Key Takeaways; Cannabis Sector

• Village Farms regained Nasdaq compliance; Weedmaps is facing a compliance issue.
• MariMed expanded Maryland presence with a $5.3 million acquisition.
• Tilray adjusted expectations for 2024 amid financial challenges, as they eye Canadian tax relief.

Key Takeaways; Psychedelic Sector

• Optimi Health partnered with a New Zealand institute to supply psilocybin for indigenous healing research. 
• Awakn expanded into U.S. Southern States with groundbreaking addiction treatment partnership.

This week, a glimmer of hope emerged in the cannabis sector as the head of the Food and Drug Administration (FDA) addressed a House committee, stating that there’s “no reason” for the U.S. Drug Enforcement Administration (DEA) to delay its awaited decision on reclassifying marijuana from Schedule 1 to Schedule 3 of the Controlled Substances Act. It has been over seven and a half months since the Department of Health and Human Services forwarded their rescheduling recommendation to the DEA. However, a delay in action has left many stakeholders in the cannabis sector on edge, eagerly awaiting clarity on the regulatory front. The prospect of rescheduling holds significant implications, promising to alleviate tax burdens and pave the way for eventual federal legalization, which is long overdue in the eyes of many.

Below is a weekly roundup of what happened this week in the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Village Farms

Vancouver-based Village Farms International, Inc. (NASDAQ: VFF) successfully regained compliance with Nasdaq listing rules, marking a positive turn for the marijuana producer and supplier company. The Nasdaq requires listed companies to maintain a minimum bid price of $1 per share, a threshold that Village Farms surpassed in March. The company had previously received a warning from Nasdaq in April 2023 due to low share prices but was granted an extension until October to rectify the situation.

 Meanwhile, WM Technology, Inc. (NASDAQ: MAPS), the parent company of Weedmaps, is the latest to face the non-compliance challenge. On Tuesday, WM Technology disclosed that it had received a notice of non-compliance from Nasdaq. This announcement came following the company’s failure to submit its annual 10-K report on time.

WM Technology attributed the delay in filing to recent changes in its executive finance leadership and the necessity to conclude additional financial-closing procedures associated with internal control weaknesses. Nevertheless, the company reassured stakeholders that it would submit the Form 10-K promptly. With the non-compliance notice, WM Technology now has 60 days to present a compliance plan to Nasdaq. The stock exchange may grant an extension until the end of September for the company to rectify its status.

These developments highlight the regulatory challenges faced by companies operating in the cannabis-related industry; particularly the Nasdaq’s minimum bid-price requirement, which has prompted various adjustments among listed marijuana and ancillary companies, including share consolidations. Aurora Cannabis Inc. (NASDAQ: ACB), a Canadian producer, notably consolidated its shares on a 10-to-one basis in February in response to Nasdaq regulations. Conversely, SpringBig Holdings, Inc. (OTC: SBIG), a cannabis marketing and loyalty company, opted to delist from Nasdaq in September 2023 after failing to meet the compliance the requirements.

#2: MariMed

MariMed Inc. (OTC: MRMD), a Massachusetts-based marijuana multistate operator (MSO), solidified its foothold in the Maryland cannabis market with a second significant acquisition.

The acquisition involved the closure of a $5.3 million deal for Community Wellness and Compassionate Care Center, which was finalized on April 5. This transaction added to MariMed’s existing presence in Maryland, giving them a second retail store in the state.

Following the closure of the deal, MariMed is poised to reopen the Upper Marlboro outlet, which closed in July 2023, pending regulatory approvals. The company also paid the state’s adult-use conversion fee, indicating its intention to sell recreational cannabis at the newly acquired store. With existing operations in Annapolis and a cultivation and processing facility in Hagerstown, MariMed is strategically positioned to capitalize on Maryland’s growing cannabis market.

Despite these expansions, MariMed has faced challenges, including supply chain disruptions and regulatory setbacks, impacting its financial performance. The company reported a net loss of $16 million in 2023, attributing some of these losses to delays in expansion projects across multiple states. CEO Jon Levine cited difficulties in securing basic construction materials, such as electrical panels, which have led to significant delays in the completion of expansion projects, including the Hagerstown cultivation facility.

However, MariMed remains optimistic about its future prospects in Maryland’s cannabis market. The company plans to continue pursuing additional dispensary acquisitions, with the aim of reaching the state-allowed maximum of four stores. And by strategically expanding its footprint in Maryland, the company will be able to capitalize on the state’s growing demand for adult-use cannabis products and position itself as a key player in the region’s cannabis industry.

#3: Tilray

Canadian cannabis and beverage company Tilray Brands, Inc. (NASDAQ: TLRY) revised its financial outlook for fiscal year 2024 during its third-quarter earnings call. The company’s Chief Financial Officer, Carl Merton, lowered the 2024 guidance, citing challenges in meeting previously announced projections, notably in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) and adjusted free cash flow. 

Tilray CFO disclosed during the earnings call that the earlier forecast of $68 million-$78 million in adjusted EBITDA for 2024 was no longer attainable. Consequently, the company revised its adjusted EBITDA range to $60 million-$63 million. Additionally, Tilray no longer anticipates achieving positive adjusted free cash flow for the entirety of the fiscal year.

As for the third-quarter results, the company posted a net loss of $105 million for the quarter ended Feb. 29, with net revenue totaling $188.3 million. While revenue increased by approximately 30% compared to the previous year, it declined from the second quarter of 2024. The revenue mix comprised $54.7 million from beverage alcohol, $63.4 million from cannabis, $56.8 million from distribution, and $13.4 million from wellness.

Considering Canada’s intricate cannabis excise tax structure, Tilray executives voiced anticipation ahead of the federal budget release, particularly regarding a parliamentary finance committee proposal to cap excise taxes on marijuana products at 10% of their value. Tilray CEO, Irwin Simon, estimated potential annual savings of $80 million if the proposal were implemented, highlighting the impact of such a change on the company’s finances.

Looking ahead, Tilray eyes the prospect of selling pharmaceutical-grade medical cannabis in the U.S. following potential rescheduling from Schedule 1 to Schedule 3, potentially diverging from current strategies pursued by American multistate operators. 

Additionally, Tilray operates a medical marijuana distribution business in Germany, where recent legislative shifts may open new avenues for growth. With the removal of medical cannabis from the Narcotics Act, the company anticipates an expansion in the German medical cannabis market, facilitating easier prescription access for patients and potentially broader health insurance coverage.

Top Psychedelic Companies for Week

#1: Optimi Health

Canadian psychedelics company Optimi Health Corp. (OTC: OPTHF) solidified its international presence by striking a deal to supply psilocybin to a research institute in New Zealand. The agreement, which was made with the Mātai Medical Research Institute on behalf of the Tū Wairua Project, marked Optimi’s first venture into the New Zealand market.

Under this partnership, Optimi will provide its British Columbia-made psilocybin extracts for a clinical study focused on addressing methamphetamine use disorder among native Maori tribal members. The initiative aims to revive ancient healing practices using natural medicines within the indigenous Māori community.

Optimi’s CEO, Bill Ciprick, expressed the significance of this collaboration in honoring the cultural heritage of the Māori people; “This agreement marks our entry into a new market and underscores the historical and cultural importance of the work being undertaken by our colleagues in New Zealand to honour and respect the indigenous heritage of the Māori people,” Bill Ciprick said in the press release.

The study aligns with the indigenous tribe’s mission to reconnect with traditional healing methods utilizing natural flora and fauna. Jody Toroa, trustee of Rangiwaho Marae, emphasized the importance of utilizing Optimi’s natural fungi, which closely resembles local indigenous species, over synthetic alternatives. According to her, this approach ensures the integrity of the project and facilitates the reclaiming of cultural knowledge and customary practices. “Alongside many First Nations peoples, we have a relationship with native flora and fauna as a source of healing and reconnection to our respective indigenous cultural practices,” Toroa said. 

#2: Awakn

Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF) expanded its presence in U.S. southern states through a licensing partnership with Rivus Wellness and Research Institute in Oklahoma City. This marked Awakn’s debut in the U.S. southern states, bringing its innovative treatment for Alcohol Use Disorder (AUD), Awakn Kare, to a new region. 

Awakn Kare has shown remarkable efficacy in trials, with an 86% abstinence rate six months post-treatment, far surpassing the current standard of care. The partnership grants Rivus access to Awakn’s therapies and training for practitioners, while Awakn receives fees and revenue shares.

CEOs of both companies expressed excitement about the collaboration, emphasizing a shared commitment to providing superior addiction treatments. Anthony Tennyson, CEO of Awakn, said “We are excited to partner with Rivus and their excellent team, there is shared ethos and vision between the two organizations which is important. Being able to provide a whole new cohort of people in Oklahoma with a new more effective treatment option whilst they are in desperate need, is what drives us.” While Dr. Lane Peyton of Rivus also echoed this sentiment saying, “The Rivus Wellness and Research Institute has consistently served the Oklahoma City mental health community with innovative treatments, interventions, and preventions, and we feel that this partnership with Awakn Kare will benefit our patients tremendously.”

This partnership reflects a significant advancement in addressing the need for more effective AUD treatments in the United States, offering hope for improved outcomes and transformed lives. 

Key Takeaways; Cannabis Sector

• Canopy Growth received ISS recommendation for creation of exchangeable shares.
• Trulieve to hold first quarter 2024 results conference call at the beginning of May.
• Goodness Growth announced sale of Vireo Health of New York in effort to address financial constraints.
• Avant Brands entered German market through IM Cannabis deal.

Key Takeaways; Psychedelic Sector

• Awakn partnered with Oklahoma clinic for addiction treatment.

Below is a weekly roundup of what happened this week in the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) recently received a favorable recommendation from Institutional Shareholder Services (“ISS”) regarding its proposal for the creation of exchangeable shares. This recommendation came ahead of the special meeting of shareholders scheduled for April 12, 2024.

The proposed amendment to Canopy Growth’s articles of incorporation aims to establish a new class of non-voting and non-participating exchangeable shares, alongside restating the rights of common shares. According to the company, the objective behind this move is to facilitate the Company’s entry into the U.S. cannabis market, particularly through its U.S.-domiciled holding company, Canopy USA, LLC.

Canopy USA holds various U.S. cannabis investments, and with the approval of the proposed amendment, it will have the ability to acquire additional assets, including Acreage Holdings, Inc. (OTC: ACRHF), Mountain High Products LLC, Wana Wellness LLC, The Cima Group LLC, and Lemurian Inc. According to Canopy, these potential strategic acquisitions are designed to unlock value for Canopy Growth and its shareholders, positioning the company for growth and profitability in anticipation of federal legalization of cannabis in the United States.

ISS, a renowned independent proxy advisory firm with a significant client base, recommended that Canopy Growth shareholders vote in favor of the proposed amendment. In its report, ISS highlighted the importance of this proposal in ensuring compliance with applicable U.S. federal law.

Canopy Shareholders are encouraged to participate in the upcoming special meeting and cast their votes. The meeting, scheduled for April 12, 2024, will be conducted virtually, and shareholders can access the proceedings through a live audio webcast. The deadline for submitting proxies or voting instruction forms is April 10, 2024.

#2: Trulieve

Trulieve Cannabis Corp. (OTC: TCNNF), one of the leading marijuana multistate operators in the U.S., announced that it will conduct its conference call on Thursday, May 9, 2024, at 8:30 AM Eastern Time, after the release of its first-quarter 2024 financial results. Chairman, Founder, and Chief Executive Officer Kim Rivers and Chief Financial Officer Wes Getman are expected to participate in the call, where they will offer insights into Trulieve’s financial and operating performance.

The call will attract significant interest from stakeholders, with analysts eagerly awaiting Trulieve’s financial updates. Analysts have predicted revenue estimates of $286.36 million and average earnings estimate of -0.11. The company’s performance against these estimates will be closely scrutinized during the call.

Additionally, Trulieve had previously announced its participation in several events during April 2024, showcasing its commitment to industry engagement and advocacy. According to the company, Founder and CEO Kim Rivers will participate in a panel discussion at the Benzinga Cannabis Capital Conference in Miami, Florida, on April 17th. The panel, which will include the Bellamy Brothers, campaign spokesmen for the Smart & Safe Florida initiative, will address crucial topics pertinent to the cannabis industry.

#3: Goodness Growth

In a strategic move aimed at addressing financial challenges, cannabis multistate operator Goodness Growth Holdings, Inc. (OTC: GDNSF) unveiled plans to sell its subsidiary, Vireo Health of New York (VireoNY), to Ace Venture Enterprises for a sum ranging between $3 million to $5 million. The sale comes as Goodness Growth endeavors to amend a credit agreement with its secured lender, Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI), a cannabis real estate investment trust (REIT) based in Illinois.

Under the terms of the deal, Ace Venture Enterprises, a minority-owned business in New York founded by TV and film producer Steven Acevedo, will acquire VireoNY’s licenses, inventory, and assets. Additionally, Ace Venture Enterprises will take over VireoNY’s lease agreement with Innovative Industrial Properties, Inc. (NYSE: IIPR) for a marijuana cultivation and manufacturing facility located in Johnstown, New York. 

To facilitate the transition, Goodness Growth will provide a $2.5 million unsecured loan to VireoNY, while Ace Venture Enterprises pledged a $20 million investment for the development of licenses and to support the transfer of the IIP lease. Furthermore, Ace intends to acquire the Johnstown cannabis cultivation and manufacturing campus from IIP through a two-year purchase option.

Despite the impending sale, Goodness Growth will maintain a collaborative advisory agreement with Ace, retaining management and compliance oversight in exchange for approximately 15% of net profits. The deal is contingent upon regulatory approval and secured capital commitments and is anticipated to close by June 30

#4: Avant Brands

Canadian producer Avant Brands Inc. (OTC: AVTBF) inked a deal with IM Cannabis Corp. (NASDAQ: IMCC), a medical cannabis company based in Israel and Germany. This is a strategic move aimed to tap into the expanding German medical cannabis market. The agreement grants IMC’s German subsidiary, Adjupharm GmbH, exclusive rights to launch Avant’s flagship BLK MKT brand in Germany.

Under this international trademark licensing agreement, Avant will license its BLK MKT brand to Adjupharm. The products will exclusively feature cannabis cultivated by Avant in Canada and then exported to Germany. 

The timing of this collaboration coincides with Germany’s recent relaxation of medical cannabis restrictions, whereby the country approved partial legalization of cannabis from April, signaling a significant opportunity for market growth as discussions about recreational cannabis continue.

Norton Singhavon, Founder and CEO of Avant Brands, expressed enthusiasm about the partnership, highlighting its importance in expanding Avant’s global presence and positioning the BLK MKT brand on an international platform. “Partnering with IMC is a strategic move; it not only bolsters our position as a global leader in the ultra-premium cannabis sector but also amplifies the reach of our flagship brand, BLK MKT, on the global stage,” Norton said in a statement.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF) a pioneering biotechnology company focused on developing medication-assisted treatments for addiction, announced a significant expansion in North America through a Licensing Partnership agreement with Rivus Wellness and Research Institute, based in Oklahoma City. 

This marked Awakn’s first foray into the U.S. southern states, enhancing access to its groundbreaking treatment protocol, Awakn Kare, for individuals struggling with Alcohol Use Disorder (AUD). 

Awakn Kare represents a proprietary treatment regimen validated in a phase II a/b trial, demonstrating remarkable efficacy with an 86% abstinence rate over six months post-treatment, a stark improvement compared to the mere 2% seen pre-trial. This efficacy surpasses the current standard of care for AUD, which typically yields only a 25% abstinence rate over a similar timeframe.

The partnership agreement, effective since May 18, 2023, and launched in April 2024, grants Rivus Wellness and Research Institute access to Awakn’s advanced therapeutics and comprehensive training for its practitioners. In return, Rivus will pay Awakn an annual fee alongside a revenue share per treatment administered.

Anthony Tennyson, CEO of Awakn, expressed enthusiasm about the partnership, emphasizing the shared ethos and vision between the two organizations. He also highlighted the significance of providing a novel and superior treatment option to individuals in Oklahoma facing addiction challenges. “We are excited to partner with Rivus and their excellent team, there is shared ethos and vision between the two organizations which is important. Being able to provide a whole new cohort of people in Oklahoma with a new more effective treatment option whilst they are in desperate need, is what drives us,” Anthony Tennyson said in a statement.

Moreover, Dr. Lane Peyton of Rivus Wellness and Research Institute echoed this sentiment, emphasizing their commitment to delivering innovative treatments and interventions to the Oklahoma City mental health community. “The Rivus Wellness and Research Institute has consistently served the Oklahoma City mental health community with innovative treatments, interventions, and preventions, and we feel that this partnership with Awakn Kare will benefit our patients tremendously,” Dr. Lane Peyton commented.

The collaboration between Awakn Life Sciences and Rivus Wellness and Research Institute signifies a significant step forward in addressing the pressing need for more effective addiction treatments in the United States. With Awakn Kare’s proven efficacy and Rivus’s dedication to patient care, this partnership holds promise for improving outcomes and transforming lives affected by AUD.

Key Takeaways; Cannabis Sector

• High Tide reported break-even net income amid record cannabis sales in the first quarter of 2024.
• TerrAscend is claiming a $26 million tax refund, as they unveiled a strategy to navigate 280E challenge.
• Cresco is struggling with losses; Nonetheless, they’re eyeing new cannabis markets.
• Cannabis REIT Chicago Atlantic reported 17% interest income increase for 2023.
• Ayr Wellness CEO is optimistic about future adult-use marijuana markets.

Key Takeaways; Psychedelic Sector

• Awakn unveiled a breakthrough in alcohol use disorder treatment.

This week was ablaze with financial reports from several cannabis players, revealing a notable trend: many cannabis multistate operators (MSOs) are seeking 280E tax refunds to bolster their financial health. While this move seems to improve their balance sheets and cash flows, it also raises concerns about future tax burdens, because should 280E persist, these gains could turn into future tax burdens. Nonetheless, the elimination of 280E would be a game-changer, but its fate hangs in the balance, mainly due to uncertainty regarding the DEA’s potential rescheduling of cannabis from Schedule 1 to Schedule 3.

Below is a weekly roundup of what happened this week in the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: High Tide

High Tide Inc. (NASDAQ: HITI), a prominent Canadian cannabis retailer based in Calgary, Alberta, reported a significant financial milestone in its first-quarter fiscal results for 2024. Despite industry-wide challenges, the company announced break-even net income and positive free cash flow.

During the November-January quarter, High Tide witnessed a notable increase in revenue, reaching 128.1 million Canadian dollars ($94.6 million), marking an 8% rise compared to the previous year.

The company also reported generating CA$3.6 million in positive free cash flow for the quarter, indicating a healthy financial position. It stated that it aims to sustain this positive cash flow throughout fiscal 2024, with CA$28.7 million in cash reserves as of January 31.

Noteworthy achievements during the quarter included a record CA$7.3 million in sales from its Cabanalytics Business Data and Insights platform, along with a substantial increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to CA$10.4 million, marking a 90% growth year-over-year.

The company’s loyalty programs also saw significant traction, with 32,000 people enrolled in its paid loyalty program and over 1.32 million memberships in the Cabana Club loyalty program as of March 2024, showcasing High Tide’s commitment to customer engagement and retention.

High Tide CEO, Raj Grover, emphasized the importance of reaching break-even net income, highlighting it as a critical milestone within the company’s trajectory, particularly in the context of the global cannabis market; “I am very proud to announce that High Tide has reached break-even net income this quarter, which is a critical milestone in our ongoing corporate trajectory and is a rarity in the global cannabis space,” Grover said in a news release.

#2: TerrAscend

TerrAscend Corp. (OTC: TSNDF), a major player in the multi-state marijuana industry, made headlines with its recent announcement during the release of its fourth-quarter and full-year 2023 financial results. The company revealed plans to halt tax payments under Section 280E of the Internal Revenue Code, alongside hints regarding their legal rationale.

TerrAscend, headquartered in Canada, intends to file amended tax returns for 2020, 2021, and 2022, with the expected refunds covering federal and state taxes from 2020 and 2021.

According to Executive Chair, Jason Wild, the company’s revised tax stance could lead to amended returns and an estimated refund of around $26 million. This decision follows the reclassification of $59.2 million in tax liabilities on TerrAscend’s balance sheet as of the close of 2023, as stated by Chief Financial Officer Keith Stauffer during the company’s fourth-quarter earnings call.

Stauffer indicated that TerrAscend will adopt a conventional taxpayer approach moving forward, bypassing the implications of 280E. When pressed for specifics on the legal strategy regarding nonpayment of taxes under 280E, Stauffer alluded to a legal interpretation similar to that outlined in the ongoing Boies Schiller lawsuit, where cannabis companies are contesting federal marijuana prohibition under the Controlled Substances Act.

This announcement from TerrAscend coincides with a period in the cannabis industry marked by companies exploring strategies to mitigate 280E tax burdens. Trulieve Cannabis Corp. (OTC: TCNNF) has already received substantial tax refunds, while Ascend Wellness Holdings, Inc. (OTC: AAWH) also filed amended federal tax returns and anticipates refunds and Jushi Holdings Inc. (OTC: JUSHF) has also outlined their own strategies regarding 280E.

In terms of financial performance, TerrAscend reported a significant increase in net revenue for the quarter ending December 31, reaching $86.6 million, up by 25.4% compared to the same period in 2022. However, the company posted a quarterly net loss from continuing operations amounting to $41.8 million.

Furthermore, for the full-year 2023, TerrAscend reported net revenue of $317.3 million, marking a 28% year-over-year increase, alongside a net loss from continuing operations totaling $82.3 million.

#3: Cresco

In 2023, Cresco Labs Inc. (OTC: CRLBF), a prominent Chicago-based cannabis multistate operator, faced significant financial setbacks, recording a staggering $180 million net loss for the year, according to their fourth quarter and full-year financial report.

This loss was primarily attributed to the company’s exit from two state markets and the collapse of a high-profile $2 billion merger with Columbia Care, now known as The Cannabist Company Holdings Inc. (OTC: CBSTF).

However, amidst the adversity, Cresco managed to end the year on a positive note, reporting a fourth-quarter profit of $4.8 million on revenue of $188.2 million. This marked a significant turnaround from previous quarters and showcased the company’s ability to adapt and recover. Furthermore, as of the beginning of 2024, Cresco reported holding $109 million in cash and equivalents, indicating a solid financial position to pursue its growth strategies amidst a rapidly evolving industry landscape.

Looking ahead, Cresco is prioritizing markets like Florida and Ohio, aiming to position itself strategically for potential regulatory changes. Unlike some competitors, the company is not banking solely on federal cannabis reform or expecting tax refunds under Section 280E of the Internal Revenue Code. Instead, it plans to make substantial investments in key markets and evaluate opportunities as they arise.

#4: Chicago Atlantic

Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI), a cannabis real estate investment trust (REIT) based in Illinois, announced a significant increase in net interest income for the year 2023. According to a recent financial news release, the company’s net interest income surged to $57.1 million, marking a notable 17% rise compared to the previous year ending on December 31.

During the fourth-quarter earnings call, senior management at Chicago Atlantic highlighted the growing prospect of federal marijuana reform, which they believe is driving investment and enhancing equity for their clients. They expressed optimism regarding potential changes in legislation, including the rescheduling of marijuana and the elimination of Section 280E of the Internal Revenue Code, which could significantly improve cash flow for borrowers associated with the company.

Despite a slight decline of 5.8% in net income in the fourth quarter compared to the previous quarter, attributed to increased management and incentive fees, Chicago Atlantic remains bullish about the future outlook. Co-CEO Tony Cappell emphasized the rising demand for credit within the cannabis industry, particularly as states like Ohio gear up for recreational cannabis launches and potential adult-use legalization looms in Florida; “The demand for credit in this capital-constrained industry should only accelerate as a result,” Cappell said.

As of Dec. 31, Chicago Atlantic had committed to lending approximately $378.8 million across 27 portfolio investments, signaling its substantial involvement in financing cannabis real estate ventures.

In addition to its financial performance, Chicago Atlantic also announced two promotions within its senior management team. Former co-President Peter Sack was appointed co-CEO alongside Tony Cappell, while Phil Silverman, who previously served as interim Chief Financial Officer, was appointed permanently to the position.

#5: Ayr Wellness

In a recent earnings call with investors and analysts, David Goubert, the CEO of Ayr Wellness Inc. (OTC: AYRWF), a Miami-based multistate operator (MSO), expressed confidence in the company’s ability to leverage upcoming adult-use marijuana markets. During the earnings call, Goubert highlighted Ayr’s strategic positioning, noting that only 15 of its 91 retail stores are currently operating in adult-use markets. He believes this positions Ayr favorably to tap into the potential of emerging recreational opportunities, particularly in states like Ohio, Florida, and Pennsylvania.

Additionally, during the earnings call, Ayr reported a 10% increase in full-year revenue, totaling $463.6 million for 2023 compared to $421.4 million in 2022. Goubert attributed this growth to the expansion of retail operations in Florida and wholesale activities in New Jersey. The company’s wholesale business, initiated in New Jersey in the third quarter of 2022, is set to expand into Massachusetts, New Jersey, and Ohio in the current year.

Despite the revenue growth, Ayr reported a total net loss of $279.5 million for 2023, with a quarterly net loss of $30.3 million ending December 31. However, in February, Ayr successfully completed a debt extension, retiring or deferring approximately $400 million of debt, which is expected to bolster the company’s financial position moving forward.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) a biotechnology company specializing in medication-assisted treatments for addiction, particularly Alcohol Use Disorder (AUD), successfully concluded an investigative study on a proprietary S-ketamine oral thin film (OTF) formulation. Administered sublingually, this formulation demonstrated significant dissociative effects, akin to intravenous racemic ketamine, and effectively reduced alcohol cravings in harmful drinkers.

This achievement follows Awakn’s recent global licensing agreement with LTS Lohmann Therapie-Systeme AG for the S-ketamine OTF, securing access to Phase 1 clinical trial data and patents. Leveraging this agreement, Awakn has designated the program AWKN-002 for AUD treatment in the US market, intending to advance to late-stage clinical trials following a planned pre-IND meeting with the FDA in the first half of 2024.

AWKN-002, coupled with manualized relapse prevention cognitive-behavioral therapy (CBT), is poised to broaden access to ketamine treatment due to its rapid onset and offset of action compared to intravenous ketamine. This expansion aligns with Awakn’s commitment to reaching more patients in need of life-saving addiction treatments.

Key Takeaways; Cannabis Sector

• Curaleaf reported strong growth in 2023, amidst global expansion plans.
• MariMed reported revenue growth and net loss in 2023; alongside 2024 growth forecast.
• Cronos Group reported improved financial performance in 2023.
• Planet 13 announced a public offering to raise $11.3 million.
• AFC Gamma’s Q4 report revealed challenges and optimism in cannabis lending.

Key Takeaways; Psychedelic Sector

• Awakn announced listing on the Canadian Securities Exchange.
• FDA granted breakthrough therapy designation to MindMed’s LSD candidate for generalised anxiety disorder.

In a rollercoaster week for MSOs, the cannabis industry faced both triumphs and challenges. Despite many positive Q4 reports in late February, this week witnessed an unusual trend as only a few large MSO reported their financials. Surprisingly, the market responded with increased selling even after companies displayed strong financial performances, highlighting the ongoing turbulence in the sector.

However, amid all the ups and downs, there’s a beacon of hope shining through. The cannabis landscape is brimming with potential, especially with the exciting possibility of federal legalization on the horizon. As the industry eagerly anticipates this transformative step, the future looks bright, even though it’s still uncertain.

In this weekly roundup, we delve into the latest developments and initiatives across the cannabis and psychedelic sectors. From groundbreaking medical research to emerging therapeutic applications and shifts in legal frameworks.

Top Marijuana Companies for Week

#1: Curaleaf

Curaleaf Holdings, Inc. (OTC: CURLF), a major player in the cannabis industry, recently reported significant revenue growth for the fourth quarter of 2023, reaching $345.3 million, representing a 1.5% increase over the previous year and a 3.6% increase over the third quarter.

Despite a net loss of $57.7 million from continuing operations during this period, Curaleaf’s full-year revenue for 2023 soared to $1.35 billion, marking a 6% year-over-year increase. This growth signals Curaleaf’s enduring presence as the largest publicly traded marijuana operator by market capitalization.

Despite reporting a net loss for the year, the company remains financially robust, with $91.8 million in cash and total debt of $587.8 million at the end of 2023. The company said that it is exploring strategies to optimize its financial performance, including potential legal challenges related to tax regulations under Section 280E of the Internal Revenue Code.

Looking ahead, Curaleaf stated that it is focused on expanding its footprint in both domestic and international markets. The company aims to capitalize on new opportunities in states such as New York, Ohio, Florida, and Pennsylvania, as well as key European countries like Germany, the U.K., and Poland. It also plans to leverage the recent legalization of cannabis in Germany to further its European presence.

Curaleaf’s financial performance in 2023 reflects both the opportunities and challenges facing the cannabis industry. Despite posting losses, the company’s revenue growth and strategic initiatives highlight its resilience and long-term vision for success.

As Curaleaf continues to explore new markets and expand its product offerings, it remains at the forefront of the evolving cannabis landscape, poised to capitalize on emerging opportunities and drive sustainable growth in the years to come.

#2: MariMed

MariMed Inc. (OTC: MRMD), a Massachusetts-based marijuana multistate operator, reported its financial performance for the full-year and fourth quarter of 2023. The company experienced substantial revenue growth but also reported a net loss during the period.

In 2023, MariMed’s revenue surged to $148.6 million, marking nearly an 11% increase from the previous year’s $134 million. The boost in revenue was primarily attributed to wholesale expansion and new asset openings. Despite the revenue growth, the company reported a net loss of $16 million for 2023, a significant contrast compared to the $13.6 million profit in 2022.

For the fourth quarter ending Dec. 31, 2023, MariMed reported a net loss of $10.1 million and revenue of $38.9 million. This represents an increase in losses compared to the same period in the previous year.

Increased competition in Illinois and construction delays at its processing facility in Norwood, Massachusetts, were cited as contributing factors to MariMed’s financial performance challenges. Additionally, regulatory issues in the company’s home state further complicated matters.

The company’s CEO, Jon Levine, expressed frustration over unexpected delays, such as prolonged wait times for an electrical panel; “Who would have thought that an electrical panel would take six months to get?” Levine said during the call. These circumstances influenced MariMed’s cautious approach to projecting growth for 2024.

MariMed outlined a conservative growth forecast for 2024, projecting revenue growth of 5%-7% and capital expenditures of $10 million. The company emphasized its focus on key operating milestones, including the commencement of wholesale operations in Illinois, to position itself for long-term growth.

Furthermore, to fuel future growth, MariMed secured financing without diluting shareholder equity. In November 2023, the company refinanced $58.7 million in debt, ensuring favorable terms for a 10-year period.

Looking ahead, MariMed anticipates operational expansions, including the transition to a permanent facility in Illinois and the acquisition of operating assets in Maryland.

#3: Cronos Group

Canadian cannabis producer Cronos Group Inc. (NASDAQ: CRON) made significant strides in reducing its losses in the fiscal year 2023, narrowing down to $74.5 million (101 million Canadian dollars).

The company’s consolidated net revenue saw a slight uptick, reaching $87.2 million from $86.7 million in the previous year. Cronos attributed this increase primarily to higher sales of cannabis flower and extracts in Canada, as well as the commencement of sales in Germany and Australia.

However, the company faced challenges in Israel, experiencing a decline in cannabis flower sales due to pricing pressure amidst a competitive market and currency fluctuations against the U.S. dollar.

In terms of product categories, cannabis flower sales slightly decreased to $62.1 million, while cannabis extracts witnessed a 9% increase to $24.6 million. Revenue from other sources saw a small decline. Geographically, sales in Canada surged by 15%, reaching $64.7 million, whereas sales in Israel dropped by 30.1% to $21.1 million. Sales from other countries doubled from the previous year.

Moreover, Cronos achieved cost savings of $30 million in 2023, surpassing its initial target, with further savings anticipated in general and administrative as well as research and development expenses. Additionally, As of December 31, 2023, Cronos held cash and cash equivalents amounting to $669.3 million positioning it in a strong financial position for expansion.

Looking ahead, the company stated that it remains vigilant regarding potential impacts from geopolitical conflicts, particularly the Israel-Hamas war, on its operations and personnel in Israel.

#4: Planet 13

In a strategic move aimed at bolstering its financial position, Planet 13 Holdings Inc. (OTC: PLNH), a prominent marijuana multistate operator, announced the pricing of a public offering to generate gross proceeds totaling at least $11.3 million.

The Las Vegas-based company announced plans to sell 18.75 million units at a rate of 60 cents per unit through an underwritten public offering. Each unit encompasses one common share with no par value alongside one warrant, which enables the acquisition of an additional share at 77 cents within a five-year timeframe, subject to certain adjustments.

Planet 13 further disclosed that the underwriters, spearheaded by Beacon Securities, retain a 30-day over-allotment option to procure “up to an additional 2,812,500 shares and/or warrants.” Should this option be exercised in its entirety, it would furnish the company with $12.9 million in gross proceeds.

In a statement, Planet 13 outlined its intentions regarding the utilization of the raised funds. The company aims to allocate the proceeds towards working capital and general corporate endeavors, including but not limited to acquiring additional retail cannabis licenses within Nevada, expanding its retail footprint in Florida and Illinois, and implementing various capital enhancements.

The offering closed on March 7, marking a significant development in the trajectory of Planet 13, which operated across multiple states including California, Florida, Illinois, and its home base of Nevada.

#5: AFC Gamma

AFC Gamma, Inc. (NASDAQ: AFCG), a publicly traded cannabis industry lender, reported its financial performance for the fourth quarter and full fiscal year 2023. The company reported nearly $16 million in net interest income for Q4, marking an 18.9% decline from the same period in 2022. The full-year net interest income for 2023 was $64.2 million, reflecting a 14% decrease from 2022.

Despite these figures, AFC Gamma faced challenges, posting a quarterly net loss of $9.2 million compared to a net income of $2.9 million in the same quarter of the previous year. The full-year net income for 2023 was nearly $21 million, down from $35.9 million in 2022. CFO, Brandon Hetzel, attributed the difference between distributable earnings and net loss to increased unrealized losses on loans held at fair value and a rise in current expected credit losses reserve.

CEO Daniel Neville discussed the company’s positive outlook, noting an expanding pipeline driven by what they term “cannabis 3.0 players.” “Many of these companies are building through a combination of organic growth and opportunistically acquiring distressed assets,” Neville stated. “We are excited to finance many of these operators that have clean capital stacks and are unburdened with debt, sale-leasebacks or legacy tax liabilities.”

As per the recent financial result, AFC Gamma is actively reducing exposure to underperforming assets, with two borrowers currently in receivership. The company’s year-end financials revealed cash and cash equivalents of $121.6 million, total assets of $466.6 million, and total liabilities of $146.5 million.

Additionally, AFC Gamma recently announced a strategic move to split into two entities, separating its non-cannabis commercial real estate assets to create Sunrise Realty Trust. This restructuring underscores AFC Gamma’s commitment to refining its focus and optimizing its lending activities within the evolving cannabis industry landscape.

Top Psychedelic Companies for Week

#1: MindMed

In a significant development for the field of psychedelic medicine, Mind Medicine (MindMed) Inc. (NASDAQ: MNMD) received breakthrough therapy designation from the FDA for its LSD candidate, MM120, aimed at treating generalised anxiety disorder (GAD). Alongside this milestone, MindMed unveiled pivotal 12-week data from its Phase 2b study and provided insights into its Phase 3 program plans.

MindMed’s Phase 2b study yielded promising results, showcasing the sustained efficacy of MM120 over a 12-week period. Administered as a single oral dose, MM120 demonstrated substantial improvements in the Hamilton Anxiety rating scale (HAM-A) compared to placebo. Notably, the 100-µg dosage exhibited a 65% clinical response rate and a 48% clinical remission rate, indicating its potential as a viable treatment option for individuals grappling with GAD.

The FDA’s recognition of MM120 marks a significant advancement in the therapeutic application of psychedelics. MindMed’s MM120 joins the ranks of breakthrough therapies, underscoring the growing acceptance of psychedelic compounds as potential treatments for mental health disorders.

With the breakthrough therapy designation secured, MindMed plans to proceed with an End-of-Phase 2 meeting with the FDA in the first half of 2024. Following this, the company aims to initiate its Phase 3 clinical program in the second half of the year, further advancing MM120 towards potential regulatory approval.

#2: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) a clinical-stage biotechnology firm dedicated to developing therapy-assisted treatments for addiction, particularly focusing on Alcohol Use Disorder (AUD), announced its approval to list the common shares of the company on the Canadian Securities Exchange (CSE) under the symbol “AWKN” effective February 13, 2024. This decision came as a significant strategic move, aligning with Awakn’s commitment to advancing its business operations and enhancing shareholder value.

Awakn ceased trading on Cboe Canada as of the close of trading on February 12, 2024. Shareholders did not need to take any action regarding this change of listing.

Awakn operates at the forefront of clinical-stage biotechnology, focusing on developing innovative medication-assisted treatments for addiction, with a primary emphasis on addressing AUD. AUD impacts approximately 51 million individuals in the US and key European markets, affecting a staggering 285 million people globally, for whom existing treatment modalities often fall short. Awakn’s mission is to deliver breakthrough therapeutics to individuals grappling with addiction, aiming to revolutionize the standard of care in this domain.

The company’s strategic roadmap is centered on commercializing its robust research and development pipeline across diverse channels, thereby ensuring broad accessibility to its groundbreaking treatments.

As Awakn embarked on this new chapter of growth and expansion with its listing on the CSE, it reaffirmed its dedication to advancing the frontiers of addiction therapy and creating sustainable value for its stakeholders.

Key Takeaways; Cannabis Sector

• AFC Gamma announced a spinoff, creating two specialized companies in cannabis and commercial real estate.
• Aurora Cannabis welcomed a new CFO, as they completed share consolidation.
• Ascend Wellness expanded operations with a second acquisition in Massachusetts.
• Agrify reported strong Q4 results with lower losses, but investors await revenue clarity.

Key Takeaways; Psychedelic Sector

• Awakn announced listing on the Canadian Securities Exchange.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: AFC Gamma

AFC Gamma, Inc. (NASDAQ: AFCG) recently revealed plans to undergo a strategic separation by spinning off its commercial real estate arm into a new independent entity named Sunrise Realty Trust, Inc. (SUNS). The move aims to establish two distinct publicly traded companies, each with a clear focus on their respective industry. The separation is expected to be completed by mid-2024, pending regulatory approvals.

The Florida-based marijuana-sector real estate lender is restructuring to enhance its appeal to investors and provide clearer investment propositions. The newly formed Sunrise Realty Trust intends to operate as a real estate investment trust (REIT) and will concentrate on commercial real estate ventures in the southern United States.

Sunrise Realty Trust, led by incoming CEO Brian Sedrish, aims to become a prominent player in commercial real estate debt markets. With around $115 million in assets and two commercial real estate loans already funded, SUNS will focus on various commercial real estate debt instruments, including senior mortgage loans and mezzanine loans, with an emphasis on opportunities for value creation and recapitalization in the Southern U.S.

“We believe that CRE [Commercial Real Estate] debt markets today present a significant opportunity to capitalize on market dislocations precipitated by the rise in interest rates, declining liquidity, and a retrenchment of banks from CRE lending,” said Brian Sedrish.

Upon completion of the separation, both AFC Gamma and SUNS will operate as independent entities with their own investment teams and boards of directors, mainly composed of independent members. While there will be some overlap in corporate management roles, each company is expected to benefit from a separate cost of capital and attract investors aligned with its growth opportunities.

CEO of AFC Gamma, Daniel Neville, expressed confidence in the strategic move, stating, “As separate companies, we believe each business will be better positioned to pursue tailored growth strategies.”

Shareholders of AFC Gamma will receive SUNS shares on a pro-rata basis as part of the spinoff, and a special cash dividend will be distributed. The successful execution of the spinoff remains contingent on regulatory approvals, and the process does not require shareholder approval.

#2: Aurora Cannabis

Aurora Cannabis Inc. (NASDAQ: ACB), a prominent player in the Canadian cannabis industry, made significant moves as it appointed Simona King, a seasoned executive from Bristol-Myers Squibb Company (NYSE: BMY), as its new chief financial officer. The announcement, which was made by the company on February 20, 2024, also included the completion of its share consolidation.

The appointment of Simona King marks a strategic transition for Aurora Cannabis, as she brings a wealth of experience from her tenure at Bristol Myers Squibb, a multinational pharmaceutical giant. King steps into the role previously held by Glen Ibbott, one of Aurora’s longest-serving executives. Ibbott, known for his dedication and contributions to the company since 2017, decided to step down to explore new opportunities. Despite his departure from the CFO position, Ibbott will continue to serve Aurora in an advisory capacity in the coming months.

Aurora’s CEO, Miguel Martin, acknowledged Ibbott’s substantial contributions, saying, “Since 2017, Glen has dedicated immeasurable time, energy, and passion to shaping Aurora into a leading medical cannabis company; and we have been fortunate to have his leadership over the years as we navigated this emerging industry. We wish him all the best for his future endeavors.”

Additionally, the company announced the completion of its share consolidation process. In late January, Aurora unveiled its plan to consolidate shares on a 10-to-1 basis, a move aimed at restoring compliance with Nasdaq’s minimum bid-price requirement and enhancing access to institutional investors. The consolidation plan effectively reduced Aurora’s outstanding shares from 475,903,822 to 47,590,382, streamlining the company’s capital structure and bolstering its financial stability.

The appointment of Simona King and the completion of the share consolidation reflect Aurora Cannabis’s proactive approach to adaptability and growth in a dynamic industry landscape. As the company continues its journey, these strategic initiatives position Aurora to capitalize on emerging opportunities and drive sustainable value for its stakeholders.

#3: Ascend Wellness

Ascend Wellness Holdings, Inc. (OTC: AAWH) announced its acquisition of a second cultivation license and associated operations in Massachusetts, further solidifying its presence in the state’s emerging cannabis market.

The company’s CEO, John Hartmann, expressed enthusiasm about the acquisition, emphasizing Ascend’s dedication to Massachusetts and its commitment to expanding cultivation and production capabilities within the state. He stated, “Densifying our key markets is a stated strategy for our business, and this reinforces that focus.”

Ascend’s decision to expand comes on the heels of significant growth in both wholesale and retail markets in Massachusetts. The company currently operates three retail stores in Boston, Newton, and New Bedford, which have experienced a surge in consumer demand. Hartmann attributed this demand to the success of the Simply Herb brand, introduced in the state less than two years ago. According to data from BDSA, Simply Herb has quickly risen to become the top-selling brand in Massachusetts, outpacing competitors in fourth-quarter sales.

The newly acquired facility, located in Amesbury, is pending regulatory approval, anticipated to be granted in the first half of 2024. Until approval is secured, Ascend will operate the facility under an interim consulting agreement. The Amesbury facility boasts a 54,000 sq. ft. area, with plans for significant investment to expand canopy space to 15,000 sq. ft. and establish a state-of-the-art kitchen.

When combined with Ascend’s existing cultivation and production facility in Athol, Massachusetts, the acquisition will increase the company’s total cultivation space in the state to an impressive 70,000 sq. ft. of canopy. This expansion positions Ascend Wellness Holdings as a key player in Massachusetts’ rapidly evolving cannabis industry.

#4: Agrify

Agrify Corporation (NASDAQ: AGFY) recently made headlines with its preliminary unaudited financial results for the fourth fiscal quarter of 2023. While Agrify showcased notable reductions in losses, it notably omitted any mention of revenue figures, leaving investors and analysts speculating about the company’s financial performance.

 In the latest announcement, Agrify reported a significant decrease in its net loss for the fourth quarter, which is expected to stand at a historical low of $750,000. This marks a notable improvement compared to the $2.1 million net loss reported in the third quarter and the staggering $58 million loss in the fourth quarter of 2022. Additionally, the loss from operations is projected to decrease by 46% to a historical low of $2.5 million, down from $4.6 million in the third quarter.

Agrify’s optimism extends further as it anticipates achieving its lowest net cash burn in company history for the fourth quarter. Furthermore, it aims to approach cash flow break-even by the second half of 2024, indicating a promising trajectory towards financial sustainability.

Despite the positive projections, Agrify left stakeholders wanting more, as it refrained from disclosing revenue figures, a crucial metric that reflects the company’s ability to generate income and sustain growth. While reductions in losses are undoubtedly commendable, investors are keen to assess the company’s revenue streams and overall financial health.

Agrify assured stakeholders that official results will be released by the end of March, shedding light on its financial performance and the progress of its projects. Until then, investors will eagerly await further insights into Agrify’s revenue generation capabilities and its path towards profitability.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) a clinical-stage biotechnology firm dedicated to developing therapy-assisted treatments for addiction, particularly focusing on Alcohol Use Disorder (AUD), announced its approval to list the common shares of the company on the Canadian Securities Exchange (CSE) under the symbol “AWKN” effective February 13, 2024. This decision came as a significant strategic move, aligning with Awakn’s commitment to advancing its business operations and enhancing shareholder value.

Awakn ceased trading on Cboe Canada as of the close of trading on February 12, 2024. Shareholders did not need to take any action regarding this change of listing.

Awakn operates at the forefront of clinical-stage biotechnology, focusing on developing innovative medication-assisted treatments for addiction, with a primary emphasis on addressing AUD. AUD impacts approximately 51 million individuals in the US and key European markets, affecting a staggering 285 million people globally, for whom existing treatment modalities often fall short. Awakn’s mission is to deliver breakthrough therapeutics to individuals grappling with addiction, aiming to revolutionize the standard of care in this domain.

The company’s strategic roadmap is centered on commercializing its robust research and development pipeline across diverse channels, thereby ensuring broad accessibility to its groundbreaking treatments.

As Awakn embarked on this new chapter of growth and expansion with its listing on the CSE, it reaffirmed its dedication to advancing the frontiers of addiction therapy and creating sustainable value for its stakeholders.

Key Takeaways; Cannabis Sector

• Canopy Growth reported a CA$216 million loss amid board shake-ups.
• Aurora Cannabis expanded presence in Australian medical cannabis market with MedReleaf acquisition.
• Ayr Wellness strategically extended debt maturity and raised more capital.
• Curaleaf expanded into Polish medical cannabis market with Can4Med acquisition.

Key Takeaways; Psychedelic Sector

• Awakn’s phase III clinical trial for AWKN-001 recognized in psychedelic drug development pipeline bullseye chart.
•  Clearmind expanded psychedelic portfolio with new Chinese patent approval.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Canopy Growth

Canadian cannabis giant Canopy Growth Corporation (NASDAQ: CGC) recently announced a series of significant developments alongside its third-quarter financial results. Despite reporting a lower net loss of CA$216.7 million compared to previous periods, the company’s revenue saw a decline, reflecting a challenging landscape in the cannabis industry.

The company reported a 7% decrease in total net revenue, amounting to CA$78.5 million for the third quarter of the fiscal year ending December 31, 2023. This decline was primarily attributed to lower Canadian cannabis sales, which dropped 16.3% year-over-year.

Additionally, the company reported a concerning challenge whereby the cash burn rate significantly reduced cash and cash equivalents to CA$142 million by the end of 2023.

One major highlight of the financial report was the board shake-up within Canopy Growth. The company disclosed changes to its board of directors, signaling a strategic shift in its leadership structure. Robert L. Hanson stepped down from the board, with Willy Kruh and Luc Mongeau appointed as new members. Both are expected to bring fresh perspectives to Canopy’s strategic direction.

The board adjustments coincide with Canopy’s intensified focus on its Canopy USA strategy, aimed at capitalizing on opportunities in the United States cannabis market. This strategy involves the creation of non-voting, non-participating exchangeable shares, a move subject to shareholder approval scheduled for April 12.

Looking ahead, Canopy Growth faces critical decisions regarding its financial sustainability. The company’s latest financial filing highlighted concerns about meeting short-term debt obligations and the need for additional financing to support its operations. Despite these challenges, CFO Judy Hong expressed confidence in Canopy’s ability to achieve sustained profitability and drive growth in the coming quarters.

#2: Aurora Cannabis

Aurora Cannabis Inc. (NASDAQ: ACB), a leading Canadian marijuana producer, acquired the remaining 90% equity interest of MedReleaf Australia, solidifying its presence in one of the largest federally regulated medical cannabis markets globally. The acquisition, which is valued at 50 million Australian dollars, signified Aurora’s strategic move to tap into the growing Australian market.

Australia’s medical cannabis sector has witnessed steady growth, positioning itself as one of the top two federally legal medical cannabis markets globally, alongside Canada. Aurora’s acquisition bolsters its foothold in both major markets, marking a significant milestone in the company’s expansion strategy.

Additionally, Aurora also announced its financial results for the quarter ended Dec. 31, 2023. In its financial report, the company reported a net loss of 25.2 million Canadian dollars, showcasing a 60% improvement compared to the same period the previous year.

Notably, medical cannabis sales for Aurora surged by 16% year-over-year, reaching CA$45.1 million in Q3, contributing to a total net revenue of CA$64.4 million. Despite encountering challenges in the recreational cannabis sector, with consumer cannabis net revenue dropping to CA$11.6 million, Aurora remains optimistic.

The company anticipates achieving positive free cash flow in the calendar year 2024 and emphasized its commitment to a debt-free status. As a result, the company announced plans to settle its remaining convertible debenture balance of approximately CA$7.3 million in late February. This financial stability will position Aurora uniquely in an industry where high debt loads and interest payments have significantly impacted profitability and flexibility.

#3: Ayr Wellness

Ayr Wellness Inc. (OTC: AYRWF), a prominent marijuana multistate operator (MSO), announced that it had successfully implemented measures to manage its significant debt. The company completed its plan to extend the maturity date of senior notes from 2024 to 2026, a move aimed at enhancing financial flexibility and long-term growth opportunities according to the company.

This maneuver is part of a broader plan by the company to manage its financial obligations, over the past year, Ayr Wellness has retired or extended the maturity of nearly $400 million in debt, signifying a proactive approach to financial management and stability.

To facilitate this restructuring, Ayr Wellness raised $40 million in new capital by issuing additional senior notes maturing in 2026. As a result, the company issued millions of subordinate voting shares to noteholders and shareholders, along with anti-dilutive warrants.

Moreover, Ayr Wellness announced the addition of Jared Cohen to its board of directors, pending necessary state cannabis regulatory approvals. Cohen’s expertise as a partner at FiSai Investments, is expected to enrich the company’s strategic vision and governance.

CEO David Goubert emphasized that these strategic actions are designed to position Ayr Wellness for sustained growth and enable the company to capitalize on favorable industry trends anticipated in the coming years. “These actions are designed to provide AYR with the flexibility to execute on its long-term growth strategy and take advantage of positive macro catalysts that are expected in the industry,” said David Goubert in a statement.

Ayr Wellness is scheduled to report its fourth-quarter and full-year earnings for 2023 on March 13, offering further insights into its financial performance and growth trajectory.

#4: Curaleaf

Curaleaf International, a London-based cannabis company and subsidiary of Curaleaf Holdings, Inc. (OTC: CURLF), made a significant move by acquiring Can4Med, a Polish medical cannabis operator headquartered in Wroclaw.

This acquisition marked Curaleaf’s entry into Poland, an emerging market for medical marijuana in Europe. Although the financial specifics of the deal were not disclosed, the strategic move underscores Curaleaf’s commitment to expanding patient access to medical cannabis products across the world.

Can4Med specializes in the acquisition, registration, and distribution of medical cannabis in Poland, making it an asset for Curaleaf International’s growth strategy. Curaleaf Holdings CEO, Matt Darin, emphasized the importance of this acquisition, stating that Poland’s medical cannabis market is experiencing rapid expansion, and partnering with Can4Med allows Curaleaf to better serve patients while driving growth across Europe.

According to Curaleaf, Poland distributed over 3,000 kilograms (3 metric tons) of medical cannabis in 2023, indicating a significant demand for such products in the country. In August, Curaleaf International achieved a milestone by registering its cannabis-based medicines as extracts in Poland through its local partner, CanPoland S.A.

Prior to the Can4Med acquisition, Curaleaf International had already secured registrations for its products in Malta and became the first company to register a THC-based cannabis extract active pharmaceutical ingredient in Italy. These achievements highlight Curaleaf’s position as a leader in expanding medical cannabis access throughout Europe.

Top Psychedelic Companies for Week

#1: Awakn

In the ever-evolving landscape of pharmaceuticals, particularly in the realm of mental health treatment, the emergence of psychedelics as potential therapeutics has garnered significant attention. Among the myriad of companies working in this space, Awakn Life Sciences Corp. (OTC: AWKNF) stands out with its pioneering efforts in addressing Severe Alcohol Use Disorder (SAUD) through its lead program, AWKN-001. Recently, Awakn’s Phase III clinical trial for AWKN-001 earned recognition in Psyched Alpha’s psychedelic drug development pipeline bullseye chart for year-end 2023, marking a significant milestone in the field of psychedelic medicine.

Severe Alcohol Use Disorder poses a substantial public health challenge globally, affecting millions of individuals and their families. Conventional treatment options for SAUD often fall short in providing sustainable outcomes, leaving a pressing need for more effective interventions. Recognizing this unmet medical need, Awakn Life Sciences embarked on a mission to harness the therapeutic potential of psychedelic compounds to address SAUD comprehensively.

The recognition of Awakn’s Phase III clinical trial in Psyched Alpha’s psychedelic drug development pipeline bullseye chart underscores the company’s dedication to advancing the field of psychedelic medicine and addressing critical unmet needs in mental health treatment.

#2: Clearmind

Clearmind Medicine Inc. (NASDAQ: CMND), a biotech company based in Tel Aviv, Israel, and Vancouver, Canada, recently secured patent approval in China for a novel psychedelic substance-based treatment targeting binge behaviors. The patent encompasses the use of a specific chemical compound, a primary amine aminoindan, to mitigate binge behaviors, extending beyond Clearmind’s proprietary molecule, 5-methoxy-2-aminoindan (MEAI).

MEAI, primarily developed to address alcohol use disorder, offers promise as a solution for individuals struggling with excessive alcohol consumption. Clearmind envisions its application extending to binge drinking, potentially providing relief for millions affected by this issue.

The approval marked a significant milestone in Clearmind’s strategy to establish intellectual property rights in the psychedelic-derived therapeutics field. With 27 patents already granted and 24 applications pending across multiple jurisdictions including the US, Europe, China, and India, the company is solidifying its position as a leader in psychedelic therapeutics research.

Key Takeaways; Cannabis Sector

• High Tide reported record sales, as the company eyes expansion to Germany.
• Cannara Biotech achieved record cannabis sales in first quarter.
• Tilt Holdings aims to enhance the vape supply chain through debt restructuring with Smoore.
• Aurora Cannabis is planning to consolidation its shares to regain Nasdaq compliance.

Key Takeaways; Psychedelic Sector

• Numinus Wellness successfully raised $6 million in bought deal public offering.
• Awakn successfully completed an investigative study that focused on advanced treatment for alcohol use disorder.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: High Tide

High Tide Inc. (NASDAQ: HITI), a cannabis retailer and e-commerce platform operator based in Alberta, Canada, announced impressive financial performance for the 2023 fiscal year, ending in October. The company reported record sales of 487.7 million Canadian dollars ($362 million), marking a significant milestone in its growth trajectory. Despite this achievement, High Tide also disclosed a net loss of CA$41 million for the year, a substantial improvement from the previous year’s net loss of CA$71 million.

The company remains a dominant force in the Canadian cannabis market, boasting 163 store locations and serving 4.9 million customers across Canada, the United States, and Europe. High Tide’s CEO, Raj Grover, emphasized the company’s commitment to expanding its footprint both domestically and internationally. Grover highlighted the potential for international expansion, particularly in Germany, where the legalization of “cannabis clubs” and adult-use pilot projects could present lucrative opportunities for the company.

High Tide’s financial report also highlighted positive trends in free cash flow throughout the year, indicating improved operational efficiency and financial stability. The company reported a shift from negative cash flow in the first quarter to positive cash flow of CA$5.7 million in the final quarter.

Additionally, as of October 31, 2023, High Tide reported cash reserves of CA$30.1 million and gross debt of CA$28.8 million as of late January 2024, indicating a healthy financial position despite ongoing investment and expansion efforts.

With a positive outlook for the cannabis industry, fueled by regulatory advancements and growing consumer demand, High Tide remains optimistic about its prospects for continued growth and success in the global cannabis market.

#2: Cannara Biotech

Cannara Biotech Inc. (OTC: LOVFF), a leading cannabis producer headquartered in Montreal, announced record-breaking sales figures for the first quarter of fiscal year 2024. The company reported revenues of 19.5 million Canadian dollars ($14.6 million) for the three-month period ending on November 30.

This impressive figure represented an 89% surge compared to the CA$10.3 million recorded during the same period the previous year. Notably, Cannara Biotech’s net income for the September-November quarter amounted to CA$2.1 million, a significant leap from almost CA$3,000 in the first quarter of 2023.

Moreover, the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a key profitability metric, soared to CA$5.2 million, marking a remarkable 206% year-over-year increase. Additionally, free cash flow for the quarter surged to CA$4.9 million, reflecting a substantial 145% rise compared to the previous year.

Additionally, Cannara Biotech disclosed a cash reserve of CA$2.6 million at the end of the quarter, emphasizing the company’s financial stability and liquidity.

The company’s robust infrastructure includes two expansive facilities in Quebec, spanning over 1.65 million square feet, with the capacity to yield approximately 100,000 kilograms (100 metric tons) of cannabis annually.

CEO Zohar Krivorot expressed excitement about the company’s upward trajectory, stating, “As we build on this momentum in 2024, our roadmap is clear, continued execution with excellence, cost efficiencies, and product innovation.”

#3: Tilt Holdings

Arizona-based marijuana vaporizer company TILT Holdings Inc. (OTC: TLLTF) recently restructured its debt with Smoore Technology Limited, aiming to bolster its vape supply chain and meet growing customer demands.

Under the agreement, which came into effect on January 28, Tilt’s subsidiary, Jupiter Research, received extended credit from Smoore, allowing Tilt to procure more CCell vape hardware products. Additionally, Smoore will maintain a first lien security interest in Tilt’s assets, therefore securing the credit line.

The restructuring involved Tilt guaranteeing the repayment of debts to Smoore, particularly for invoices overdue by more than 120 days. Sinosure, a Chinese export and credit insurance corporation, is expected to provide insurance coverage for the unpaid invoices beyond the 120-day mark.

Moreover, as part of the agreement, Tilt commited to reducing its outstanding balance with Smoore to $25 million by the end of 2024. According to the company, the repayment plan will prioritize settling invoices older than 150 days initially, and gradually address those over 120 days.

The restructuring with Smoore marks a strategic move for Tilt Holdings, ensuring a more robust vape supply chain amidst increasing market demands. Through collaborative efforts with Smoore and supportive noteholders, Tilt aims to enhance operational efficiency and sustain growth in the burgeoning marijuana vaporizer market.

#4: Aurora Cannabis

Canadian cannabis producer Aurora Cannabis Inc. (NASDAQ: ACB) announced plans to consolidate its shares in a bid to regain compliance with the Nasdaq’s minimum bid-price requirement. According to the company, this move is aimed at maintaining access to institutional investors and ensuring financial stability for the company.

The decision, which was approved by Aurora’s board of directors, will involve consolidating outstanding common shares at a ratio of one share for every 10 currently outstanding shares, subject to regulatory and stock exchange approvals. This action will significantly reduce the company’s outstanding shares from 475,903,822 to 47,590,382.

Aurora Cannabis anticipates the share consolidation to take effect around February 20th.

The Nasdaq requires listed equities to maintain a minimum bid price of $1. Falling below this threshold for 30 consecutive trading days renders a company deficient with the bid-price rule. Currently, Aurora’s shares are trading at $0.39 on the Nasdaq, necessitating prompt action to meet compliance standards.

Aurora joins several other cannabis companies on the Nasdaq’s list of noncompliant entities. These include Agrify Corporation (NASDAQ: AGFY), BYND Cannasoft Enterprises Inc. (NASDAQ: BCAN), Greenlane Holdings, Inc. (NASDAQ: GNLN), Hempacco Co., Inc. (NASDAQ: HPCO), IM Cannabis Corp. (NASDAQ: IMCC), and InMed Pharmaceuticals Inc. (NASDAQ: INM), each facing a compliance challenge from bid-price deficiency.

Top Psychedelic Companies for Week

#1: Numinus Wellness

Numinus Wellness Inc. (OTC: NUMIF), a mental health care company specializing in psychedelic-assisted therapies, successfully completed a bought deal public offering, raising $6 million. The company entered into an agreement with Eight Capital, representing a syndicate of underwriters, including co-lead underwriter and joint bookrunner Stifel GMP, to purchase 50,000,000 units at a price of $0.12 per unit.

The offering, which was conducted through a prospectus supplement to the company’s short-form base shelf prospectus, received lead orders from Integrated V.C., a venture fund committed to transforming global health and well-being, and the Multidisciplinary Association for Psychedelic Studies (MAPS), a non-profit organization specializing in psychedelic research and education.

Each unit comprises one common share and one common share purchase warrant, with the warrant exercisable at $0.18 per share for a 24-month period from the closing date of the offering. Additionally, Eight Capital holds an over-allotment option, allowing the purchase of up to 15% in additional units, potentially generating an additional $900,000 in proceeds.

The offering is expected to close on or about February 7, 2024, and is subject to regulatory and stock exchange approvals, including approval from the Toronto Stock Exchange. Numinus stated that it intends to utilize the proceeds for working capital and general corporate purposes as it continues to advance its mental health care initiatives.

#2: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) achieved a significant milestone in its quest to address Alcohol Use Disorder (AUD). In a recent announcement, the clinical-stage biotechnology company revealed the successful completion of an investigative study evaluating the dissociative effects of a proprietary S-ketamine oral thin film (OTF) formulation.

The study, which involved 28 participants classified as harmful drinkers, demonstrated the potential of Awakn’s S-ketamine OTF to induce dissociative effects, crucial for addiction treatment. The formulation proved well-tolerated with no serious adverse effects reported. Importantly, participants experienced a notable reduction in alcohol cravings compared to the placebo group.

This achievement followed Awakn’s strategic partnership with LTS Lohmann Therapie-Systeme AG, which granted Awakn global exclusivity for the use of its S-ketamine OTF in addiction, anxiety disorders, and eating disorders treatment.

Awakn designates this program as AWKN-002. And the company stated that this program, which combines the S-ketamine OTF with manualized relapse prevention cognitive-behavioral therapy (CBT) will target the US market for AUD treatment. This will complement the existing AWKN-001 program, which focuses on Severe AUD treatment in the UK market using intravenous racemic ketamine and manualized relapse prevention CBT.

Prof. Celia Morgan, the principal Investigator on the study, remarked on this significant milestone, “The rapid onset and offset of action of AWKN-002 and the ease of clinical use observed in our investigative study compared to IV ketamine has galvanized our view that this represents a way to dramatically widen access to ketamine treatment. AWKN-002 means that we may reach more of the patients that desperately need this life-saving addiction treatment”.

Looking ahead, Awakn plans to engage with the US Food and Drug Administration for a pre-IND meeting, marking a pivotal step towards advancing AWKN-002 through late-stage clinical trials.

Key Takeaways; Cannabis Sector

• Planet 13 sold its marijuana license in Florida to facilitate expansion in the state; the company also announced plans to restate financials.
• The Cannabist Co. initiated a $25 million debt buyback strategy.
• Organigram shareholders overwhelmingly approved C$124M investment from British American Tobacco.

Key Takeaways; Psychedelic Sector

• Awakn successfully completed an investigative study that focused on advanced treatment for alcohol use disorder.
• FDA cleared Cybin for phase 2 DMT study.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Planet 13

Planet 13 Holdings Inc. (OTC: PLNH), a Nevada-based marijuana multistate operator, recently completed a strategic move to propel its expansion plans in Florida. The company successfully sold all shares of its subsidiary, Planet 13 Florida, to SGW FL Enterprises LLC, fetching a cash payment of $9 million in return. This transaction involved the transfer of a crucial medical marijuana treatment center (MMTC) license held by the Florida-based subsidiary.

The divestiture of the MMTC license was a crucial step for Planet 13 to advance its planned acquisition of VidaCann, a prominent medical marijuana company in Florida with extensive cultivation facilities and a robust retail network within the state’s medical market. The company stated that the $9 million obtained from the sale will play a pivotal role in facilitating the integration of VidaCann into Planet 13’s operations.

CEO Bob Groesbeck emphasized the significance of this strategic move in the company’s expansion strategy in Florida. “Part of the appeal of this deal is the amazing management team of VidaCann that has built it into the 9th largest Florida cannabis company with limited debt or outside capital. We believe their ability to run lean, efficient operations are a cultural and strategic fit with Planet 13’s company-wide philosophy and operations in other states,” commented Bob Groesbeck.

In a subsequent development, Planet 13 revealed its intention to restate certain financials. The company acknowledged the need to restate annual results for 2021 and 2022, along with quarterly results for the first three quarters of 2023. According to Planet 13, this decision arose from an internal investigation initiated by the company in November, which uncovered the misappropriation of $22 million of the company’s funds. The funds in question were held by the investment firm El Capitan Advisors.

#2: The Cannabist Co

The Cannabist Company Holdings Inc. (OTC: CBSTF), a prominent multistate operator in the marijuana industry, took a significant step towards financial restructuring by announcing a deal to repurchase up to $25 million in principal on senior secured debt through the issuance of shares.

The senior secured convertible notes, slated for maturity in June 2025, carry a 6% interest rate. The potential repurchases, amounting to $25 million, could involve the issuance of approximately 68.6 million shares, as disclosed by The Cannabist Co.

The debt repurchase plan, which was initially announced in September 2023, coincided with a $25 million private placement of units with the same institutional investors.

CEO David Hart expressed satisfaction with the agreement, stating, “We are pleased to have reached agreement on the previously announced transaction to reduce leverage and decrease interest expense, maintaining momentum for our balance sheet improvement plan.”

The Cannabist Co aims to fortify its financial position and build on its balance sheet improvement plan with this strategic move, this after the company has experienced some challenges in recent months. Notably, the company’s’ leadership underwent a change earlier this month, with David Hart taking over as CEO, succeeding co-founder Nick Vita. The company had also had a name change from Columbia Care in September 2023, a decision prompted by the collapse of Columbia Care’s planned mega-merger with Cresco Labs Inc. (OTC: CRLBF).

#3: Organigram

In a significant move that deepens British American Tobacco p.l.c. (NYSE: BTI) ties to the cannabis industry, Organigram Holdings Inc. (NASDAQ: OGI) received resounding approval from its shareholders for a C$124.6 million investment deal offered by a BAT subsidiary. The investment, finalized in a shareholder meeting on January 18, marked a pivotal moment for both companies.

With an overwhelming 96% approval rate, Organigram shareholders embraced the substantial investment from BAT, solidifying the tobacco giant’s financial stake in the Canadian cannabis operator. This investment underscores BAT’s strategic partnership with Organigram, which began Title: Organigram Shareholders Overwhelmingly Approve C$124M Investment from British American Tobacco

The investment deal, which closed last week, grants BAT a total equity of 45% in Organigram, coupled with a 30% ownership position in common voting shares. The funding infusion is expected to be a transformative force for Organigram, according to CEO Beena Goldenberg.

Organigram plans to utilize the capital to expand its international footprint and support additional research and development in the cannabis sector. Specifically, the company said that it will establish a “strategic investment pool” named Jupiter to efficiently deploy funds globally.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) achieved a significant milestone in its quest to address Alcohol Use Disorder (AUD). In a recent announcement, the clinical-stage biotechnology company revealed the successful completion of an investigative study evaluating the dissociative effects of a proprietary S-ketamine oral thin film (OTF) formulation.

The study, which involved 28 participants classified as harmful drinkers, demonstrated the potential of Awakn’s S-ketamine OTF to induce dissociative effects, crucial for addiction treatment. The formulation proved well-tolerated with no serious adverse effects reported. Importantly, participants experienced a notable reduction in alcohol cravings compared to the placebo group.

This achievement followed Awakn’s strategic partnership with LTS Lohmann Therapie-Systeme AG, which granted Awakn global exclusivity for the use of its S-ketamine OTF in addiction, anxiety disorders, and eating disorders treatment.

Awakn designates this program as AWKN-002. And the company stated that this program, which combines the S-ketamine OTF with manualized relapse prevention cognitive-behavioral therapy (CBT) will target the US market for AUD treatment. This will complement the existing AWKN-001 program, which focuses on Severe AUD treatment in the UK market using intravenous racemic ketamine and manualized relapse prevention CBT.

Prof. Celia Morgan, the principal Investigator on the study, remarked on this significant milestone, “The rapid onset and offset of action of AWKN-002 and the ease of clinical use observed in our investigative study compared to IV ketamine has galvanized our view that this represents a way to dramatically widen access to ketamine treatment. AWKN-002 means that we may reach more of the patients that desperately need this life-saving addiction treatment”.

Looking ahead, Awakn plans to engage with the US Food and Drug Administration for a pre-IND meeting, marking a pivotal step towards advancing AWKN-002 through late-stage clinical trials.

#2: Cybin

Cybin Inc. (NYSE: CYBN), received clearance from the U.S. Food and Drug Administration (FDA) for its investigational new drug (IND) application for CYB004, a proprietary deuterated dimethyltryptamine (DMT) molecule. The clearance marked a significant milestone in Cybin’s efforts to develop innovative treatments for Generalized Anxiety Disorder (GAD).

The FDA’s approval allows Cybin to proceed with its Phase 2a study of CYB004, slated to commence in the first quarter of 2024. According to the company, this study will be a randomized, double-blind, active-controlled trial conducted at various sites across the United States. Its primary objective is to evaluate the preliminary clinical efficacy, safety, tolerability, pharmacokinetics, and pharmacodynamics of CYB004 in individuals suffering from GAD.

With the FDA clearance and positive Phase 1 results, Cybin aims to advance the development of CYB004 as a potential therapeutic option for Generalized Anxiety Disorder. The company continues to explore the safety and efficacy of deuterated DMT molecules, with a focus on addressing mental health conditions such as anxiety and depression.

Key Takeaways; Cannabis Sector

• Tilray narrowed loss to $46 million in Q2 2024 amid record sales.
• Canopy Growth’s financial struggles prompted a $30 million equity raise through private placement.
• Cannabis MSO 4Front Ventures converted debt to equity and welcomed new CEO.

Key Takeaways; Psychedelic Sector

• PharmaTher is anticipating FDA approval for ketamine treatment in April 2024.
• Awakn’s AWKN-P001 advanced to phase III after promising phase II a/b trial results.

Two weeks into the new year, the cannabis sector is buzzing with anticipation as a recent unredacted exchange among federal authorities revealed a compelling catalyst for a potential rally. The released documents from the Health and Human Services disclosed that federal scientists are recommending the removal of marijuana from the Schedule One drug classification. Their argument contends that cannabis is less risky and has a lower potential for abuse compared to other Schedule One substances like heroin. The letter also highlighted significant changes since the last DEA consideration in 2015, including congressional adjustments to cannabis classification and notable medical advancements. With pressure mounting on the DEA to acknowledge these findings, the sector stands on the brink of a potential resurgence.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Tilray

Canadian cannabis producer Tilray Brands, Inc. (NASDAQ: TLRY) reported a reduced loss of $46.2 million in the second quarter of the fiscal year 2024, thanks to a surge in net sales. The company’s Q2 revenue reached $193.8 million, marking a 34.4% year-over-year (YoY) improvement and meeting analyst expectations.

All key operating segments, including cannabis, distribution, wellness, and beverage alcohol, contributed to the revenue growth.

Cannabis sales saw a significant increase, reaching $67.1 million compared to $49.9 million in the same quarter the previous year. The distribution business experienced a 12% YoY revenue jump to $67.2 million. The wellness business saw a modest 2.2% increase to $12.9 million, while net revenue in the beverage alcohol segment more than doubled to $46.5 million; As a result, Tilray is now the fifth-largest craft beer brewer in the U.S., according to the company.

The adjusted EBITDA for Q2 was $10.1 million, slightly lower than the previous year. Tilray said that they are aiming for an adjusted EBITDA target of $68 million to $78 million for the fiscal year ending in May 2024 and expects positive adjusted free cash flow.

However, the company revised its adjusted free cash flow definition, excluding integration costs from the September 2023 acquisition of eight beer and beverage brands. Adjusted free cash flow for the second quarter was negative $18.4 million, while free cash flow without adjustments was negative $36.2 million. As of November 30, Tilray’s cash and cash equivalents amounted to $143.4 million

Tilray’s CEO, Irwin Simon, highlighted the company’s revenue growth, capital structure enhancement, and operational synergies, reaffirming its position as a leading cannabis operation in Canada and Europe; “We grew revenue, enhanced our capital structure, and realized operating synergies while strengthening Tilray Brands’ position as the #1 cannabis operation and brand portfolio in Canada by sales volume and market share, the European market leader in medical cannabis, and the leader in branded hemp products,” Irwin Simon said in the press statement.

#2: Canopy Growth

Canadian cannabis company Canopy Growth Corporation (NASDAQ: CGC), which has been facing financial challenges, decided to raise $30 million through a private placement of shares and warrants. The troubled company sold close to 7 million units at a price of $4.29 each. Each unit was comprised of either one Canopy share and a warrant to buy another share at $4.83, exercisable for five years immediately after the offering closes, or one share with a warrant exercisable starting six months after closing.

According to the company, the funds generated from this equity sale will be utilized to pay down debt as part of Canopy’s overall strategy for debt reduction, working capital, and other general corporate purposes. The private placement involved unspecified institutional investors and was expected to conclude on January 10.

Canopy Growth experienced a decline in share value following this announcement. The company, which is based in Smiths Falls, Ontario, has been navigating financial challenges and restructuring efforts. Notable actions include closing its flagship facility and downsizing in February 2023, divesting its BioSteel subsidiary in November, and selling its This Works skin care unit in December.

Despite these measures, Canopy Growth reported a significant annual loss of 3.3 billion Canadian dollars ($2.5 billion) for its preceding fiscal year. The company, which is eager to enter the U.S. marijuana market, previously engaged in a private placement of shares and warrants in September. Additionally, Canopy recently consolidated its shares to maintain its Nasdaq listing. The capital raised from the current private placement is no doubt crucial for the company’s ongoing efforts to stabilize its financial position and pursue strategic objectives.

#3: 4Front Ventures

In a strategic financial move, 4Front Ventures Corp. (OTC: FFNTF), a multistate cannabis operator headquartered in Phoenix, Arizona, successfully converted $23 million of its senior secured debt into equity. This transformation saw approximately 44% of the debt being changed into subordinate voting shares at a rate of 0.125 Canadian dollars ($0.094) per share.

The company also introduced 15% warrant coverage with an exercise price of CA$0.144, allowing each warrant to be exercisable for one subordinate voting share over a three-year period. The remaining $28.7 million of the loan remained unaltered, carrying a 12% interest rate. The approval process for this amendment is currently underway.

In conjunction with this financial restructuring, 4Front Ventures announced the appointment of Andrew Thut as its new CEO, effective January 8. Andrew Thut, who previously served as the company’s CFO and chief investment officer, succeeds Leo Gontmakher, the former CEO who served since May 30, 2020. While Gontmakher steps down from the CEO role, 4Front said he would continue to contribute to the company as a member of the board of directors.

The decision to convert a significant portion of the debt into equity and the leadership change signify 4Front’s commitment to optimizing its balance sheet, ensuring the financial stability of the company, and aligning its focus on long-term growth opportunities.

Top Psychedelic Companies for Week

#1: PharmaTher

Toronto-based PharmaTher Holdings Ltd. (OTC: PHRRF) announced that they are anticipating full approval from the U.S. Food and Drug Administration (FDA) in April for its ketamine-based treatment, KETARX. Initially developed for Parkinson’s Disease, the drug is poised to address a broader range of conditions, including pain, mental health, and neurological disorders.

The FDA had set an approval goal date of April 29, 2024, which PharmaTher confirmed remains on track. In the event of FDA approval, the company plans to resume a comprehensive portfolio targeting various ailments, aiming to alleviate a national ketamine shortage, seek international approvals, and continue research and development.

PharmaTher is confident in the approval and is reallocating funds for U.S. commercial scale-up and global regulatory approvals. Post-approval, KETARX production will begin in the U.S. and extend to Canada, addressing a ketamine shortage since February 2023. PharmaTher anticipates a transformative 2024, with potential restarts of paused clinical programs in the latter half of the year. The company is optimistic about ketamine’s therapeutic potential, citing positive results in mental health disorders based on recent studies.

#2: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) successfully completed a Phase II a/b clinical trial for AWKN-P001, a groundbreaking therapeutic aimed at treating Severe Alcohol Use Disorder (SAUD). AWKN-P001 combines the use of racemic ketamine, administered intravenously, with carefully designed psycho-social support to address the challenges of SAUD.

When coupled with therapy, Awakn’s innovative approach has demonstrated a significant reduction in the likelihood of relapse in Alcohol Use Disorder patients. The Phase II a/b trial results revealed remarkable success, with participants in the active arm achieving an 86% abstinence rate at 6 months post-treatment. This marked a stark contrast to the 2% abstinence rate observed pre-trial and the 25% rate seen with the current standard of care for SAUD.

AWKN-P001’s development aims to establish a licensed therapeutic for SAUD and set a regulatory precedent for combining drugs with psycho-social support to treat addiction. The therapy has already progressed to Phase III, having received regulatory and ethical approval in the second half of 2023. Awakn has secured a grant from the UK Department for most of the the Phase III trial’s costs, with the company’s expenses capped at approximately US$1 million.