expansion plans, repay existing debt, and provide additional operating capital.” The initial credit facility, which totals $100 million, includes $60 million from AFC Gamma, which is based in Florida, $10 million from an unnamed affiliate, and $30 million from Viridescent, which is based in Texas.

The credit facility has an annual interest rate of 9.75 percent, which will be paid monthly. And the credit facility will expire in January 2026. The news release reported that the loan is going to be secured by Acreage’s real estate “and other commercial security interests.” It was also reported that a further $50 million credit facility would be available once unspecified milestones are achieved.

“This transaction represents another strategic step in our efforts to drive profitability, strengthen our balance sheet and accelerate our growth in our core markets which will ultimately maximize shareholder value,” said Acreage CFO Steve Goertz in a statement.

Acreage also revealed that the terms of the $33 million loan arrangement announced in September 2020 had been changed.

Shares of Acreage Holdings trade on the Canadian Securities Exchange and on U.S. over-the-counter markets. The Company was formerly known as High Street Capital Partners. Acreage is a principal investment firm specializing in the cannabis industry. The Company was founded in 2014 and is based in New York, New York.

AFC Gamma trades on the NASDAQ stock exchange.

#2: Innovative Industrial

On Tuesday, December 14, 2021, Innovative Industrial Properties, Inc. (NYSE: IIPR), a real estate investment trust, said it had paid $72.7 million for a portfolio of 27 cannabis properties in Colorado, North Dakota, and Pennsylvania, excluding transaction fees. As a result, the San Diego-based REIT now controls 103 properties in 19 states totaling 7.7 million square feet of rentable space.

According to the Tuesday news release, Innovative Industrial reported that all of the assets in the recent transaction are leased for use as state-legal dispensaries, processing, and/or cultivation facilities. Innovative Industrial said that the portfolio comprises 24 locations in Colorado, two in North Dakota, and one in Pennsylvania.

The Company further reported that the portfolios are distributed under the following marijuana operators: 16 are leased to a subsidiary of New York-based multistate operator Columbia Care, three to subsidiaries of Massachusetts-based Curaleaf Holdings, four to subsidiaries of Denver-headquartered Schwazze, three to subsidiaries of Colorado-headquartered LivWell Holdings, and one to Colorado-based Kaya Cannabis.

IIPR CEO Paul Smithers said that the transactions represent an expansion of the Company’s long-term real estate partnerships with Columbia Care, Curaleaf, and LivWell and new relationships with Schwazze and Kaya.

Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on acquiring, owning, and managing specialized properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. The Company trades on the New York Stock Exchange under the ticker symbol IIPR.

#3: HEXO

After losing 117 million Canadian dollars ($91 million) in the first quarter of fiscal 2022, the struggling Quebec-based cannabis producer HEXO Corp. (NASDAQ: HEXO) is switching up its board and also promised a renewed focus on its customers. Since 2016, the Company has now lost a total of CA$885.8 million.

HEXO claimed in the news release that its acquisitions of rival cannabis producers Redecan and 48North added CA$14.7 million in sales in the quarter ending October 31, 2021. The purchases of Redecan, 48North, and Zenabis, which all closed this year, came with transaction expenses of CA$24.4 million, according to the company. In addition, impairment charges for duplicate assets and investments were CA$50.7 million, including CA$4 million in executive reorganization costs.

Despite the headwinds, CEO Scott Cooper told analysts he expects Hexo to reach profitability in the near future. “The days of unprofitable cannabis companies are numbered,” Cooper said on a call with analysts. “We believe we will get to EBITDA-positive in this current quarter.”

HEXO’s August-October quarter Adjusted EBITDA, which is a measure of profitability, was minus-CA$11.6 million. Hexo reiterated its expectation of being cash-flow positive within the next four quarters. “We will put the customer and consumer at the center of everything we do,” Cooper said.

Hexo’s sales by category in the quarter, compared to the previous quarter, were: adult-use Cannabis: CA$35.9 million (+47%), Beverages: CA$3.2 million (-40%), Canada medical: CA$668,000 (+210%), Wholesale: CA$4.1 million (+116%), and International: CA$6 million (-11%).

HEXO also announced some significant changes to its C-suite approximately two months after longtime CEO Sébastien St. Louis stepped down in October. The Company is again changing chief financial officers, which will be the fifth time a fresh executive will fill the CFO role in three years.

The current CFO, Trent MacDonald, is stepping down, effective March 11, 2022. MacDonald will continue in his role while the Company completes its search for a new CFO, per Hexo’s announcement. Also shuffled out was board Chair Michael Munzar. Hexo appointed John Bell as Munzar’s replacement, effective immediately. Bell served on Canopy Growth’s board from 2014 to 2020. Hexo also added Jackie Fletcher, vice president of science and technology, to the executive team.

The executive shake-up is part of Hexo’s “transformative plan,” which was announced concurrently with the first-quarter loss. According to the release, the plan involves solidifying its position as the No. 1 cannabis producer in Canada by market share, “with the goal of becoming the first amongst its peers to be cash flow positive from operations.”

Hexo expects to generate CA$37.5 million in incremental cash flow this fiscal year and CA$135 million in 2023 via cost reductions and revenue growth.

HEXO Corp., through its subsidiaries, produces, markets, and sells Cannabis in Canada. The Company offers its adult-use and medical products under the HEXO brand name. It provides cannabis beverages under the Little Victory, House of Terpenes, Mollo, Veryvell, and XMG brands; and cannabis products under UP Cannabis, Original Stash, and Up brand names. The Company’s shares trade as HEXO on the Nasdaq and Toronto Stock Exchange.

#4: Waitr Holdings

Waitr Holdings Inc. (NASDAQ: WTRH), an online food ordering and delivery service has expressed interest in buying cannabis point-of-sale vendor Cova Software for $90 million in cash and stock.

Waitr, which is based in Louisiana and traded on the NASDAQ under the symbol WTRH, announced on Friday, December 17, 2021, that it had signed a nonbinding letter of intent (LOI) to purchase Retail Innovation Labs, often known as Cova.

Cova has headquarters in Denver, in Colorado and Vancouver, and British Columbia, in Canada, and the Company offers services to companies throughout North America.

In a news release, the Company said there’s “no assurance that entry into the LOI will result in a definitive agreement or, if a definitive agreement is reached, the acquisition will close on the terms.” The Company also outlined that “Legal, regulatory, business and financial diligence will need to be satisfactorily completed by both the company and Cova, as well as other customary conditions and approvals.”

In the news release, Cova CEO Gary Cohen indicated his Company is open to a deal. “Combining our industry-leading retail cannabis technology with Waitr’s on-demand delivery logistics network and expertise in payments are a perfect match,” Cohen said. “This should further enable the dispensary retailers utilizing Cova software to grow and thrive.”

The planned acquisition comes at a time when the POS market is becoming increasingly competitive. More vendors have introduced point-of-sale systems in 2021 than in previous years, laying the stage for downward price pressures in the sector and consolidation among enterprises that sell the software to shops.

Additionally, Waitr announced in the news release that its plan to rebrand the Company as ASAP is moving ahead. The Company acquired the ASAP.com domain name and reserved the NASDAQ trading symbol ASAP.

Waitr Holdings Inc., together with its subsidiaries, operates an online ordering technology platform in the United States. Its Waitr and Bite Squad mobile applications (the platforms) provide delivery, carryout, and dine-in options, connecting restaurants, drivers, and diners.

#5: Curaleaf

On Monday, December 13, Curaleaf Holdings, Inc. (OTC: CURLF), a marijuana multistate operator, announced it had obtained commitments for a $425 million privately arranged debt raise. This is the largest debt raise for a U.S. cannabis company to date. In addition, the Company also secured one of the industry’s lowest interest rates.

According to the news release released Monday by the Massachusetts-based Corporation, the five-year senior secured notes carry an annual interest rate of 8%. The agreement also allows for up to $200 million in additional senior bank funding.

Due to stronger balance sheets and increasing marijuana markets, the deal is the largest illustration yet of a transition from equity to debt financing, with significant MSOs enjoying some of the lowest interest rates in U.S. cannabis sector history. St. Louis-based investment firm Stifel GMP wrote that Curaleaf’s debt cost “is equivalent to the lowest the industry has seen to date.”

Trulieve Cannabis, based in Florida, raised $350 million in October through a debt raise with an annual interest rate of 8%. Large MSOs, on the other hand, paid annual interest rates on loans ranging from 11 percent to as high as 20 percent in 2019, according to Stifel.

Curaleaf and Trulieve – the latter acquired Arizona-based Harvest Health & Recreation earlier this year – are the two biggest cannabis companies in the U.S. based on revenue. Eleven cannabis debt financings exceeding $100 million each have closed since December 2020, New York-based Viridian Capital Advisors noted in a research report this week. “Larger transactions are becoming more popular because they cater to the institutional investors entering the market looking for more liquidity,” Viridian wrote. But Viridian noted a wide debt cost spread between large MSOs and smaller plant-touching operators.

Curaleaf Holdings, Inc. operates as an integrated medical and wellness cannabis operator in the United States. It operates in two segments, Cannabis Operations, and Non-Cannabis Operations. The Cannabis Operations segment engages in the production and sale of Cannabis through retail and wholesale channels. The Company trades as CURA on the Canadian Securities Exchange and as CURLF on U.S. over-the-counter markets.

#6: Glass House Brands

Glass House Brands Inc. (OTC: GLASF), a vertically integrated California cannabis company, is borrowing up to $100 million to upgrade its recently acquired California greenhouse and other projects.

According to a news release issued Monday, December 13, Glass House will borrow $50 million under the senior secured term loan from an unnamed “US-based private credit investment fund.” Under the terms of the deal, additional loans of $25 million will be available under certain conditions.

The loans, repayable beginning in December 2023, will carry a variable interest rate of 10%-12% annually. Also, Glass House will offer the lender 2 million additional warrants, each of which can be used to purchase a Glass House share until June 2026.

The capital “will be used to fund the phased retrofit of (Glass House’s) approximately 5.5 million square feet cultivation facility currently under renovation in Camarillo, California” as well as for general corporate purposes, the Company said. Glass House acquired the property for $93 million in September.

To support Glass House’s biomass business, the Long Beach-based company stated that its initial facility upgrade would comprise “changing two greenhouses, as well as establishing a packhouse and a distribution center.

“We have a planned total footprint of 6 million square feet and projected total biomass production of approximately 1.7 million pounds, which we believe would make Glass House Brands the largest and most efficient cannabis supplier in the U.S., by a wide margin,” Glass House CEO Kyle Kazan said in a statement.

Glass House Brands was created after special purpose acquisition company Mercer Park Brand Acquisition Corp. acquired Glass House Group in April. The Company’s shares trade as GLAS on the NEO Exchange in Canada and as GLASF on the U.S. over-the-counter markets.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company developing and delivering psychedelic therapeutics (medicines and therapies) to treat addiction. On Tuesday, December 14, the Company announced the appointment of Paul Carter, former Chief Commercial Officer of Gilead Sciences Inc., as an independent member of its Board of Directors. This move subsequently increased the independent majority on the board. Awakn announced that Mr. Carter would be replacing Dr. Benjamin Sessa, who had resigned from the Board of Directors. Despite this resignation, the Company reported that Dr. Sessa would continue in his day-to-day Co-Founder and Chief Medical Officer role.

Just a day after announcing the appointment of Paul Carter, Awakn reported its financial results and business highlights for the three and nine months ended October 31, 2021. The key financial highlights included announcements that: As of October 31, 2021, the Company had approximately $5.7 million in cash and no debt. As of December 14, 2021, there were 24,887,307 million common shares outstanding. The Company also announced that it had achieved its first revenue of $31,737 via Awakn Oslo AS, compared to $Nil in the prior year.

This great financial report indicates Awakn’s significant progress in developing and delivering effective psychedelic-based therapeutics to treat addiction better.

Key Takeaways; Cannabis Sector

• Canadian marijuana company Tilray acquires a Colorado distillery for $102.9M.
• Canadian marijuana firm Fire & Flower to buy Pineapple Express Delivery.
• Marijuana product maker Valens uplists to NASDAQ.
• Illinois adult-use cannabis sales exceed $1.2 billion through November.
• Marijuana banking access remains steady, even with the demise of the SAFE Banking Act.
• Cannabis REIT Chicago Atlantic Raises $100 Million in NASDAQ IPO.

Key Takeaways; Psychedelic Sector

• Numinus Shares Q4 and Year-End 2021 Results.
• Mydecine Secures C$5.5m in Financing.
• Awakn is conducting the first-ever study of ketamine in gambling addiction to provide a new treatment.

Top Marijuana Stocks for Week

#1:  Tilray

Canadian marijuana producer Tilray, Inc. (NASDAQ: TLRY) has taken another step into the U.S. alcohol industry by acquiring Colorado-based Breckenridge Distillery, with plans to launch cannabis-infused whiskey.

The deal is worth $102.9 million, paid for by issuing 11,245,511 Tilray shares, according to a regulatory filing. The acquisition follows Aphria’s 2020 acquisition of U.S. craft brewer SweetWater Brewing Co. before Aphria and Tilray announced their merger later that year.

“We see tremendous potential for Breckenridge and our existing SweetWater brand to complement each other, expanding their respective reach and driving further profitable growth in our beverage alcohol segment,” Tilray CEO Irwin Simon said in a Wednesday, December 8, news release.

Simon added that the acquisition of the Breckenridge-based distillery “is consistent with Tilray’s strategy of leveraging our growing portfolio of U.S. CPG brands to launch THC-based product adjacencies upon federal legalization in the U.S.”

Specifically, Tilray believes the acquisition will lead to the commercialization of “new and innovative products through the development of non-alcoholic distilled spirits, including bourbon whisky, that is infused with cannabis,” according to the release.

More than 85% of Breckenridge’s revenue comes from Colorado, Tilray said. The company said it plans “to leverage SweetWater’s existing nationwide infrastructure to create new, greatly-expanded consumer awareness and product adoption.” Beverage alcohol revenue comprised $15.5 million of Tilray’s revenue in the company’s most recent quarter or about 9% of total revenue.

Tilray shares trade as TLRY on the Nasdaq and the Toronto Stock Exchange. The company operates through five segments: Cannabis Business, Distribution Business, Beverage Alcohol Business, Wellness Business, and Business Under Development. It provides medical and adult-use cannabis products, pharmaceutical and wellness products, beverage alcohol products, and hemp-based food and other wellness products. It has operations in Canada, the United States, Europe, Australia, New Zealand, Latin America, and internationally. The company was formerly known as Aphria Inc., Tilray, Inc. was incorporated in 2018 and is based in New York, New York.

#2: Fire & Flower

Major Canadian marijuana retail chain Fire & Flower Holdings Corp. (FAF.TO) announced a deal to acquire cannabis delivery service Pineapple Express Delivery on Thursday, December 9.

Toronto-based Fire & Flower will pay for the acquisition by assuming and repaying roughly 5.3 million Canadian dollars (about $4.2 million) of Pineapple Express’ debt and issuing approximately 1,126,761 common shares, subject to the latter reaching unspecified performance milestones in the fiscal year 2022.

Based on Fire & Flower’s opening share price on Thursday morning, those shares would be worth roughly CA$7.2 million. Pineapple Express, based in Burlington, Ontario, performs more than 40,000 cannabis deliveries per month in Canada, according to Fire & Flower’s news release. The acquisition is expected to close in the first quarter of 2022.

In a statement, Fire & Flower CEO Trevor Fencott said the Pineapple Express delivery platform would complement the retailer’s existing technology, including cannabis websites PotGuide and Wikileaf, as well as its Hifyre retail data platform and its Spark Perks loyalty program.

“We see this as an example of the advantages of building, testing, and hardening technology and systems in the federally legal Canadian market before deploying them to the U.S. and other emerging markets,” Fencott said.

Fire & Flower operates as an independent retailer that offers cannabis products and accessories through its retail locations located in the provinces of Alberta, Saskatchewan, Manitoba, Ontario, and Yukon. It also engages in wholesale of regulated cannabis products and accessories in Saskatchewan and operates Hifyre digital retail and analytics of the regulated cannabis e-commerce platform. Fire & Flower has licensed its brand and technology in the U.S. and is working toward a listing on the NASDAQ exchange. Currently, shares of the retailer trade on the Toronto Stock Exchange as FAF.

#3: Valens

Shares of The Valens Company Inc. (NASDAQ: VLNS) commenced trading on the NASDAQ Capital Market on Thursday, December 9, the Kelowna, British Columbia-based business announced in a news release.

“We believe this listing will enable Valens and its greater access to liquidity, increased corporate visibility, and a broader shareholder base, in an effort to create long-term shareholder value,” CEO Tyler Robson said in a statement.

The manufacturer of cannabis products joins Canadian licensed producers on the exchange, including: Cronos Group, based in Toronto; Hexo Corp., which has its head office in Gatineau, Quebec; Canopy Growth of Smiths Falls, Ontario; Aurora Cannabis, based in Edmonton, Alberta, and Organigram Holdings, headquartered in Moncton, New Brunswick.

Shares of companies traded on higher-volume stock exchanges such as the Toronto Stock Exchange (TSX) and NASDAQ generally see increased access to more institutional investors and liquidity. While shares of a number of other Canadian cannabis companies are also traded on the NASDAQ, U.S. “plant-touching” operators have access only to lower-volume exchanges such as the Canadian Securities Exchange and the over-the-counter markets. This is because the NASDAQ and TSX don’t allow plant-touching companies, as it breaks U.S. federal law.

Shares of Valens trade on the TSX and NASDAQ under the ticker symbol VLNS. Valens operates as a cannabis consumer products company. It engages in manufacturing cannabinoid-based products. The company provides proprietary cannabis processing services and is involved in product development, manufacturing, and commercialization of cannabis consumer packaged goods. Its products are formulated for the recreational, health and wellness, and medical consumer segments and offer various cannabis product categories.

#4: Chicago Atlantic

Cannabis-focused commercial real estate finance company Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI) raised $100 million through an initial public offering of 6.25 million shares of its common stock at $16 per share on Wednesday December 8.

The company’s common stock began trading on the NASDAQ Global Market on Wednesday, December 8, under the symbol “REFI.” Chicago Atlantic anticipated closing the offering on or about December 10, 2021. The company also granted the underwriters a 30-day option to purchase up to an additional 937,500 shares of common stock at the IPO price.

In addition, the company plans to use the total gross proceeds of roughly $100 million before deducting underwriting discounts and commissions and other offering expenses and excluding any exercise of the underwriters’ option to purchase additional shares to make investments in accordance with its investment objective and strategies and for general corporate purposes.

JMP Securities LLC, Compass Point Research & Trading, LLC, and Oppenheimer & Co. Inc. will serve as joint book-running managers for the transaction, while Lake Street Capital Markets LLC and East West Markets, LLC act as co-managers.

Chicago Atlantic, managed by Chicago Atlantic REIT Manager, LLC., is looking to provide attractive, risk-adjusted returns for stockholders primarily through consistent current income dividends and other distributions and secondarily through capital appreciation.

Chicago Atlantic operates as a real estate finance company in the United States. The company originates, structures, and invests in first mortgage loans and alternative structured financings secured by commercial real estate properties. It offers senior loans to state-licensed operators and property owners in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT), and it would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.

Top Psychedelic Stocks for Week

#1: Numinus

Numinus Wellness Inc. (TSXV: NUMI, OTC: NUMIF) closed out its fiscal fourth quarter with a strong $59.2 million cash balance and improved revenue following its acquisition of Canadian healthcare start-up Mindspace Wellbeing in February.

For the period ended August 31, 2021, the Vancouver, British Columbia-based mental health care company advancing psychedelic-assisted therapies saw revenue of $0.5 million, up 81.1% from the same quarter of 2020. Gross profit improved to $31,818, compared to a gross loss of $158,222 in 4Q 2020.

“During the fourth quarter, we were focused on building the team, infrastructure, technologies, and protocols that will allow us to scale our business over the next several years,” founder and CEO Payton Nyquvest said in a statement.

“We welcomed several new key executives, began our laboratory expansion, and filed a patent for a proprietary rapid production process for psilocybe.”

For fiscal 2021 as a whole, revenues grew 71.8% year-over-year to $1.5 million, due primarily to the acquisition of Mindspace. It reported a loss of $18.8 million for the year, including a $1.6 million non-cash goodwill impairment charge related to the acquisition of Mindspace, compared to a loss of $9.6 million in fiscal 2020.

#2: Awakn

Awakn Life Sciences Corp (NEO: AWKN, OTCMKTS: AWKNF) is a biotechnology company developing new psychedelic therapeutics to treat addiction better. Awakn also operates clinics delivering treatments in the U.K. and Europe, which provides free cash flow to reinvest back into the biotech side of the business.

Awakn is currently utilizing ketamine, MDMA, and novel chemical entities to allow people suffering from addiction to finally escape from their repetitive, addictive behaviors and thoughts. Specifically, Awakn has acquired the exclusive rights to the world’s only phase IIb clinical trial for Ketamine-Assisted Psychotherapy and the world’s only phase IIa clinical trial for MDMA-Assisted Psychotherapy to treat Alcohol Use Disorder.

Awakn clinics will deliver ketamine-assisted psychotherapy in the near term and will utilize MDMA when Awakn secures marketing authorization. Some Awakn clinics will also be sites for Awakn research’s clinical trials.

On average, each clinic will generate GBP£4 million in revenue per year. Awakn is targeting to have 20 clinics operational by the end of 2023. That would provide the company with a GBP£80 million run rate. This free cash flow will allow for reinvestment back into the biotech side of the business in a non-dilutive manner to shareholders.

#3: Mydecine

Mydecine Innovations Group Inc. (OTC: MYCOF, NEO: MYCO) announced an agreement with an investor to complete a non-brokered private placement of a convertible secured subordinated debenture in the principal amount of C$5.5 million.

The company said the financing, which was expected to close on December 10, 2021, will allow it to continue to make progress on its research and development (R&D), clinical trials, and technology initiatives.

“This financing will give Mydecine the runway needed to continue meeting important milestones like launching our smoking cessation study in partnership with Johns Hopkins University and PTSD (Post Traumatic Stress Disorder) studies with various global military-focused organizations, furthering our drug development initiatives and growing paid subscribers on our telehealth platform Mindleap,” Mydecine Innovations Group CEO Josh Bartch said in a statement.

As part of the financing, the investor was also issued warrants to acquire up to 32,352,941 company common shares, at a price of $0.17 per share, at any time up to 36 months following the closing of the financing.

As well, Mydecine said it has been in communication with the U.S. Food and Drug Administration (FDA) and plans to hold a Pre-IND meeting in February for its seamless Phase 2/3 smoking cessation clinical trial assessing MYCO-001, 99% pure psilocybin, to treat nicotine dependence.