Key Takeaways; Cannabis Sector

• Canopy Growth launched Wana gummies at their medical store; The company also announced the date for the release of Q1 fiscal 2024 financial results.
• Tilray surged over 20% on Wednesday after the company beat revenue estimates.
• 22nd Century announced strategic changes to enhance leadership and strengthen financial position.

Key Takeaways; Psychedelic Sector

• Awakn’s Prof. Celia Morgan made a groundbreaking presentation at this year’s PSYCH Symposium.

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

Canopy Growth Corporation (NASDAQ: CGC), one of the leading cannabis companies in the world, took another significant step in expanding its product offerings for Canadian medical patients. The company recently announced that it has made cannabis-infused gummies from Wana Brands, the foremost edibles company in North America, available through its medical cannabis division, Spectrum Therapeutics.

The move comes after Canopy Growth assumed control of all distribution, marketing, and sales of Wana’s renowned edible cannabis products in Canada. According to the company, this strategic decision highlights the strength of Canopy Growth’s North American house of brands and demonstrates the company’s commitment to providing a diverse and high-quality range of cannabis products to its customers.

David Klein, CEO of Canopy Growth, expressed enthusiasm for the collaboration, stating, “The addition of Wana gummies to our medical store provides an immediate benefit to our Canadian business and further solidifies our North American house of brands. Over the coming months, we look forward to growing Wana’s market share across both the medical and adult-use markets in Canada.”

This collaboration between Canopy Growth and Wana Brands is likely to be well-received by the Canadian medical cannabis community, offering patients more options to incorporate cannabis into their treatment plans. Additionally, as the adult-use market in Canada evolves, the availability of these popular edibles could also contribute to Canopy Growth’s success in meeting the needs of recreational consumers.

In other news, the company announced it will release its financial results for the first quarter fiscal year 2024 ended June 30, 2023, after markets closes on August 9, 2023. Furthermore, Canopy stated that following the release of the financial results, the company will host an investors’ audio webcast that will be hosted by CEO, David Klein and CFO, Judy Hong, on August 9, at 5:30 PM Eastern Time.

#2: Tilray

Tilray Brands Inc. (NASDAQ: TLRY) surprised investors with impressive financial results for the fourth quarter ending May 31. The company’s stock surged more than 20% following the announcement, as Tilray reported significant boosts in revenue and adjusted EBITDA, coupled with a reduced net loss compared to previous quarters.

Tilray posted a remarkable net revenue of $184 million for the fourth quarter, representing a significant 20% year-over-year growth. The figure surpassed the average estimate of $153.6 million projected by Yahoo analysts, amounting to a $30-million revenue beat.

Despite facing a net loss of $120 million in the fourth quarter, Tilray demonstrated significant improvement compared to the same period in the previous year when the net loss amounted to a staggering $458 million.

Additionally, in the fourth quarter, adjusted EBITDA surged by 93% to $22 million, compared to $12 million in the same quarter of the previous year. For the entire fiscal year 2023, adjusted EBITDA grew 28% to reach $61 million, compared to $48 million in the prior fiscal year. These impressive figures demonstrate Tilray’s resilience in an industry that has been facing significant challenges.

Tilray’s CEO and Chairman, Irwin Simon, expressed satisfaction with the company’s performance, stating, “We delivered on our commitment to generate positive adjusted free cash flow across all business segments, and executed against our strategic plan to grow revenue, drive operating efficiencies, and improve margins and profitability, all while investing in our industry-leading brands.”

Looking ahead, Tilray is optimistic about its future prospects. The company anticipates adjusted EBITDA of $68 million to $78 million for fiscal year 2024, representing an 11% to 27% growth compared to the full-year 2023 results. Additionally, Tilray expects to continue generating positive adjusted free cash flow, further solidifying its financial position.

#3: 22nd Century

22nd Century Group, Inc. (NASDAQ: XXII), a company focused on innovative plant technologies in the tobacco and cannabis industries, recently announced significant changes in its leadership and financial structure.

The company reported that John Miller, the leader of the tobacco business unit, had been appointed as the interim Chief Executive Officer (CEO), replacing James A. Mish, who had served as CEO since June 2020. Furthermore, 22^nd Century stated that, despite stepping down from the CEO position, James A. Mish will continue to contribute to the company’s growth as a member of the Board of Directors.

This leadership change comes at a critical time for 22nd Century Group as it embarks on new initiatives to strengthen its financial position and drive innovation in the tobacco harm reduction and health and wellness markets. As part of its effort to secure additional funds, the company successfully obtained $11.7 million in gross proceeds from registered direct financing. This capital infusion will undoubtedly support the company’s various research and development efforts in creating novel products with potential harm-reduction properties.

Moreover, the company announced the commencement of an estimated $15 million annualized cost reduction initiative. Cost optimization is a crucial strategy for businesses seeking to improve profitability and efficiency, and 22nd Century Group’s decision to undertake this initiative demonstrates its commitment to financial discipline and long-term sustainability.

Alongside the leadership changes and financial developments, 22nd Century Group expanded its Board of Directors by appointing Andrew Arno, a seasoned Wall Street veteran, as an independent director. According to the company, this addition brings valuable expertise to the board and will likely strengthen the company’s decision-making capabilities and governance practices.

In addition to these strategic moves, 22nd Century regained compliance with the NASDAQ marketplace regarding its stock selling price. In an effort to boost the stock price, the company engaged in a 1-for-15 reverse stock split at the beginning of July. This move demonstrated the company’s commitment to maintaining its listing on the Nasdaq Stock Market and provided investors with greater confidence in the company’s financial standing.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), a leading company in the field of psychedelic medicine, has been at the forefront of research on Ketamine-Assisted Therapy (KAT). Under the guidance of Professor Celia Morgan, a distinguished expert in addiction research, Awakn has been exploring the application of KAT for Alcohol Use Disorder (AUD) and behavioral addictions.

During this year’s PSYCH Symposium, Professor Celia Morgan delivered an enlightening presentation on Awakn’s groundbreaking research on KAT. The focus of the discussion was on the treatment of Alcohol Use Disorder, a pervasive problem affecting millions of people worldwide, as well as behavioral addictions, which are increasingly recognized as significant mental health challenges.

Professor Celia Morgan’s presentation at the PsychSymposium on Awakn’s Ketamine-Assisted Therapy represents a significant milestone in addiction treatment research. The preliminary findings offer hope for individuals grappling with Alcohol Use Disorder and behavioral addictions. As the field of psychedelic medicine continues to evolve, collaboration between academia, industry, and regulatory authorities will be crucial in unlocking the full potential of Ketamine-Assisted Therapy and other psychedelic interventions. Ultimately, the goal is to provide effective and evidence-based treatments that can alleviate the burden of addiction and improve the lives of countless individuals.

Key Takeaways; Cannabis Sector

• Verano announced new appointments to its board of directors.
• Tobacco giant Philip Morris is acquiring Israeli cannabis company in a $650 million deal.

Key Takeaways; Psychedelic Sector

• Awakn announced the launch of a special Portugal license partner in Lisbon.
• Psychedelic drug developer Filament Health poised for NASDAQ listing through $210 million SPAC agreement.
• Numinus Wellness reported 713.3% revenue growth in the Q3 2023 financial results.

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: Verano Holdings

Verano Holdings Corp. (OTC: VRNOF), a leading multi-state cannabis company, recently made a significant announcement regarding changes to its Board of Directors. On July 20, 2023, the company appointed John Tipton, President of the Southern Region, and Charles Mueller to join its esteemed Board.

This strategic move came alongside the retirement of Mike Smullen, a long-standing contributor to the company. According to Verano, the new appointments are expected to strengthen the Board’s skillset and expertise, further supporting the company’s mission of providing high-quality cannabis products and exceptional hospitality to its growing patient and consumer base.

John Tipton’s association with Verano began in February 2021 when he served as the Chief Executive Officer of Plants of Ruskin, LLC. This company later became a subsidiary of Verano upon its acquisition, marking the company’s entry into the flourishing Florida cannabis market. During his tenure, Tipton demonstrated exceptional skills in accounting, finance, agriculture, and construction, which were instrumental in shaping the company’s growth and success. In June 2023, he was promoted to President of the Southern Region, further solidifying his crucial role within Verano.

On the hand, Charles Mueller brings an impressive tax and accounting background to the Verano Board of Directors. His career spans over 35 years, with a substantial portion spent at PepsiCo, Inc., where he held various senior tax roles, including Vice President, State and Local Tax of the PepsiCo Corporate Division.

Verano Holdings Corp.’s Founder and Chief Executive Officer, George Archos, expressed his satisfaction with the new appointments, acknowledging the significant contributions of both John Tipton and Charles Mueller to the company.

#2: Philip Morris

Tobacco industry behemoth Philip Morris International Inc. (NYSE: PM), renowned for its Marlboro cigarettes, is set to venture into the cannabis market with an ambitious investment. The company is poised to spend up to $650 million to acquire an Israeli cannabis firm specializing in metered-dose inhalers for pain management.

The target of Philip Morris’ interest is Syqe Medical, an innovative Israeli cannabis company. According to reports, the acquisition will proceed in stages. The first stage will involve Philip Morris making a $120 million investment in Syqe Medical. Interestingly, this is not the company’s first involvement with Syqe; it had previously backed the Israeli firm with a $20 million investment in 2016.

The deal’s success hinges on Syqe Medical’s ability to navigate through clinical trials in the United States and receive approval from the U.S. Food and Drug Administration (FDA). If these milestones are achieved, Philip Morris has committed to purchasing all of Syqe Medical’s shares for a staggering $650 million. The acquisition will be conducted through Philip Morris’ subsidiary, Vectura. Should the deal be finalized, it is anticipated to catapult Syqe Medical into one of the world’s largest marijuana companies, cementing its position in the global cannabis industry.

The move by Philip Morris to invest in the cannabis sector does not come as a surprise, as the company has been hinting at its interest in marijuana-related business opportunities for several years. This strategic move is in line with an increasing trend among large tobacco companies exploring opportunities within the cannabis space.

In 2018, Altria Group, Inc. (NYSE: MO), another major player in the tobacco industry, made significant strides into the cannabis market with a whopping $1.8 billion investment in the Canadian company Cronos Group Inc. (NASDAQ: CRON). Similarly, in 2019 British tobacco company Imperial Brands PLC (OTC: IMBBY) also joined the race by investing $93.4 million in the Canadian cannabis firm, Auxly Cannabis Group Inc. (OTC: CBWTF).

Philip Morris’ substantial investment in Syqe Medical has the potential to bring about significant changes in the cannabis industry. If the acquisition is successful, Syqe will gain access to extensive financial resources and global distribution networks, enabling it to expand its product reach to new markets. Moreover, this move could signal increased interest from other major tobacco companies to explore opportunities in the cannabis sector, leading to further investments and partnerships in the marijuana space.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), announced that their exclusive Portugal license partner, The Clinic of Change, had recently opened its doors in the vibrant city of Lisbon, bringing the revolutionary Ketamine-Assisted Psychotherapy (KAP) treatment to individuals seeking relief from various mental health disorders.

Ketamine, a well-known anesthetic, has recently garnered attention for its antidepressant properties. Traditionally used in surgical settings, ketamine’s unique effect on the brain has demonstrated the potential to combat depression, anxiety, PTSD, and other mood disorders. Through a carefully administered dose of ketamine in conjunction with psychotherapy sessions, Awakn’s Ketamine-Assisted Psychotherapy aims to provide rapid relief and promote profound emotional healing.

Awakn’s introduction of Ketamine-Assisted Psychotherapy to Lisbon through its exclusive Portugal license partner, The Clinic of Change, represents a significant advancement in mental health care. This revolutionary treatment option holds the promise of rapid relief, enhanced therapeutic insights, and newfound hope for individuals grappling with mental health challenges.

#2: Filament Health

In a groundbreaking move for the psychedelic drug industry, clinical-stage drug development firm Filament Health Corp. (OTC: FLHLF) and special purpose acquisition company Jupiter Acquisition Corporation (NASDAQ: JAQC) recently announced a definitive agreement to merge. The merger will result in the creation of a new public company that is expected to be listed on the Nasdaq exchange.

The deal, which was announced on Wednesday, July 19, 2023, values Filament at $176 million or $0.85 per share, and it brings the pro forma enterprise valuation of the combined entity to approximately $210 million. The deal is anticipated to close in the fourth quarter of this year and is expected to provide the combined company with at least $5 million of net proceeds.

This strategic merger is set to propel Filament’s botanical psychedelic drug development platform to new heights. Benjamin Lightburn, CEO of Filament, expressed his enthusiasm about the partnership, emphasizing that it will give the company access to the broader capital markets necessary to advance their drug development initiatives. Lightburn stated, “Filament was founded on the belief that standardized, naturally-derived psychedelic medicines can improve the lives of millions of people suffering from treatable conditions. Partnering with Jupiter brings us a step closer to making this a reality.”

Jupiter CEO James Hauslein also echoed the excitement, praising Filament’s “novel” approach to psychedelic drug development, which involves utilizing natural botanical extracts. The collaboration between the two companies aims to leverage their respective expertise and resources to accelerate the development of effective psychedelic treatments for various medical conditions.

The proposed merger has received approval from both companies’ boards, with Filament’s board receiving a fair opinion from independent financial advisor Evans & Evans, Inc. However, the transaction is still subject to regulatory approval, court orders from the Supreme Court of British Columbia, and the consent of Filament’s security holders and Jupiter’s stockholders. To increase the likelihood of approval, directors and management of Filament, who collectively own approximately 42.8% of outstanding common shares, have committed to voting in favor of the merger.

#3: Numinus Wellness

Numinus Wellness Inc. (OTC: NUMIF), a mental health care company specializing in evidence-based psychedelic-assisted therapies, recently announced impressive financial results for the third quarter ending on May 31, 2023. The company’s revenue surged by a remarkable 713.3% year-over-year, reaching $6 million, and showed a substantial growth of 12.6% from the previous quarter.

According to the company, a significant factor contributing to this success was the gross profit, which saw an extraordinary increase of 1051.6% from the same quarter last year, amounting to $2.1 million. However, it’s essential to note that during the quarter, Numinus incurred $600,000 in one-time expenses due to staff reductions and operational realignment. As a result, the company reported a net loss of $7.2 million for the quarter.

Despite the net loss, Numinus remains financially well-positioned, boasting $13 million in cash reserves as of May 31, 2023. This stability is a positive sign for the company as it positions itself to capitalize on the opportunities emerging in the psychedelics sector.

Key Takeaways; Cannabis Sector

• Cannabis stocks rallied thanks to TerrAscend uplisting to the Toronto Stock Exchange.
• Canopy Growth’s is in danger of going out of business: The company announced debt reduction initiatives to salvage the situation.
• Organigram reported third quarter fiscal year 2023 financial results.

Key Takeaways; Psychedelic Sector

• Awakn completed sale of Awakn clinic in London.
• Cybin announced the development of a scalable psychedelic facilitation training program, EMBARK.

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: TerrAscend

Cannabis investors finally found some relief in the beginning of this month as cannabis stocks experience a much-needed boost, thanks to TerrAscend Corp. (OTC: TRSSF) uplisting to the Toronto Stock Exchange (TSX).

After enduring a bear market for nearly two years, cannabis investors were eagerly waiting for a catalyst to turn the tides, and it seems TerrAscend’s uplisting just did that. The move itself didn’t directly lead to the surge in cannabis’s stock values, but it was the response from financial giant Morgan Stanley that ignited the buying frenzy.

After uplisting to TSX, TerrAscend received recognition from Morgan Stanley, which removed the company from its restricted list. This means that investors can now trade TerrAscend’s stock like any other on the TSX, signaling a major step forward for the company.

This news had an immediate positive impact on the cannabis sector, with US Cannabis ETF experiencing a 3.7% increase following the announcement. TerrAscend’s stock witnessed a significant jump of 2.5% to reach $1.71. Although it has a way to go to reach its 52-week high of $3.09.

TerrAscend’s uplisting opens the possibility of being listed on a major American exchange as an American Depository Receipt (ADR). ADRs facilitate foreign companies with the opportunity to trade in major exchanges in the United States, which opens new avenues for growth and investment opportunities.

TerrAscend’s successful uplisting has not gone unnoticed by other cannabis companies. Many are closely monitoring these developments and may attempt to replicate TerrAscend’s strategy. While not all companies can restructure in the same way to uplist, it’s clear that TerrAscend’s move has set a positive precedent for the industry.

#2: Canopy Growth

Canopy Growth Corp. (NASDAQ: CGC), one of the largest cannabis companies in the world, is facing a significant setback as its stock plunged over 40% on Friday after receiving a warning from NASDAQ regarding its stock falling below $1 for a period of over 30 consecutive days.

To address its financial situation, Canopy Growth announced a series of agreements aimed at deleveraging its balance sheet. The company entered into privately negotiated redemption agreements with holders of its unsecured senior notes due July 15, 2023, as well as agreements with certain lenders under its term loan credit agreement. According to the company, these measures are expected to reduce Canopy’s total debt by approximately $437 million over the next six months and lower annual interest costs by $20 to $30 million.

Canopy Growth’s Chief Financial Officer, Judy Hong, expressed satisfaction with the agreements, stating that they would enable the company to preserve cash and strengthen its balance sheet. Hong also highlighted the company’s ongoing cost reduction program and its commitment to long-term value creation. “We are pleased to have worked constructively with our lenders to reach these agreements which enable Canopy Growth to preserve cash, and further improve its balance sheet through accretive and meaningful reductions in its overall debt,” said Judy Hong.

In addition to the debt reduction initiatives, Canopy Growth said it will retain around $92 million in cash by settling approximately $193 million in aggregate principal amount of its existing notes. The company stated that it will also make a cash payment of $93 million to reduce $100 million of principal indebtedness under its credit facility. Furthermore, Canopy Growth said it expects further principal reductions through asset sales.

However, despite the efforts to improve its financial position, Canopy Growth has faced skepticism from analysts and investors. Fitch Ratings downgraded the company’s long-term issuer default rating (IDR) from CCC- to RD due to recent debt swaps and operational concerns.

#3: Organigram

Organigram Holdings Inc. (NASDAQ: OGI) reported a drop in net revenue and rising operating costs in its financial results for the third quarter ending May 31, 2023. The company saw a 14% decrease in net revenue to $32.8 million compared to the same period last year, mainly due to a decline in recreational flower sales. This decline led to increased costs of sales and a decrease in gross margin.

Despite the challenging financial results, Organigram’s CEO, Beena Goldenberg, remains optimistic about the company’s future. Goldenberg expressed confidence in Organigram’s strategy and stated that the company is focused on sustainable long-term growth. “Our outlook moving into next year remains positive with the foundation now in place to deliver continued growth,” Goldenberg said in a press statement.

Organigram’s CFO, Derrick West, attributed the decline in sales and margins to some producers inflating THC values on their labels. He stated that Organigram has taken steps to increase whole flower THC levels to meet consumer demand. “We believe that based on this progress we will return to positive adjusted EBITDA in Q4 Fiscal 2023,” he said.

Looking ahead, Organigram said it expects higher net revenue in the fourth quarter, mainly due to the growth of its expanded product line across multiple categories. The company also stated that it anticipates improved adjusted gross margins and a return to positive adjusted EBITDA. In addition, Organigram said that it believes its capital position is healthy and that it has sufficient liquidity available for the near to medium term.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), announced the completion of the sale of its subsidiary, Awakn London Limited, which operates the Awakn Clinics London in the United Kingdom. The subsidiary was acquired by Awakn Via Amitis Ltd., which is a joint venture between Via (formerly WDP), a leading UK healthcare charity, and Amitis Group, a private UK investment company.

As part of the agreement, Awakn granted Awakn Via Amitis Ltd. an exclusive license to certain elements of its healthcare services intellectual property within the UK. Additionally, Awakn Via Amitis Ltd. obtained a non-exclusive license for Awakn Kare, a proprietary treatment for alcohol relapse prevention, within the UK. In return, Awakn will receive a share of the revenue generated by Awakn London Limited.

The sale of Awakn Clinics London represents an important milestone for Awakn Life Sciences. The transaction allows the company to focus its resources on its research and development (R&D) programs while ensuring continuity of care for clients and employees in London.

Awakn CEO Anthony Tennyson expressed satisfaction with the completion of the sale, emphasizing that it enables the consortium of Awakn Via Amitis Ltd. to leverage its experience and partnership with the NHS to expand and scale the clinics business. He also expressed confidence in the consortium’s ability to expand and scale the clinic’s business, benefiting a broader range of patients in need of effective treatment options.

#2: Cybin

Toronto-based Cybin Inc. (NYSE: CYBN) announced the development of a scalable psychedelic facilitation training program called EMBARK^CT . This new program is an evolution of the existing EMBARK Training Program.

The EMBARK program, launched in 2021, provides foundational training for psychedelic facilitators to deliver skillful and ethical care in working with psychedelic therapeutics. EMBARK^CT aims to increase Cybin’s capacity to screen, qualify, train, and certify facilitators for future pivotal studies of its lead candidates, CYB003 and CYB004, potential treatments for major depressive disorder and generalized anxiety disorder, respectively.

Additionally, Cybin said it’s hoping to leverage the newly established codes by the American Medical Association (AMA) to attach its Embark Training Program to insurance reimbursement. The AMA recently introduced new Current Procedural Terminology (CPT) Category III codes that specifically address the need for continuous in-person monitoring and intervention during psychedelic medication therapy.

The implementation of these codes, which will become effective on January 1, 2024, is a crucial step toward standardizing psychedelic treatments and integrating them into mainstream medical practices. By establishing a standardized way to identify procedures and collecting data to support broader use and potential FDA approval, the AMA codes create a clearer path for insurance reimbursement for these emerging therapies.

With the development of EMBARK^CT and the support of the AMA’s CPT codes, Cybin is taking significant steps toward revolutionizing mental healthcare and expanding the accessibility and acceptance of psychedelic-based therapies.

Key Takeaways; Cannabis Sector

• TerrAscend obtained a $25 million loan; Bought 2 dispensaries in
• Canopy Growth is selling property and assets in bid to raise cash amid financial struggles.
• Cresco Labs and Columbia Care provided update on proposed merger: They’re struggling to secure approvals for deal.

Key Takeaways; Psychedelic Sector

• Awakn’s head of Ketamine assisted psychotherapy for addiction will make a presentation at the upcoming PsychSymposium 2023.
• Cybin trimmed losses in the financial results and secured $30 million investment for psychedelic drug trials.

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: TerrAscend

TerrAscend Corp. (OTC: TRSSF), a cannabis company based in Canada, recently obtained a $25 million commercial loan and acquired its third Maryland dispensary for $6.75 million. The loan, which is backed by Stearns Bank, carries an interest rate of 10.5% and will mature in December 2024.

Although TerrAscend didn’t say in the press release what the money would be used for, the company put $3 million cash in the acquisition of Hempaid LLC, which does business as Blue Ridge Wellness in the town of Parkville, Maryland. The acquisition was completed for $6.75 million, and the remaining $3.75 million will be paid in the form of a seller’s note.

The acquisition of Blue Ridge Wellness brought TerrAscend’s U.S. footprint to 36 dispensaries across several states. The company stated that it expects the acquisition to strengthen its balance sheet and drive revenue growth in Maryland, especially with the upcoming launch of recreational marijuana sales in the state.

In addition to the loan and acquisition, TerrAscend closed a second round of private placements worth $20.5 million. According to the company, the financing, along with the recent acquisitions, is aimed at qualifying the company for a proposed listing on the Toronto Stock Exchange, funding further acquisitions in Maryland, and boosting working capital. The private placements involved the sale of units and convertible debentures, with company insiders, including Executive Chairman Jason Wild, participating in the offering.

Furthermore, TerrAscend entered into a definitive agreement to acquire Herbiculture Inc., a medical dispensary in Burtonsville, Maryland, for $8.25 million. This acquisition brought TerrAscend’s total number of dispensaries in Maryland to four, the maximum allowed by state regulations. And with the upcoming launch of adult-use sales in Maryland, the company is confident that Herbiculture is well-positioned to achieve substantial sales and profit growth.

TerrAscend’s recent financing activities, acquisitions, and debt reduction efforts demonstrate the company’s strategic initiatives to expand its presence, drive revenue growth, and strengthen its financial position in the rapidly growing cannabis market.

#2: Canopy Growth

Canadian cannabis giant Canopy Growth Corp. (NASDAQ: CGC) recently announced the sale of one of its California facilities as part of its efforts to raise cash and address its significant debt burden and mounting losses.

Canopy Growth’s stock price has experienced a drastic decline of 81% this year, resulting in the company’s removal from the S&P/TSX index and a market capitalization that now stands at less than $280 million, significantly down from its previous multibillion-dollar valuation. As a result, analyst have expressed concerns about the company’s ability to recover from its losses and questioned the effectiveness of its aggressive U.S. expansion strategy in the absence of federal cannabis reform.

In the attempt to alleviate its financial woes, Canopy Growth has sold multiple properties, including a facility in Modesto, California, bringing its total income from asset sales to C$81 million since April 1. The company expects to generate an additional C$150 million in revenue through similar asset sales by September 30, aiming to improve its balance sheet and move toward profitability.

“Today’s announcement reflects our continued focus on strengthening Canopy Growth’s balance sheet and demonstrates the rapid execution of our transformation to an asset-light, North American-focused cannabis business on an accelerated path to profitability,” David Klein, CEO of Canopy Growth, said in a press release.

Canopy Growth’s financial struggles coincide with a broader restructuring effort. The company aims to achieve a net cost reduction of C$125 million by the end of the fiscal year and has implemented various measures, such as exiting cannabis flower cultivation at some facilities and consolidating cultivation in Ontario and British Columbia. Despite the challenges faced, Canopy Growth remains optimistic about its long-term prospects and aims to strengthen its balance sheet and liquidity through facility divestitures.

#3: Cresco Labs

The proposed multibillion-dollar megamerger between Chicago-based Cresco Labs Inc. (OTC: CRLBF) and Columbia Care Inc. (OTC: CCHWF) has hit a roadblock. On Friday, the companies announced that they have been unable to finalize the necessary divestitures to obtain regulatory approvals for their proposed megamerger. The companies had set a deadline of June 30 to meet the requirements specified in their arrangement agreement, but regulatory hurdles have caused delays.

In a joint statement, both companies stated that they are currently working together to determine the next course of action and they have promised to provide further updates in the near future.

Cresco Labs and Columbia Care’s struggle to secure regulatory approvals for their proposed merger represents a notable bump in the road for both companies. While the setback was anticipated to some extent, it poses challenges for their ambitions to become the largest legal cannabis operator in the United States. And as they work together to determine the next course of action, investors and industry watchers eagerly await further updates. In the meantime, Cresco Labs and Columbia Care will need to consider alternative growth strategies and address their financial concerns as they navigate the ever-evolving cannabis landscape.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), Head of Ketamine Assisted Psychotherapy for Addiction, Professor Celia Morgan, is set to be a distinguished speaker at this year’s highly anticipated PsychSymposium 2023, taking place on July 6th.

As a renowned expert in her field, Professor Morgan will share her invaluable insights and knowledge on the role of ketamine assisted psychotherapy in addiction treatment. This event promises to be a significant milestone in the advancement of addiction therapy and mental health care.

The PsychSymposium 2023 is a prestigious conference that brings together leading professionals, researchers, and practitioners in the field of psychology and psychiatry. It serves as a platform for sharing the latest scientific discoveries, evidence-based practices, and innovative approaches to addressing mental health challenges. With Professor Morgan’s expertise, her presentation is expected to be a highlight of the event.

#2: Cybin

Toronto-based Cybin Inc. (NYSE: CYBN) made significant strides in fiscal year 2023 financial results, ending March 31, with a notable reduction in losses.

The psychedelics company reported trimming its losses to C$47.5 million, a significant improvement from the C$67.6 million loss incurred in the previous financial year. This news comes as a beacon of hope for shareholders and investors as Cybin continues its journey in the promising field of psychedelic therapeutics.

In addition to cutting losses, Cybin announced a major milestone: the successful negotiation of a $30 million common share purchase agreement with Lincoln Park Capital Fund. According to the company, when combined with the C$16.6 million remaining in the company’s coffers at the end of March, this capital injection will provide a much-needed financial boost for the ongoing and future drug trials that involve psilocybin and dimethyltryptamine (DMT).

Cybin CEO, Doug Drysdale, said in a press release that he’s “encouraged” by the new guidelines released by the U.S. Food and Drug Administration on psychedelic drug approval processes, and said that the company has made “significant progress” over the past year on its two clinical treatment programs that are still in development.

 

“These guidelines also help remove regulatory uncertainty for investors and clinical trial sponsors. With these catalysts in our sights, we believe that we are moving ever closer to our goal of developing treatment options,” Drysdale said.

Key Takeaways; Cannabis Sector

• High Tide revenue rose, but the company still fell short of profitability.
• Aurora Cannabis experienced an increase in revenue; However, the company is facing significant cash expenditure.
• Acreage reduced its board size ahead of canopy deal.

Key Takeaways; Psychedelic Sector

• Awakn announced closing of the second tranche and upsizing of previously announced private placement.
• Numinus announced a partnership with MAPS to support therapist psychedelic experiential training.

In this weekly roundup, we review the key developments amongst major players in the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: High Tide

Canada-based cannabis company High Tide Inc. (NASDAQ: HITI) reported a significant increase in revenue for its second fiscal quarter, ending April 30. The company’s revenue reached an impressive $118.1 million, marking a 46% year-over-year growth from $81 million in the same quarter last year. Despite this positive development, High Tide still fell short of profitability, recording a net loss of $1.6 million.

According to the company, the revenue growth can be attributed to a combination of cost reductions and sales increases. High Tide has been working on improving its operational efficiency, resulting in a reduction in losses compared to the previous year. The company’s losses decreased from $8.2 million in the second quarter of the previous year to $1.6 million in the current quarter.

However, High Tide also faced negative cash flow of minus $1.9 million during the quarter. This indicates that the company is still grappling with financial challenges despite its revenue growth. To address this, High Tide stated that it aims to become cash-flow positive by the end of the calendar year. According to the company, they plan to expand their retail footprint and open more storefronts across Canada, with a target of capturing 15% of the market.

High Tide’s CEO, Raj Grover, expressed optimism about the company’s prospects; “Our bricks-and-mortar margins have increased by approximately 1% every quarter for the last five quarters, and we feel there is further opportunity to increase margins in most markets where we operate,” Raj Grover said in a press release. “We believe there remains a significant opportunity to continue moving towards our goal of capturing 15% of this market.”

While High Tide plans to open more stores in the second half of 2023, the company acknowledges that the overall growth will be relatively muted compared to its historical pace. It expects the challenging market conditions and expiring leases to contribute to the shakeout in the Canadian marijuana industry.

#2: Aurora Cannabis

Aurora Cannabis Inc. (NASDAQ: ACB), a leading cannabis company, recently reported its financial results for the third quarter and fiscal year 2023. While the company saw a rise in revenues, its cash burn remains a concern. Aurora’s total net revenue for the quarter reached $64 million, surpassing the previous quarter’s revenue of $61.7 million and the previous year’s revenue of $50.4 million. The increase was attributed to the contribution of $10.8 million from Bevo, which was acquired in August 2022.

Despite the revenue growth, Aurora continues to experience significant net losses. The company reported a quarterly loss of $87 million, compared to $67.2 million in the second quarter. Aurora attributed the jump in losses to an increase of $60 million in other expenses driven by changes in fair value on derivative investments.

Aurora reassured shareholders about its balance sheet, stating that it has $230 million in cash and cash equivalents and approximately $80 million outstanding in convertible debentures. However, the company’s cash position has decreased significantly, with the cash at the end of June 2022 amounting to $437 million. Over the past nine months, Aurora has burned through more than $200 million, causing its working capital to plunge by 59% since the third quarter of 2022.

Despite the cash burn, Aurora believes its current cash on hand is sufficient to fund operations until it becomes cash flow positive. We are proud to have delivered our second sequential quarter of positive Adjusted EBITDA in Q3 2023, demonstrating our commitment to financial discipline,” CEO Miguel Martin said. “Over the last three years, our ongoing business transformation initiatives have delivered ~$400 million in annualized cost savings that have significantly reduced cash used in operating activities.”

Martin continued, “In fact, cash use continues to improve as evidenced by the reduction from $35.5 million in Q2 2023 to $15.1 million in Q3 2023, excluding working capital. This impressive improvement is the launching point for the initiatives that will support our drive to our new financial target of positive free cash flow by end of calendar year 2024.”

#3: Acreage Holdings

Acreage Holdings, Inc. (OTC: ACRHF), a leading cannabis operator in the United States, announced further changes to its leadership and oversight as it prepares for an anticipated acquisition by Canopy Growth Corporation (NASDAQ: CGC). The company said that it had implemented a streamlined governance structure in order to align with its near-term priorities and ensure a smooth transition.

These changes reflect Acreage’s commitment to positioning itself for success as it integrates with Canopy USA, a subsidiary of Canopy Growth Corporation. The company aims to leverage the combined expertise and resources of both organizations to capitalize on the significant opportunities presented by the U.S. cannabis market, particularly in anticipation of potential federal permissibility.

Dennis Curran, the newly appointed Chief Executive Officer of Acreage, expressed his satisfaction with the company’s progress and its upcoming transition into Canopy USA. He acknowledged the support and strategic guidance provided by the Board, highlighting their instrumental role in Acreage’s journey. Curran also expressed gratitude for their contributions and wished them well in their future endeavors.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), a clinical-stage biotechnology company focused on developing therapeutics to treat addiction, announced the closing of the second tranche and an upsizing of its previously announced non-brokered private placement financing.

The initial private placement financing was announced on April 26, 2023, with the aim of raising gross proceeds of up to $3,000,000 through the issuance of up to 6,521,739 units in the capital of the company at a price of CAD$0.46 per unit. The first tranche of the offering closed on a positive note, raising $1,100,715 by issuing 2,392,858 units.

Recently, Awakn successfully closed the second tranche of the offering, issuing 1,884,204 units and generating gross proceeds of $866,733 for this tranche. In total, the company has raised $1,967,448 from the private placement to date. Encouraged by recent developments, Awakn decided to increase the size of the offering from up to $3,000,000 to up to $4,000,000, maintaining the price of $0.46 per unit.

Each unit offered consists of one common share in the company and three quarters (0.75) of one whole common share purchase warrant. The warrants entitle the holders to acquire one common share at a price of $0.63 per share within a period of five years from the date of issuance. The company said that the gross proceeds generated from the offering will be used to fund the company’s general working capital.

#2: Numinus Wellness

Numinus Wellness Inc. (OTC: NUMIF), a mental health care company focused on advancing innovative treatments and evidence-based investigational psychedelic-assisted therapies, recently announced a significant partnership with the Multidisciplinary Association for Psychedelic Studies (MAPS). The collaboration aims to support psychedelic experiential opportunities for practitioners as part of a clinical study. The partnership marks an important step forward in the field of psychedelic-assisted therapy and demonstrates the commitment of both organizations to driving greater understanding and accessibility to these therapies.

As part of the collaboration, Numinus has submitted a Clinical Trial Application (CTA) to Health Canada. If approved, the CTA will enable Numinus to offer MDMA-assisted therapy experiential opportunities exclusively through its programs. The experiential opportunity will be made available to practitioners as part of Numinus’ psychedelic-assisted therapy education and training program. It is noteworthy that this is the first permission granted by MAPS to use its protocol as part of such an experiential opportunity.

The Clinical Trial Application has been submitted by Numinus through its subsidiary, Numinus Wellness Research Inc. Should the application be approved by Health Canada, the clinical trial will provide practitioners interested in MDMA-assisted therapy with the opportunity to experience and observe MDMA sessions. This firsthand experience will further their understanding of psychedelic-assisted therapy, contributing to their professional development.

 

Key Takeaways; Cannabis Sector

• Tilray plummeted 21% on Friday, after announcing a registered offering of $150 million worth of convertible notes.
• SNDL reported growth in sales over last year as acquisitions helped build the company.
• Ayr Wellness revenues rose 3% sequentially in the first quarter.
• Curaleaf first quarter of 2023 revenue exceeded expectations.

Key Takeaways; Psychedelic Sector

• Awakn is working on a groundbreaking ketamine study that will help reduce gambling addictions.
• Seelos Therapeutics provided critical clinical update and financial reports in the first quarter 2023 financial release.

Unlike the prior three quarters, where we started strongly and ended weakly, the cannabis sector isn’t doing well in Q2. April was a down month, and May has been too. One significant contributing factor to this turmoil has been the continued interest rate hikes by the Federal Reserves, which have not only affected the cannabis sector but also impacted the broader markets. However, amidst the adversity, there remains a glimmer of hope and a sense of optimism fueled by the ongoing wave of decriminalization and legalization efforts taking place across various states and countries.

In this weekly roundup, we delve into the first-quarter earnings reports of prominent cannabis companies and provide a comprehensive overview of the key and noteworthy developments amongst major players in the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: Tilray

On Friday, Tilray Brands, Inc. (NASDAQ: TLRY) experienced a significant drop in its stock price, declining by over 21%. This decline followed the announcement of another round of capital raising by the company. While the broader market enjoyed gains on Friday, Tilray’s stock faced downward pressure due to concerns about its ongoing need for funding and potential dilution of existing shares.

In the new round of capital raising, Tilray launched a registered offering of $150 million worth of convertible senior notes. The notes have a maturity date of June 15, 2027, and carry an annual interest rate of 5.2%. Interest on the notes will be paid semi-annually.

Under the terms of the agreement, the notes are convertible into Tilray common shares at any time, with an initial conversion rate of approximately 376.6 shares per $1,000 principal amount, which translates to a conversion price of approximately $2.66 per share. Tilray also retains the option to redeem the notes for cash after June 20, 2025.

Additionally, the underwriters of Tilray’s note issuance were granted a 30-day option to purchase up to $22.5 million worth of the notes.

According to the company, they intend to utilize the proceeds from this offering primarily to redeem previously issued convertible senior notes, with a portion allocated for general corporate purposes, although specific details were not provided by Tilray.

This move follows Tilray’s ongoing struggle with weak cash flow and consistent losses. As a result, there’s a growing concern regarding the sustainability of Tilray’s financial position and its ability to achieve profitability. Irrespective of this, investors will continue to monitor Tilray’s performance, seeking signs of improved financial stability and a sustainable path towards profitability.

#2: SNDL

SNDL Inc. (NASDAQ: SNDL), a prominent player in the cannabis industry, recently reported a substantial increase in sales for the first quarter of the year. Although there was a sequential decrease in net revenue compared to the previous quarter, the company experienced significant growth when compared to the same period last year. SNDL attributed this success to strategic acquisitions, including those of Alcanna, Valens, and Zenabis.  According to the company, these acquisitions have not only bolstered SNDL’s revenue but have also positioned the company as one of the largest adult-use cannabis manufacturers and retailers in Canada.

The financial results for the first quarter ending March 31 indicated that SNDL’s net revenue fell to C$202.5 million, compared to C$240.4 million in the previous quarter. However, this was a remarkable increase from the C$17.6 million reported in the first quarter of the previous year. SNDL explained that the decrease in revenue compared to the fourth quarter of 2022 was primarily due to seasonal trends in the liquor retail segment.

Furthermore, SNDL managed to reduce its net losses to C$36.1 million for the first quarter, a significant improvement from the C$161.6 million net loss in the fourth quarter of 2022 and the C$38 million net loss in the first quarter of 2022. SNDL attributed this positive trend to various factors, including the integration of Valens, which is progressing well, and the identification of new revenue streams and cost reduction opportunities.

In terms of cannabis expansion, SNDL reported gross revenue of C$67.4 million from the cannabis retail segment in the first quarter of 2023. This represents a modest decline compared to the fourth quarter of 2022 but a substantial increase from the first quarter of 2022.

#3: Ayr Wellness

Ayr Wellness Inc. (OTC: AYRWF), a leading cannabis company, recently announced its financial results for the first quarter ending March 31, revealing a significant loss stemming from its exit from the Arizona business. While the company experienced overall revenue growth and exceeded expectations in certain areas, the substantial loss incurred highlights the complexities and challenges of operating in the cannabis industry.

Despite growing revenue by 18% to $117 million compared to the previous year’s $99.5 million, Ayr Wellness faced a staggering net loss of $197 million for the quarter. The loss was primarily attributed to discontinued operations related to the sale of the Arizona business, amounting to $185 million, net of taxes. Operating losses remained flat at $21 million, indicating ongoing challenges within the company’s operations.

The decision to exit the Arizona business was a strategic move by Ayr Wellness, demonstrating the company’s commitment to optimizing its operations. However, the financial implications of this decision were significant, resulting in a substantial loss for the quarter. It is worth noting that the company’s revenue still managed to surpass expectations, growing by 3% sequentially from the previous quarter’s $114 million.

Despite the substantial loss incurred, Ayr Wellness remains optimistic about its overall performance. David Goubert, the president and CEO of Ayr, highlighted the company’s achievements, including the growth in revenue by 18% year-over-year and a significant expansion of adjusted EBITDA margin. He also emphasized the generation of positive operating cash flow for the third consecutive quarter.

#4: Curaleaf

Curaleaf Holdings, Inc. (OTC: CURLF), a prominent international provider of consumer products in the cannabis industry, recently reported impressive year-over-year growth in net revenue for the first quarter of 2023.

Curaleaf’s net revenue for the first quarter of 2023 reached $336.5 million, reflecting a $40.5 million increase compared to the same period in 2022. The company stated that the primary drivers behind this growth were the continued expansion of retail stores and a dedicated emphasis on research and development. Notably, the company surpassed revenue expectations by nearly $5 million, showcasing its ability to deliver strong financial results.

Despite reporting a net loss attributable to the company of $54.4 million, or a net loss per share of $0.07, the company’s adjusted EBITDA stood at $73.2 million, equivalent to 22% of revenue, indicating a positive trend toward profitability.

Curaleaf also revised its full-year outlook, projecting a robust growth trajectory for 2024, 2025, and 2026. The company said that this expectation is based on the acceleration of cannabis adoption throughout Europe. Furthermore, the company also stated that it’s maintaining a strong cash position, with $116 million on its balance sheet at the end of the quarter. Additionally, it reported that it had generated $31 million in operating cash flow from continuing operations.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), in collaboration with the University of Exeter, is embarking on a groundbreaking research project to investigate the potential of ketamine in reducing the gambling problem.

The study is being led by Professor Celia Morgan, who is a Professor of Psychopharmacology at the University of Exeter, and the Head of Ketamine Assisted Psychotherapy for Addiction at Awakn.

The study draws inspiration from Project Kestrel, Awakn’s previous successful research, which explored ketamine’s impact on alcohol misuse. By re-writing maladaptive reward memories linked to substance abuse, ketamine has shown promise in breaking the cycle of addiction. In the context of gambling addiction, the researchers hypothesize that ketamine may weaken the memory trace associated with impulsive gambling behavior, providing individuals with a greater chance of breaking free from the cycle of addiction.

Awakn’s collaboration with the University of Exeter to investigate the potential of ketamine in reducing the rising gambling problem represents a groundbreaking research endeavor. And as the study progresses, its outcomes could potentially revolutionize the treatment landscape for individuals struggling with gambling addictions, leading to a brighter future for those in need of support and intervention.

#2: Seelos Therapeutics

Seelos Therapeutics, Inc. (NASDAQ: SEEL), a clinical-stage biopharmaceutical company focused on developing therapies for central nervous system disorders and rare diseases, recently provided a clinical update and reported its financial results for the first quarter of 2023. The company is working on various therapeutic programs targeting different diseases, including MDD, ALS, Parkinson’s disease, and neurodegenerative disorders like Huntington’s disease.

The CEO of Seelos, Raj Mehra, highlighted the significance of 2023 for the company, stating that it is the most important year in Seelos’ history thus far. He mentioned that the registration-directed study of their intranasal ketamine program, SLS-002, will be completed by the end of June 2023, with top-line data expected to be released in the third quarter of 2023. The company believes that if successful, this therapy could provide help to a significant number of people globally who experience suicidal ideation.

Seelos also provided updates on other programs. The enrollment for the SLS-005 study in ALS has been completed, and the company expects to release top-line Phase II/III data in late 2023. Additionally, Seelos announced the initiation of their first internally created gene therapy program, SLS-009, which focuses on the one-time treatment of neurodegenerative disorders such as Huntington’s disease.

Regarding the financial results for the first quarter of 2023, Seelos reported a net revenue of $808,000, primarily from grant revenue earned through their Expanded Access Program. Research and development expenses decreased compared to the same period in the previous year, mainly due to the completion of enrollment in the SLS-005 study. General and administrative expenses slightly increased. Other expenses resulted in a loss due to the issuance of common stock and warrants in a registered direct offering.

Additionally, Seelos ended the first quarter with $14.1 million in cash and cash equivalents, which represented a decrease compared to the previous quarter.

Key Takeaways; Cannabis Sector

• SNDL reported growth in sales over last year as acquisitions helped build the company.
• Ayr Wellness revenues rose 3% sequentially in the first quarter.
• Curaleaf first quarter of 2023 revenue exceeded expectations.
• Glass House Brands reported first quarter financial results and a revised revenue projection for the year 2023.
• GrowGeneration announced a partnership with Bridgetown Mushrooms; the company also reported first quarter 2023 financial results.

Key Takeaways; Psychedelic Sector

• Seelos Therapeutics provided critical clinical update and financial reports in the first quarter 2023 financial release.
• atai reported first quarter 2023 financial results and announced key updates.
• Awakn reported Q4 2023 and annual results.

The cannabis industry has been navigating through challenging waters in recent times, grappling with various obstacles that have left both operators and investors feeling the pressure. One significant contributing factor to this turmoil has been the continued interest rate hikes by the Federal Reserves, which have not only affected the cannabis sector but also impacted the broader markets. However, amidst the adversity, there remains a glimmer of hope and a sense of optimism fueled by the ongoing wave of decriminalization and legalization efforts taking place across various states and countries.

In this weekly roundup, we delve into the first-quarter earnings reports of prominent cannabis companies and provide a comprehensive overview of the key and noteworthy developments amongst major players in the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: SNDL

SNDL Inc. (NASDAQ: SNDL), a prominent player in the cannabis industry, recently reported a substantial increase in sales for the first quarter of the year. Although there was a sequential decrease in net revenue compared to the previous quarter, the company experienced significant growth when compared to the same period last year. SNDL attributed this success to strategic acquisitions, including those of Alcanna, Valens, and Zenabis.  According to the company, these acquisitions have not only bolstered SNDL’s revenue but have also positioned the company as one of the largest adult-use cannabis manufacturers and retailers in Canada.

The financial results for the first quarter ending March 31 indicated that SNDL’s net revenue fell to C$202.5 million, compared to C$240.4 million in the previous quarter. However, this was a remarkable increase from the C$17.6 million reported in the first quarter of the previous year. SNDL explained that the decrease in revenue compared to the fourth quarter of 2022 was primarily due to seasonal trends in the liquor retail segment.

Furthermore, SNDL managed to reduce its net losses to C$36.1 million for the first quarter, a significant improvement from the C$161.6 million net loss in the fourth quarter of 2022 and the C$38 million net loss in the first quarter of 2022. SNDL attributed this positive trend to various factors, including the integration of Valens, which is progressing well, and the identification of new revenue streams and cost reduction opportunities.

In terms of cannabis expansion, SNDL reported gross revenue of C$67.4 million from the cannabis retail segment in the first quarter of 2023. This represents a modest decline compared to the fourth quarter of 2022 but a substantial increase from the first quarter of 2022.

#2: Ayr Wellness

Ayr Wellness Inc. (OTC: AYRWF), a leading cannabis company, recently announced its financial results for the first quarter ending March 31, revealing a significant loss stemming from its exit from the Arizona business. While the company experienced overall revenue growth and exceeded expectations in certain areas, the substantial loss incurred highlights the complexities and challenges of operating in the cannabis industry.

Despite growing revenue by 18% to $117 million compared to the previous year’s $99.5 million, Ayr Wellness faced a staggering net loss of $197 million for the quarter. The loss was primarily attributed to discontinued operations related to the sale of the Arizona business, amounting to $185 million, net of taxes. Operating losses remained flat at $21 million, indicating ongoing challenges within the company’s operations.

The decision to exit the Arizona business was a strategic move by Ayr Wellness, demonstrating the company’s commitment to optimizing its operations. However, the financial implications of this decision were significant, resulting in a substantial loss for the quarter. It is worth noting that the company’s revenue still managed to surpass expectations, growing by 3% sequentially from the previous quarter’s $114 million.

Despite the substantial loss incurred, Ayr Wellness remains optimistic about its overall performance. David Goubert, the president and CEO of Ayr, highlighted the company’s achievements, including the growth in revenue by 18% year-over-year and a significant expansion of adjusted EBITDA margin. He also emphasized the generation of positive operating cash flow for the third consecutive quarter.

#3: Curaleaf

Curaleaf Holdings, Inc. (OTC: CURLF), a prominent international provider of consumer products in the cannabis industry, recently reported impressive year-over-year growth in net revenue for the first quarter of 2023.

Curaleaf’s net revenue for the first quarter of 2023 reached $336.5 million, reflecting a $40.5 million increase compared to the same period in 2022. The company stated that the primary drivers behind this growth were the continued expansion of retail stores and a dedicated emphasis on research and development. Notably, the company surpassed revenue expectations by nearly $5 million, showcasing its ability to deliver strong financial results.

Despite reporting a net loss attributable to the company of $54.4 million, or a net loss per share of $0.07, the company’s adjusted EBITDA stood at $73.2 million, equivalent to 22% of revenue, indicating a positive trend toward profitability.

Curaleaf also revised its full-year outlook, projecting a robust growth trajectory for 2024, 2025, and 2026. The company said that this expectation is based on the acceleration of cannabis adoption throughout Europe. Furthermore, the company also stated that it’s maintaining a strong cash position, with $116 million on its balance sheet at the end of the quarter. Additionally, it reported that it had generated $31 million in operating cash flow from continuing operations.

#4: Glass House Brands

Glass House Brands Inc. (OTC: GLASF), a leading player in the cannabis industry, recently announced its first quarter 2023 financial results and a revised revenue projection for the year 2023. Despite reporting a loss of nearly $39 million in the first quarter of 2023, Glass House stated that it remains optimistic about its prospects. The California-based company announced that it expects significant growth in both revenues and profitability, primarily driven by the rebounding wholesale market and strategic business decisions.

According to the released financial statements, Glass House Brands experienced a substantial year-over-year increase in revenues, reaching $29 million, representing a 108% growth from the previous year. However, the company also reported losses of nearly $39 million, a significant increase of 195% compared to the same period last year. The company stated that the losses were further exacerbated by a non-cash impairment charge of $23 million related to Plus Products Holdings acquisition.

Despite the losses and challenges faced in the first quarter, Glass House’s leadership maintains an optimistic outlook. CEO Kyle Kazan emphasized that their performance in Q1 demonstrates the competitive advantages of their business model, which they anticipate will lead to substantial growth in revenues and profitability in the future.

In addition to announcing the first quarter results, Glass House also revised its projections for consumer-packaged goods revenues and retail revenues. Consumer packaged goods revenues were adjusted downward to $20 million from the initial estimate of $25 million. This adjustment was attributed to the challenging retail landscape. Similarly, retail revenues from the company’s four stores were revised downward to $40 million from the initial projection of $50 million. According to the company, these adjustments were primarily driven by intense competition in the marketplace and the new stores not meeting internal expectations.

#5: GrowGeneration

GrowGeneration Corp. (NASDAQ: GRWG) and GrowLife, Inc. (OTC: PHOT) announced a multi-year partnership to develop and sell mycology supplies, entering the rapidly expanding mushroom farming industry. The partnership will begin in the Pacific Northwest and other Western states, with plans to expand nationwide.

Under the partnership, GrowGeneration will be the exclusive distributor of Bridgetown Mushrooms’ mycology products, including substrates, soils, and nutrients. This collaboration positions GrowGeneration to take advantage of the growing mycology industry and offers a complete line of mycology products to customers interested in commercial and personal mushroom farming. And with the global mushroom market expected to surpass $115 billion by 2030, the United States presents a major opportunity for mushroom companies.

In addition to the partnership announcement, GrowGeneration recently reported its financial results for the first quarter of 2023. The company generated net revenue of $56.8 million, a sequential improvement from the prior quarter, and a gross margin of 28.7%. However, comparable store sales decreased by 36.6% compared to the previous year. The company’s net loss for the quarter was $6.1 million, and the adjusted EBITDA loss was $1.8 million.

Despite the challenges, GrowGeneration is optimistic about its future growth and plans to invest in building and growing its private brands, executing strategic acquisitions, and focusing on profitable growth. Also, the company believes it is well-positioned for growth in the mushroom industry and aims to improve its margins through cost-cutting initiatives.

Top Psychedelic Companies for Week

#1: Seelos Therapeutics

Seelos Therapeutics, Inc. (NASDAQ: SEEL), a clinical-stage biopharmaceutical company focused on developing therapies for central nervous system disorders and rare diseases, recently provided a clinical update and reported its financial results for the first quarter of 2023. The company is working on various therapeutic programs targeting different diseases, including MDD, ALS, Parkinson’s disease, and neurodegenerative disorders like Huntington’s disease.

The CEO of Seelos, Raj Mehra, highlighted the significance of 2023 for the company, stating that it is the most important year in Seelos’ history thus far. He mentioned that the registration-directed study of their intranasal ketamine program, SLS-002, will be completed by the end of June 2023, with top-line data expected to be released in the third quarter of 2023. The company believes that if successful, this therapy could provide help to a significant number of people globally who experience suicidal ideation.

Seelos also provided updates on other programs. The enrollment for the SLS-005 study in ALS has been completed, and the company expects to release top-line Phase II/III data in late 2023. Additionally, Seelos announced the initiation of their first internally created gene therapy program, SLS-009, which focuses on the one-time treatment of neurodegenerative disorders such as Huntington’s disease.

Regarding the financial results for the first quarter of 2023, Seelos reported a net revenue of $808,000, primarily from grant revenue earned through their Expanded Access Program. Research and development expenses decreased compared to the same period in the previous year, mainly due to the completion of enrollment in the SLS-005 study. General and administrative expenses slightly increased. Other expenses resulted in a loss due to the issuance of common stock and warrants in a registered direct offering.

Additionally, Seelos ended the first quarter with $14.1 million in cash and cash equivalents, which represented a decrease compared to the previous quarter.

 

#2: Atai

Atai Life Sciences N.V. (NASDAQ: ATAI), a clinical-stage biopharmaceutical company focused on revolutionizing the treatment of mental health disorders, recently released its financial results for the first quarter of 2023 and provided updates on its pipeline. The report indicated that the company continues to make progress in its mission to improve the lives of individuals suffering from mental health disorders.

One significant achievement in the first quarter was the dosing of the first patient with RL-007 in a Phase 2b study for Cognitive Impairment Associated with Schizophrenia (CIAS). RL-007 is a pro-cognitive neuromodulator that aims to address the cognitive impairment commonly associated with schizophrenia.

Another promising development was the presentation of pharmacodynamic (PD) data from the Phase 1 study of GRX-917 at the Society for Biological Psychiatry Annual Meeting. GRX-917 is a deuterated etifoxine being investigated for the treatment of anxiety disorders.

Atai is also making progress with VLS-01, a potential treatment for treatment-resistant depression (TRD) using N, N-dimethyltryptamine (DMT). The company completed Parts 1 and 2 of a Phase 1 study, which evaluated the safety, tolerability, pharmacokinetics, and pharmacodynamics of VLS-01. The study showed that VLS-01, administered intravenously and using an oral transmucosal film formulation, was well-tolerated and produced dose-dependent increases in exposure.

Financially, atai Life Sciences reported a cash position of $249.9 million as of March 31, 2023, which, together with committed term loan funding, is expected to fund operations into the first half of 2026. The company’s research and development expenses increased compared to the same period last year, primarily due to advancement in R&D programs and increased personnel costs. However, general and administrative expenses decreased, driven by a decrease in taxes, stock-based compensation, accounting and legal fees, and personnel-related costs.

#3: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), a biotechnology company focused on developing therapeutics to treat addiction, recently reported its financial results and business highlights for the fourth quarter of 2023 and the entire fiscal year. The financial report shown that the company achieved remarkable progress in various aspects of its operations and had also achieved significant growth in revenue.

During the fiscal year, Awakn made substantial advancements, particularly in its lead program, AWKN-P001, which targets Severe Alcohol Use Disorder (AUD). The company has successfully established the safety and efficacy of its therapeutics and is now progressing AWKN-P001 into phase III clinical trials. Notably, most of the costs for this trial will be covered by the UK state, resulting in a relatively low cost of $1.25 million for Awakn.

Additionally, Awakn stated that it had partnered with a European pharmaceutical company to explore the repurposing of (S)-ketamine as a licensed treatment for addiction. The company is also collaborating with Catalent on a feasibility study of MDMA, utilizing Catalent’s Zydis Oral Disintegrating Tablet (ODT) technology, with the aim of shortening therapy sessions.

As for the financial results, Awakn’s clinics experienced significant revenue growth, achieving a remarkable 534% increase in revenue year on year. According to the company, this growth reflects the effectiveness of the its therapies and the increasing demand for its services. Looking ahead, Awakn aims to further increase its revenue from clinics and partnerships in the current fiscal year.

 

 

Key Takeaways; Cannabis Sector

• Tilray Brands made waves by ranking on the Brewers Association list of top producing craft brewers in the United States.
• WM Technology’s Weedmaps announced a marketing campaign with the launch of “20 Days of Deals” during the 420 holidays.
• ScottsMiracle-Gro announced timing of Q2 2023 financial results and conference call.

Key Takeaways; Psychedelic Sector

• Awakn signed a collaboration agreement with University of Exeter for upcoming Phase III Trial, which will be the largest ketamine-assisted psychological therapy clinical trial to date.

The cannabis industry has been facing tough times lately, with both operators and investors feeling the pressure. The cannabis stock index saw a 12.5% decline in Q1 of 2023, followed by a further drop of 1.9% last week; this puts the index down 15.9% for the year. Although the current situation may seem dire, experts predict that the cannabis industry will eventually make a resurgence but will take time. In this weekly round-up, we will take a closer look at the latest news and developments in the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: Tilray Brands

Tilray Brands, Inc. (NASDAQ: TLRY), a top-tier global company in the cannabis-lifestyle and consumer packaged goods industry, recently announced that its division dedicated to U.S. beer had been ranked #9 in the Brewers Association’s 2022 annual report of the top 50 craft brewing companies in the United States.

The company stated that its U.S. Beer division has significant potential for growth, and it remains committed to providing premium-quality products that appeal to consumers while expanding its distribution network into untapped markets and grow its leading portfolio of diverse brands that resonate with adult consumers.

The announcement of Tilray’s ranking on the Brewers Association’s list of top 50 craft brewing companies in the United States followed the release of financial results for the third fiscal quarter ending on February 28, 2023, whereby the company announced $145.6 million in net revenue, and a positive adjusted EBITDA, marking the 16th consecutive quarter of profitability.

In addition to announcing the financial results, Tilray also announced that it had entered into a definitive agreement to acquire HEXO Corp. (NASDAQ: HEXO) for an aggregate purchase price of approximately $56 million, which will position the company in an excellent position for continued growth and market leadership in Canada, which is the largest federally legal cannabis market in the world. The acquisition is expected to close in June 2023, subject to customary and negotiated closing conditions.

#2: WM Technology

WM Technology, Inc. (NASDAQ: MAPS), operator of Weedmaps, which is the leading online cannabis marketplace for consumers, recently launched its “Power of Weed” marketing campaign by launching ’20 Days of Deals’ during the 420 holiday.

As part of the ‘Power of Weed’ campaign, Weedmaps plans to facilitate local market events throughout April and produced in-market pop-up celebrations for 420, which includes branded merchandise giveaways and prizes for consumers. The company also announced that the deal was expected to run from Monday, April 10^th, to Sunday, April 30th.

Weedmaps stated that the inspiration for the company’s focus on deals was derived from nearly 15 years of first-party consumer data and research, which uncovered that 41% of cannabis consumers exclusively buy cannabis using a deal or discount. Additionally, the research also found out that 67% of consumers reported that finding dispensaries with the best deals is important when shopping for cannabis.

Randa McMinn, Chief Marketing Officer at Weedmaps, said, “While we celebrate the plant every day, 420 is a celebration in and of itself. We want our campaign to expand that shared sentiment throughout April and for our online marketplace to be the destination for consumers to take advantage of the best deals in their area for 420.”

#3: ScottsMiracle-Gro

The Scotts Miracle-Gro Company (NYSE: SMG), a leading lawn and garden care company, announced the timing of its second-quarter earnings report.  According to the company, the report will be released on May 4, 2023, before the market opens.

Additionally, the company stated that the earnings call will be held on the same day at 9 a.m. ET, during which the senior management team will discuss the financial results and provide insights into the company’s future outlook.

Recently, ScottsMiracle-Gro announced its update on the fiscal 2023 second quarter. During this update, the company stated that it expects to achieve a net leverage ratio below the credit facility covenant of 6.5 times, with the final Q2 net leverage ranging from 6.0. According to, ScottsMiracle-Gro, this improvement in the overall financial position is attributed to the company’s disciplined approach to cost control, focus on improved efficiencies, and initiatives to engage consumers early in the lawn and garden season.

ScottsMiracle-Gro Chairman and CEO, Jim Hagedorn, expressed his pride in the company’s accomplishments this fiscal year and the positive direction it is heading. He also expressed his gratitude to all those involved, including associates, the board of directors, banks, and retail partners.

In addition, ScottsMiracle-Gro also announced the appointment of Nate Baxter as Executive Vice President of Technology & Operations. Hagedorn stated that Baxter’s addition to the company’s executive team reflects the company’s effort to strengthen the team with next-generation leaders capable of making an immediate impact.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) announced that it had signed a collaboration agreement with the University of Exeter to conduct a Phase III clinical trial to assess the effectiveness of ketamine-assisted therapy for the treatment of severe Alcohol Use Disorder (AUD). According to the company, this will be the largest ketamine-assisted psychological therapy clinical trial to date and the only Phase III psychedelic clinical trial to receive government funding.

Awakn also stated that the trial will be a two-armed randomized placebo-controlled clinical trial with 280 participants, which will be delivered in ten UK National Health Service sites. The company also announced that it will contribute GBP £800,000 towards the costs of the trial, with the National Institute for Health and Care Research (NIHR), the Medical Research Council (MRC), and the University of Exeter contributing the balance of the costs.

The trial follows on from the impressive results of the Phase II a/b trial announced in January 2022, where participants experienced on average 86% abstinence at six-months post-treatment, versus 2% pre-trial. If the results of the Phase III trial are positive, Awakn plans to apply for marketing authorization for ketamine-assisted therapy to treat severe AUD.

Awakn CEO, Anthony Tennyson, expressed delight at the agreement, noting that the collaboration with the University of Exeter gives a clear roadmap for the Phase III trial. He added that the University of Exeter is a world-leading research institute and a partner that Awakn is happy to work with. Tennyson further stated that Awakn shares the same vision as the University of Exeter of providing a new, more effective treatment for AUD to the millions of people who are in desperate need of it.

 

Key Takeaways; Cannabis Sector

• Hydrofarm sales are still declining, despite improved revenue projections.
• Agrify announced a modification to their credit agreement with Bridge Bank.
• Trulieve announced fourth-quarter results and record full-year revenue exceeding $1.2 billion for 2022.
• Village Farms sales slightly decreased in the fourth quarter.

Key Takeaways; Psychedelic Sector

• Awakn broadened the geographic reach and scope of its licensing partnership business with the signing of its first licensing partnership deal in Europe.
• Seelos Therapeutics announced a registered direct offering of shares of common stock and warrants to purchase shares of common stock.

It was a terrifying week after the biggest bank failure since 2008 was announced on Friday, and the upcoming week is anticipated to witness further drama around the fall of SVB Financial Group (NASDAQ: SIVB) and its ramifications for the banking industry and venture capital ecosystem. It was a challenging week for cannabis operators as well, with a number of companies highlighting the sector’s existing problems through their dismal financial performance.

Below is a review of the companies that dominated the news in the cannabis and psychedelic sectors throughout the course of the previous week.

Top Marijuana Companies for Week

#1: Hydrofarm

Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) released its financial results for the fourth quarter and full year ended December 31, 2022, after the market closed on Thursday; these figures showed a sharp decline in sales. In comparison to the same period last year, net sales for the fourth quarter fell to $61.5 million from $110.4 million.

According to Hydrofarm, the decline was caused by a decrease in sales volume primarily due to the industry recession, a 0.9% decline in price and product mix mostly due to the sell-through of discounted lighting products, and a 0.5% decline as a result of unfavorable currency exchange rates.

In comparison to the fourth quarter of previous year, when there was a net loss of $11.0 million, this quarter’s net loss was $35.3 million. As a result, the company experienced a net loss of 57.4% of net sales, or $0.78 per diluted share. Despite the deficit, the company’s revenue during the previous four quarters twice exceeded consensus analyst estimates.

Bill Toler, Chairman and CEO of Hydrofarm, said; “While the current operating environment remains challenging, I am encouraged that we finished 2022 with our net sales coming in at the upper end of our previously provided outlook and that we generated positive Free Cash Flow for the third quarter in a row. We have experienced sales stabilization over the last several months and are seeing some positive indicators that the industry is moving closer to a rebound. I am pleased with the many actions behind the restructuring initiative and related actions that our team has launched to right-size our business and become a leaner, more profitable company. We remain confident in the long-term strength of our business, as our disciplined approach to working capital and restructuring actions initiated in 2022 have put us in a healthy position heading into 2023 and beyond.”

#2: Agrify

Agrify Corporation (NASDAQ: AGFY), a leading developer of indoor agriculture technology and solutions, announced an agreement to modify its credit facility with Bridge Bank, a division of Western Alliance Bank.

The credit facility was originally established in February 2021 and had a total commitment of $18 million. The modification allows Agrify to increase the size of the facility to $30 million and provides for a more flexible repayment schedule. The agreement also allows for Agrify to draw down on the facility in multiple tranches as it requires funding for its growth initiatives.

According to Agrify, the modified credit facility provides the company with the ability to expand its operations and invest in research and development to create innovative indoor agriculture solutions. With the increased capital, Agrify will be able to enhance its product offerings and services to meet the growing demand for indoor agriculture solutions in various markets, including cannabis, leafy greens, and specialty crops.

#3: Trulieve

Trulieve Cannabis Corp. (OTC: TCNNF), one of the leading medical cannabis companies in the United States, recently reported its fourth-quarter earnings and full-year results for the year 2022. The results showed that the company achieved a record-breaking revenue of $1.24 billion, which is an increase of 32% from the previous year.

Trulieve reported $302 million in revenue for the fourth quarter, with 2% growth in retail revenue and 96% of revenue coming from retail sales. A further $85 million in adjusted EBITDA, or 28% of revenue, was generated by the company during the quarter. Also, the company generated $21 million in free cash flow and $55 million in operating cash flow during the quarter.

The company’s growth can be attributed to various factors, including Trulieve’s expansion into new markets, the opening of new dispensaries, and the company’s strong branding strategy. The Florida-based company operates in various states across the US, including West Virginia, Massachusetts, California, and Connecticut, among others.

“Trulieve has grown to surpass $1.2 billion in revenue in less than seven years, a notable milestone and a testament to the agility of our team,” said Kim Rivers, Trulieve CEO. “Our success is the culmination of thoughtful intention, superb execution, and best in class capabilities for rapid growth.”

#4: Village Farms

Village Farms International, Inc. (NASDAQ: VFF) announced its financial results for the fourth quarter and full year ending December 31, 2022. According to the released data, Village Farms’ revenue decreased from $72.8 million in 2021 to $69.5 million in 2022, slightly missing the average analyst estimate of $70 million on Yahoo Finance. The company attributed the decline to a stronger U.S. dollar relative to the Canadian dollar, which resulted in a $2.4 million decline in reported U.S. sales for their Canadian Cannabis operations.

Moreover, the company recorded a net loss of $49.3 million, or $0.54 per share, compared to a net profit of $2.1 million, or $0.03 per share, which also missed the Yahoo estimate for earnings of $0.09.

“The fourth quarter of 2022 once again demonstrated the momentum in our Canadian Cannabis business as investments in new brands and product innovations contributed to 25% year-over-year growth in retail branded sales and our 17th consecutive quarter of positive adjusted EBITDA,” said Michael DeGiglio, Chief Executive Officer, Village Farms.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), a biotechnology company focused on developing and delivering innovative treatments for addiction and other mental health conditions, recently signed a licensing partnership agreement in Europe with a Portugal-based healthcare consortium currently operating in stealth mode. This agreement marks a significant step for Awakn as it expands its reach and solidifies its position as a leader in the field of psychedelic medicine.

The licensing partnership agreement between Awakn and the Portugal-based healthcare consortium will allow the two organizations to collaborate on the development and commercialization of Awakn’s proprietary psychedelic-assisted therapies for the treatment of addiction and other mental health conditions. The agreement grants the healthcare consortium exclusive rights to use and distribute Awakn’s intellectual property and technologies within Portugal, and non-exclusive rights to distribute these therapies throughout the rest of Europe.

According to Anthony Tennyson, the CEO of Awakn, the company is delighted to broaden “by geography” and “by scope” its license partnership business for the treatment of mental health disorders. “We are also delighted to work with our new partners in Portugal who are deeply experienced in, and knowledgeable of, the Portuguese mental health treatment and wellness sectors,” Tennyson added.

#2: Seelos Therapeutics

Seelos Therapeutics, Inc. (NASDAQ: SEEL), a clinical-stage biopharmaceutical company, recently announced a registered direct offering of its common stock and warrants to purchase its common stock. The offering is expected to raise up to $11.24 million in gross proceeds, which will be used to fund the development of the company’s pipeline of novel therapeutics.

Seelos Therapeutics intends to sell up to 12,059,298 shares of its common stock, as well as pre-funded warrants worth a combined 9,340,702 shares of common stock and common warrants worth a combined 26,750,000 shares of common stock. The pre-funded warrants and accompanying common warrants are being sold at a combined offering price of $0.524 per pre-funded warrant, while the shares of common stock and accompanying common warrants are being sold for a combined offering price of $0.525 per share.

According to the company, the proceeds from the registered direct offering will be used to advance the development of Seelos Therapeutics’ pipeline of novel therapeutics, including the continued clinical development of its product candidates. The company also plans to use the funds for general corporate purposes. This offering is expected to close on or about March 14, 2023, subject to the satisfaction of customary closing conditions.