Key Takeaways; Cannabis Sector
- Agrify raised $27 million in private placement.
- Jushi raised $10 million selling shares at $3.68.
- High Tide Q4 revenue increased 117% to C$53.9 million.
- Trulieve borrowed additional $75 million at 8%.
Key Takeaways; Psychedelic Sector
- Awakn filed a patent application for a new class of entactogen-like molecules that could be used to treat a variety of addictions.
Stocks are having their worst January since 2008, and this is putting a strain on the cannabis industry. At the beginning of this year, many cannabis stocks have lost more than 18% of their value.
Cannabis equities are generally considered speculative, and speculative assets have taken the worst of the losses in the last four weeks. Four weeks into the year, 2022 is looking a lot like 2020, with a historic downturn extending.
Despite the downtrend, some companies are still thriving in the midst of the chaos. Below is a weekly roundup on the top companies in the Cannabis and Psychedelics sectors.
Top Marijuana Company for Week
#1: Agrify
In a private placement transaction, Agrify Corporation (NASDAQ:AGFY), the most innovative and vertically integrated provider of premium cultivation and extraction solutions for the cannabis and hemp industries, announced on January 26 that it had entered securities purchase agreements with an institutional investor and other accredited investors.
According to a company statement, Agrify will issue and sell 4,020,994 shares of common stock or, in lieu of Common Stock, pre-funded warrants and accompanying warrants exercisable six months from closing to purchase up to 3,015,745 shares of Common Stock for a period of five years at an exercise price of $7.48 per share for a period of five years at an exercise price of $7.48 per share. The Common Stock and Warrants will be sold at a combined purchase price of $6.80
Members of management and the Board of Directors, including Raymond Chang, the Company’s Chairman and Chief Executive Officer, took part in the Offering on the same terms as ordinary investors, with the exception of a combined purchase price of $6.90.
Before deducting placement agent fees and estimated offering expenses, the Company anticipates to receive gross proceeds from the Offering of approximately $27.3 million.
#2: Jushi
On January 26, 2022, Jushi Holdings Inc. (OTC: JUSHF) raised $10 million in a non-brokered private placement after the company’s shares began to rise from their 52-week low of $2.95.
The offering of 2,717,392 subordinate voting shares, were sold at a price of $3.68 per share to Graticule Asset Management Asia for gross proceeds of $10 million. According to Jushi, the funds acquired will be utilized for possible strategic acquisitions as well as general company purposes.
As of December 31, 2021, the company’s pro forma cash balance, including proceeds from the Offering, was approximately $104 million.
This announcement came just a few weeks after, Jim Cacioppo, Chief Executive Officer, Chairman, and Founder of Jushi, announced that he had purchased 66,800 Class B Subordinate Voting Shares of the company on the open market for $220,000. In total, he now owns about 19.2 percent of the issued and outstanding Subordinate Voting Shares.
Jushi is a vertically integrated cannabis firm run by a management team with extensive experience in the industry. Jushi is concentrating its efforts in the United States on acquiring branded cannabis properties across multiple states through opportunistic purchases, distressed workouts, and competitive applications.
#3: High Tide
On January 27, 2022, High Tide Inc. (NASDAQ: HITI), a major retail-focused cannabis company with bricks and mortar and worldwide e-commerce assets, released its unaudited year-end financial results for 2021. The Company had not been able to finalize its income tax provision to date due to personnel problems emerging from the pandemic. However, the company anticipates completing the work related to this matter and filing its full set of audited consolidated financial statements and management’s discussion and analysis on or before January 31, 2022.
With 109 sites across Canada, High Tide continues to hold a dominant position in the Canadian cannabis retail sector. To date, the Company’s debut of an innovative discount membership model in its retail outlets near the end of the fourth fiscal quarter of 2021 has yielded encouraging results, with same-store sales increasing during the first fiscal quarter of 2022. Due to this, High Tide plans to generate at least $70 million in revenue in the first fiscal quarter of 2022, equating to an annual run rate of more than $280 million.
The Company plans to expand its Canadian retail store portfolio to at least 150 locations by the end of the calendar year 2022, with a particular concentration on the province of Ontario. In the near future, the company wants to enter the British Columbia market, and it will continue to grow strategically in the other provinces where it now operates. Despite the fact that High Tide’s brick-and-mortar retail businesses continue to confront major obstacles as a result of the ongoing COVID-19 outbreak, the company is optimistic in its ability to maintain a favorable growth trajectory.
#4: Trulieve
Trulieve Cannabis Corp. (OTC: TCNNF), a multistate operator, announced the closing of a $75 million private placement offering, the second tranche of a $425 million debt raise, which is a marijuana industry record.
The senior secured notes have an annual interest rate of 8%, which is among the lowest in the cannabis business. They are due in 2026. The notes also have the same terms as the $350 million first tranche that closed in October.
The revenues will be used for capital expenditures and other company reasons, according to Trulieve, which is based in Florida. “This additional funding provides greater flexibility as we execute on our strategic initiatives in 2022,” CEO Kim Rivers said in a news release.
Trulieve rivals Massachusetts-based Curaleaf Holdings as the largest marijuana operator in the United States based on sales after acquiring Arizona-based Harvest Health & Recreation last year.
Trulieve is a vertically integrated cannabis company and multi-state operator in the United States, operating in 11 states and with market leadership in Arizona, Florida, and Pennsylvania. The company is positioned for rapid development and expansion, leveraging its hub model to gain scale in retail and distribution in new and existing countries. In addition, Trulieve provides ideal customer experiences and expands access to cannabis by providing innovative, high-quality products across its brand portfolio, allowing patients and customers to live without limitations.
Trulieve is listed on the over-the-counter (OTC) market under the symbol TCNNF and is listed on the Colombo Stock Exchange under the symbol TRUL.
Top Psychedelic Companies for Week
#1: Awakn
Awakn Life Sciences Corp. (NEO: AWKN) (OTCQB: AWKNF), a biotechnology company focused on researching, developing, and delivering psychedelic therapeutics to treat addiction, announced on January 26 that it had filed a patent application for a new chemical series of entactogen-like molecules, bolstering Awakn’s intellectual property portfolio and pipeline for the treatment of a wide range of addictions, including but not limited to substance addictions such as Compulsive Sexual Behavior and Gambling Disorder.
The new chemical series, which Awakn has patented, represents a big step forward in the production of entactogens and marks a significant milestone in Awakn’s drug discovery research and development. Awakn’s novel pipeline of NCEs extends Awakn’s position as a global leader in the psychedelic-biotechnology business, adding to current patent applications and active clinical development programs.
In October, Awakn and their research partner Evotec stated that the NCE initiative would be expanded towards lead optimization. This research program will include the development of one or more novel entactogen-like molecules for which a patent has been filed, with the goal of moving one or more drugs into clinical development.