Key Takeaways; Cannabis Sector

• Leafly challenged and triumphed against New York’s marijuana advertisement restrictions.
• Columbia Care rebranded as The Cannabist Co. and secured $25 million in private placement.
• Canopy Growth raised $25 million in a private placement offering.

Key Takeaways; Psychedelic Sector

• Awakn’s CRO, Prof. David Nutt, delivered keynote at The Clinic of Change event.
• Seelos Therapeutics plummeted over 70% following Phase 2 trial setback, leading to analysts’ downgrade.

It was another eventful week in the cannabis sector as a new cannabis exchange traded fund (ETF) was launched by Subversive Capital Advisor, driven by the anticipation of a possible rescheduling of marijuana by the U.S. government. The ETF’s debut came as cannabis stocks continued to experience a significant upward trajectory, driven by reports that officials from the U.S. Department of Health and Human Services (HHS) had recommended a reclassification of marijuana as a Schedule 3 substance; a shift that would have significant favorable implications for the legal marijuana sector.

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: Leafly

In a legal showdown challenging New York’s ban on third-party marijuana marketing, online cannabis platform Leafly Holdings, Inc. (NASDAQ: LFLY) secured a significant victory, temporarily blocking the enforcement of the restrictions. The lawsuit, filed by Leafly, New York’s Stage One Dispensary, and a consumer, claimed that New York’s Office of Cannabis Management (OCM) unfairly targeted “third-party platforms” like Leafly, hindering the industry and limiting retailers’ ability to market their products effectively.

The court order, which was issued after the New York attorney general’s office agreed to a stay on the enforcement of the contested provisions, specifically exempted Leafly from the restrictions, effectively granting the platform a temporary online cannabis advertising monopoly in the state.

In a press release, Leafly’s CEO, Yoko Miyashita, expressed concerns that the OCM’s stance towards third-party platforms deprived consumers and licensed cannabis retailers of vital tools for navigating the legal cannabis landscape in New York.

“We are very pleased with the order, but remain concerned that the (OCM’s) stance towards third-party platforms deprives consumers and licensed cannabis retailers with important tools that help them navigate legal cannabis in New York state;…We’ll continue to work toward sensible regulations and are hopeful for a solution that empowers small businesses and supports consumer education and choice, while still protecting the public health, safety, and welfare of the people of New York,” Yoko Miyashita said in a statement.

This court victory carries significant implications for Leafly and its financial performance. Despite recent layoffs and strategic shifts towards consumer-focused content, the company reported losses of $1.4 million in Q2 and $5.4 million in Q1 of 2023. The outcome of this legal battle may help Leafly regain its footing in the ever-evolving cannabis industry.

#2: Columbia Care

In a recent move, Columbia Care Inc., a major multistate marijuana operator, rebranded itself as The Cannabist Co., and it’s now officially known as The Cannabist Company Holdings Inc. (OTC: CCHWF). This transformation comes in the wake of the termination of a high-profile merger with rival multistate operator Cresco Labs Inc. (OTC: CRLBF) earlier this year, citing changes in the cannabis industry landscape as the primary reason.

The Cannabist Co., which already boasts 36 cannabis stores under the Cannabist brand, stated that it plans to convert its entire retail portfolio to the Cannabist brand nationwide by 2024. Jesse Channon, CEO of The Cannabist Co., stated, “As we’ve opened Cannabists across the country, it became clear to us that the ethos behind that retail brand represented our company as a whole – a passion for cannabis that we all share and fuels our work every day.”

Shortly before unveiling their new identity, The Cannabist Co. secured a substantial financial boost through a private placement. The company raised an impressive $25 million through the sale of 22.2 million units at C$1.52 each. These units consist of a common share of the company and half of a share purchase warrant, providing the holder with an option to purchase another share at C$1.96 within the next three years.

Furthermore, investors have the option to purchase an additional $25 million worth of units at the same price within 45 days. The company stated that, the proceeds from this private placement will primarily be directed towards reducing the company’s debt and addressing various other business needs, a move that underscores The Cannabist Co.’s commitment to financial stability and growth.

#3: Canopy Growth

In a move that reflects the dynamic and ever-evolving cannabis industry, Canadian cannabis producer Canopy Growth Corporation (NASDAQ: CGC) secured $25 million (33.8 million Canadian dollars) in a private placement offering. This substantial capital injection comes as Canopy Growth continues to experience a notable upswing, primarily fueled by heightened investor enthusiasm due to the potential reclassification of cannabis as a Schedule 3 substance, a change that has the potential to lead to a highly favorable resolution of the 280E tax issue.

The private placement offering involved subscription agreements with institutional investors, resulting in the issuance of approximately 22.9 million units at a price per unit of $1.09. Notably, this price represented an enticing 22% discount from the previous Friday’s closing price, underlining the appeal of this investment opportunity.

Canopy Growth, headquartered in Smiths Falls, Ontario, also granted the investors an over-allotment option, allowing them to acquire up to an additional 22.9 million units. This option, valid until November 2, could potentially generate another $25 million in gross proceeds if fully exercised.

Canopy Growth stated that the primary purpose of raising this capital is to bolster its working capital and support various general corporate initiatives. The closing of the private placement pursuant to the Subscription Agreements is expected to occur on or about September 19, 2023, subject to customary closing conditions.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) Chief Research Officer, Professor David Nutt, took center stage as he delivered a keynote presentation at an event hosted by their licensing partner, The Clinic Of Change, this week. The event marked an important milestone in Awakn’s mission to advance psychedelic-assisted therapies and addiction treatments.

In his keynote address, Prof. Nutt shared insights into cutting-edge research and developments in the field of psychedelic medicine. His presentation focused on the promising potential of psychedelic substances, such as psilocybin and MDMA, to revolutionize mental health treatment and address various forms of addiction.

Prof. Nutt’s extensive background in neuroscience and psychopharmacology lent credibility to his remarks. He is renowned for his work in understanding the effects of different substances on the brain, including the risks and benefits associated with their use. His presence at the event underscored Awakn’s commitment to evidence-based approaches in the emerging field of psychedelic therapy.

#2: Seelos Therapeutics

Seelos Therapeutics, Inc. (NASDAQ: SEEL) faced a significant setback as its stock price plummeted by 70% on Wednesday following an unfavorable outcome in a clinical trial. The trial, which involved the company’s investigational psychedelic therapy known as SLS-002, aimed to address suicidal symptoms in adults diagnosed with major depressive disorder. Unfortunately, the Phase 2 trial, which included 147 patients, failed to achieve meaningful results for its primary endpoint.

Seelos attributed the trial’s failure to financial constraints, which prevented them from meeting their enrollment targets. This setback had a profound impact on the company’s stock price, prompting Cantor Fitzgerald to act. Charles Duncan, an analyst at Cantor Fitzgerald, downgraded Seelos from an “Overweight” rating to a “Neutral” one.

Duncan expressed concerns about the company’s financial limitations, which could hinder its ability to effectively conduct and complete similar trials in the future. Additionally, there are uncertainties surrounding how regulatory authorities, particularly the Food and Drug Administration (FDA), will respond to the trial data.

Seelos Therapeutics now faces the challenging task of regrouping and addressing the issues that led to the trial’s failure while navigating the uncertainties of regulatory approval in the future.

Key Takeaways; Cannabis Sector

• High Tide reported positive free cash flow and growing revenue despite incurring losses.
• Canopy Growth announced plans to cease funding BioSteel amid restructuring.
• Innovative Industrial Properties announced Q3 2023 dividends.
• SNDL launched an e-commerce platform for its liquor retail banner, Wine and Beyond.

Key Takeaways; Psychedelic Sector

• Awakn released a corporate update on recent progress.

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 Canadian cannabis retailer, reported its financial results for the third fiscal quarter of 2023, marking a significant achievement in the challenging marijuana industry. The company reported positive free cash flow of 4.1 million Canadian dollars ($3 million), surpassing its financial forecast and indicating its ability to thrive in a tough market.

High Tide CEO, Raj Grover, expressed his satisfaction, stating that the third fiscal quarter was High Tide’s best in history. “I’m thrilled to report that our third fiscal quarter was the best in High Tide’s history since our inception, as we met our goal of generating positive free cash flow of CA$4.1 million this quarter, five months ahead of our previously communicated timeline and hence becoming less reliant on macro and industry conditions,” Grover said in a press release.

Despite this positive milestone, High Tide reported a net loss of CA$3.6 million for the quarter, up from CA$2.7 million in the same period the previous year. This loss was largely attributed to a revaluation of derivative liabilities. However, total revenue showed strong growth, increasing by 30.4% year-over-year to CA$124.4 million in the quarter.

High Tide also reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$10.2 million, a 140% increase compared to the previous year. Notably, this marked the 14th consecutive quarter of positive adjusted EBITDA for the company.

In terms of market presence, High Tide remains the largest non-franchised cannabis retailer in Canada, with 156 stores and a 9.5% share of the nation’s marijuana retail market, excluding Quebec, which has a retail monopoly.

#2: Canopy Growth

Canadian cannabis producer Canopy Growth Corporation (NASDAQ: CGC) announced its decision to cease funding for its subsidiary, BioSteel Sports Nutrition Inc., and commence a court-supervised sale of the sports nutrition company. This strategic move aligns with Canopy’s ongoing restructuring, as the cannabis giant seeks to enhance profitability and focus on its asset-light cannabis strategy.

Canopy’s CEO, David Klein, explained that although BioSteel had experienced revenue growth, it did not align with Canopy’s asset-light cannabis strategy. Additionally, Klein emphasized Canopy’s commitment to taking decisive actions to enhance profitability and maintain its position as a major player in the North American cannabis sector.

“As while BioSteel’s business has shown significant year-over-year revenue growth, and we believe the brand remains an attractive asset, it does not align with Canopy Growth’s cannabis focused asset-light strategy,” Canopy CEO David Klein said in a statement.

“We have repeatedly demonstrated that we will take decisive action to enhance our profitability and ensure we are focused and positioned to be a leader in the North American cannabis sector,” he added.

This decision led BioSteel to enter creditor protection proceedings under the Companies’ Creditors Arrangement Act (CCAA). With BioSteel entering CCAA proceedings, the company aims to conserve cash and preserve its assets by effectively going into “hibernation.” The CCAA process will be utilized to identify a buyer efficiently, and if approved by the court, it will be administered by BioSteel with support from Greenhill & Co. Canada, under the oversight of the monitor, KSV Restructuring.

Canopy Growth’s decision to cease funding BioSteel and initiate a court-supervised sale reflects its commitment to optimizing its cannabis-focused strategy while addressing the financial challenges faced by its subsidiary. This strategic move is part of Canopy’s ongoing transformation as it strives to enhance profitability and leadership in the North American cannabis sector.

#3: Innovative Industrial Properties

Innovative Industrial Properties, Inc. (NYSE: IIPR), a pioneering real estate company with a focus on the regulated U.S. cannabis industry, declared its third quarter 2023 dividends. The company’s board of directors announced a dividend of $1.80 per share for common stock, contributing to a total of $7.20 per common share declared over the past twelve months. This marked a notable increase of $0.40, equivalent to a 6% rise, compared to the dividends declared in the previous twelve months.

In addition to the common stock dividend, IIP’s board of directors also declared a regular quarterly dividend of $0.5625 per share for IIP’s 9.00% Series A Cumulative Redeemable Preferred Stock.

According to the company, these dividends will be disbursed to stockholders on October 13, 2023, with eligibility based on ownership records as of September 29, 2023.

#4: SNDL

SNDL Inc. (NASDAQ: SNDL) announced its foray into the world of e-commerce with the launch of a new online platform for its popular liquor retail banner, Wine and Beyond. According to the company, this move is designed to broaden accessibility and reach for Wine and Beyond’s extensive range of products, which includes rare spirits, both local and international beers, and distinctive wines.

Robbie Madan, Chief Information and Digital Officer at SNDL, expressed excitement about this digital expansion, stating, “We are pleased to extend the Wine and Beyond experience into the digital landscape.” He emphasized that Wine and Beyond stores are known for their exceptional product selection, unique offerings, and knowledgeable staff who provide top-notch customer service.

Wine and Beyond’s online catalogue boast an impressive selection of nearly 9,000 products, with regular additions and new frequent deals. SNDL anticipates that this strategic move will not only enhance its market presence and customer outreach but also contribute to revenue growth.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), provided a corporate update on its recent developments and announced the closing of the third tranche of its private placement financing. The corporate update indicates that, the Toronto-based biotechnology company, which focuses on treating addiction, particularly Alcohol Use Disorder (AUD), has achieved significant milestones in recent months.

One of the key highlights in Awakn’s corporate update was the successful completion of its exit from healthcare services in August 2023, a move that was announced in June 2023. This strategic move now allows the company to concentrate exclusively on research and development efforts aimed at treating addiction. This transition also led to a reduction in Awakn’s expenses.

In addition to this, Awakn submitted a Clinical Trial Application (CTA) for phase III of its lead program, AWKN-P001, designed for the treatment of Severe Alcohol Use Disorder (SAUD). The phase III clinical trial, set to commence in the UK across ten National Health Service (NHS) sites, will involve 280 participants in a randomized placebo-controlled trial. Awakn has committed approximately GBP £800,000 towards the trial’s costs, with additional funding provided by partners such as the UK National Institute of Health and Care Research (NIHR), the UK Medical Research Council (MRC), and the University of Exeter. Pending ethical and regulatory approvals, the trial is expected to initiate treatment for the first participants in Q1 2024.

Awakn is also making progress in its Zydis®/MDMA feasibility study, which began in March 2023. The study explores a proprietary formulation of MDMA using Catalent’s Zydis® orally disintegrating tablet (ODT) technology. According to the corporate update, the company has completed two out of three planned manufacturing tests and is now advancing to the third manufacturing production run test.

Furthermore, Awakn is expanding its licensing partnership business, providing access to its proven proprietary ketamine-assisted therapy protocol for AUD treatment and additional healthcare services intellectual property. Partner clinics are now located in various regions, including New York and California in the US, Ontario in Canada, Oslo and Trondheim in Norway, London in the UK, and Lisbon in Portugal.

Regarding financing, Awakn initiated a non-brokered private placement financing in April 2023, aiming to raise up to $4,000,000 at CAD$0.46 per unit. Each unit consisted of one common share and three-quarters of one common share purchase warrant, allowing the holder to acquire additional shares at $0.63 per share for five years. The company said in its corporate update that it has now closed the third tranche of this offering, raising $767,215 for this tranche and a total of $2,734,663 for the entire offering.

In conclusion, Awakn’s corporate update indicates that the company is making substantial strides in its mission to develop effective addiction therapeutics and expand its reach in the addiction and mental health treatment space. With ongoing clinical trials, partnerships, and financing, the company remains committed to addressing the challenges posed by addiction and related disorders.

Key Takeaways; Cannabis Sector

• Green Thumb board of directors authorized a $50 million repurchases program.
• Cresco launched first-ever cannabis ads campaign on Spotify.
• Tilray continue cannabis portfolio expansion, amidst share price surge and growing marijuana optimism.
• Aurora Cannabis completed a $9.0 million repurchase of its convertible senior notes.
• Verano Holdings announced participation in an upcoming conference.

Key Takeaways; Psychedelic Sector

• Awakn seeks approval for Phase III trial of AWKN-P001: A promising treatment for severe alcohol use disorder.

In the ever-evolving landscape of the cannabis sector, the past two weeks have been nothing short of a game-changer. The stage was set by a momentous decision from the U.S. Department of Health and Human Services, which sent ripples of optimism throughout the industry. The Department of Health and Human Services made an official recommendation to the Department of Justice, urging them to reclassify marijuana from Schedule 1 to the more favorable Schedule 3 on the federally controlled substances list; a move that holds profound implications for the sector, particularly in its potential to relieve the crippling burden of the 280E tax provision that has weighed down cannabis operators for far too long. This decision sent a wave of excitement and anticipation throughout the cannabis enthusiasts and investors alike.

Below is a weekly roundup on the companies that dominated the news in the cannabis and psychedelic industries during the past week.

Top Marijuana Companies for Week

#1: Green Thumb

Chicago-based Green Thumb Industries Inc. (OTC: GTBIF), a prominent marijuana multistate operator, unveiled a year-long share repurchase program that could see it buy back up to 10.4 million of its outstanding subordinate shares. The move is designed to enhance the value of the company’s remaining shares, which currently number around 200 million.

The company’s board of directors authorized a budget of up to $50 million for the repurchase program, which will commence on September 11, 2023, and continue until September 10, 2024.

Green Thumb’s CEO, Ben Kovler, noted that this decision was made in response to recent developments in the cannabis industry, including news about potential marijuana rescheduling by the U.S. government, which led to a significant increase in cannabis equity prices.

However, Green Thumb emphasized that this buy-back initiative was voluntary and can be terminated or suspended at any time if management believes there are better uses for the company’s cash reserves, “If management determines it has a better use for its cash reserves, it is under no obligation to continue to purchase shares, and share purchases may be suspended or terminated at any time at Green Thumb’s discretion,” the company asserted in the press release.

Green Thumb is one of the few profitable publicly traded cannabis operators in the United States, with a presence in 14 states. This share repurchase program reflects its commitment to creating shareholder value while continuing its growth initiatives.

#2: Cresco Labs

Cresco Labs Inc. (OTC: CRLBF), a leading marijuana multistate operator based in Chicago, recently launched an innovative advertising campaign on the popular music streaming service, Spotify. This strategic move is aimed at targeting Illinois consumers and promoting their Sunnyside cannabis chain. The campaign includes 30-second audio ads and digital banners integrated within the Spotify app.

Spotify Technology S.A. (NYSE: SPOT) boasts an impressive user base of over 551 million users, with 220 million subscribers, making it a prime platform for reaching a vast audience. Cory Rothschild, the national retail president of Cresco Labs, expressed excitement about this partnership, highlighting its significance in normalizing cannabis and demonstrating the high-quality marketing capabilities that Cresco Labs possesses.

“Audio streaming services represent a major opportunity for brands to reach large audiences in a targeted manner, and we’re excited to collaborate with Spotify to launch the first-ever cannabis ads,” Cory Rothschild said in a statement.

Cresco’s decision to advertise on Spotify aligns with a broader trend in the industry, where social media platforms like Facebook, Instagram, and Twitter have started to ease restrictions on marijuana and hemp companies seeking to promote themselves.

#3: Tilray

Tilray Brands, Inc. (NASDAQ: TLRY) a prominent player in the cannabis industry, has made significant strides in recent weeks, capitalizing on a surge in stock prices and expanding its product portfolio. Following an over 36% increase in stock value after the U.S. Department of Health and Human Services urged a reconsideration of marijuana’s classification, Tilray unveiled its ‘Diamonds Collection’ through its premium cannabis lifestyle brand, RIFF.

This collection introduced Diamond Infused Pre-rolls, featuring strains like Melonaide and Purple Punch OG, as well as ’26 Delta Diamond Infused Blunts, which include Blue CKS with Girl Scout Cookies (GSC) lineage and Blueberry Kush.

Building on this momentum, Tilray expanded its market-leading cannabis portfolio with the launch of new flower genetics by the best-selling cannabis lifestyle brand, Redecan. This expansion includes limited-edition strains like King Sherb and Animal RNTZ, both which are meticulously cultivated by master growers.

Blair MacNeil, President of Tilray Canada, expressed excitement about this development, marking a new era for Redecan and their commitment to delivering unparalleled quality and experiences to cannabis consumers across Canada. “We are thrilled to unveil the first Redecan innovation following our acquisition of HEXO Corp. This is a pivotal moment for Redecan, marking a new era in our journey to deliver unparalleled quality and experiences to cannabis consumers across Canada,” said Blair MacNeil.

Tilray’s recent surge in stock prices, coupled with its commitment to innovative product offerings through RIFF and Redecan, underscores the dynamic nature of the cannabis industry. And as the industry continue to evolve, Tilray will remain at the forefront, shaping its future and providing consumers with a diverse range of high-quality cannabis products.

#4: Aurora Cannabis

Aurora Cannabis Inc. (NASDAQ: ACB), a pioneering Canadian cannabis company, gained over 14% in its share price on Friday, after the company made a significant announcement. The company disclosed it had successful repurchased an aggregate of approximately CAD $12.3 million (US$9.0 million) principal amount of its convertible senior notes, in a series of transactions that spanned from August 16 to September 8, 2023.

This strategic move was financed through the issuance of approximately 20.1 million common shares of Aurora. Following these transactions, Aurora now has approximately $53 million (US$39 million) of Notes outstanding.

According to Aurora, the repurchases were aimed at lowering the company’s overall debt burden and annual cash interest expenses, aligning with its commitment to achieving positive free cash flow. Aurora’s management anticipates that these transactions will result in annualized interest payment savings of $0.66 million.

Miguel Martin, Aurora’s CEO, expressed confidence in the company’s financial stability, stating, “As of today, Aurora has reduced its convertible debt from US$345 million to below US$39 million. With one of the strongest balance sheets among Canadian LPs, evidenced by our net cash position and continued commitment to prudent fiscal management, we are confident in our ability to achieve our target of positive free cash flow within calendar year 2024.”

#5: Verano Holdings

Verano Holdings Corp. (OTC: VRNOF), a prominent multi-state cannabis company, is set to take the stage at several major industry conferences this fall. These appearances come as the cannabis industry continues to evolve and expand, as optimism grows following the potential marijuana reclassification. Below is a quick look at where you can catch them:

ATB Life Sciences Institutional Investor Conference – September 20, 2023; Verano’s President, Darren Weiss, and Chief Investment Officer, Aaron Miles, are all set to join the ATB Life Sciences Institutional Investor Conference on September 20, 2023, in New York City.

Benzinga Cannabis Capital Conference – September 27, 2023; As September rolls on, Verano will head to the Benzinga Cannabis Capital Conference on September 27, 2023, in Chicago.

AGP Cannabis Conference – October 4, 2023 (Virtual); In a digital age, Verano is not staying behind. They will be part of the AGP Cannabis Conference on October 4, 2023, in a virtual format.

Jefferies Cannabis Summit – October 25, 2023; To wrap up their conference season, Verano will be at the Jefferies Cannabis Summit on October 25, 2023, in New York City.

These conferences are a big deal for Verano as they provide a platform to share insights, connect with investors, and showcase their dedication to growth and innovation.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), a leading player in the field of addiction therapy, especially Alcohol Use Disorder (AUD), made a significant move in the battle against Severe Alcohol Use Disorder (SAUD). On September 6, 2023, the company announced that it had submitted a Clinical Trial Application (CTA) for a phase III trial of its flagship program, AWKN-P001, designed to treat SAUD.

SAUD is the most severe form of alcohol use disorder, affecting approximately 12.5 million people in the United States and several European countries, including Germany, the UK, France, Italy, and Spain.

AWKN-P001 is a novel therapy that combines an N-methyl-D-aspartate receptor-modulating drug (ketamine) with psycho-social support to address SAUD. The results from the phase II study of AWKN-P001 were promising, showing an impressive 86% abstinence rate six months after treatment, compared to only 2% before the trial. In contrast, the current standard of care achieved a 25% abstinence rate.

The phase III trial of AWKN-P001 is a collaborative effort involving Awakn, the University of Exeter, and a partnership between the National Institute of Health and Care Research (NIHR) and the Medical Research Council (MRC). This trial will involve 280 participants and will be a randomized, placebo-controlled study. It will take place in the UK across ten National Health Service (NHS) sites. To support this endeavor, Awakn will contribute approximately GBP £800,000, with the NIHR, MRC, and the University of Exeter covering the rest of the costs.

Anthony Tennyson, CEO of Awakn, expressed his enthusiasm for the project, stating, “We are pleased to be working with our partners in the NIHR, MRC, and the University of Exeter on this program as we together progress AWKN-P001 closer to potentially treating the first participant in the phase III trial. We are also pleased to have secured ILAP designation for AWKN-P001 with which we will look to initiate discussions in the near-term with the MHRA and NICE on our target development plan and market access in parallel to the executing the phase III.”

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.