Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Clever Leaves and InterCure announced an international strategic partnership; Clever Leaves also reported Q4 and full year earnings results.
  • Cresco to become the new leader in cannabis sector, after they announced a $2 billion acquisition deal; Cresco also reported Q4 and full year earnings.
  • Agrify announced record fourth quarter and fiscal year 2021 results.
  • Jushi delivered solid earnings results as revenue increased 22% to $65.9 million
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Key Takeaways; Psychedelic Sector

  • Awakn announced closing of private placement

It was another week packed with a lot of key developments in the cannabis sector as more companies continued to report their fourth quarter and full year, 2021, results. The company that dominated the headlines more was Clever Leaves, which saw its stock price skyrocket to over 250%, during the course of the week. Below is a full weekly roundup on the movers and shakers of the cannabis and psychedelics sectors.

Top Marijuana Companies for Week

#1: Clever Leaves

On March 22, 2022, Clever Leaves Holdings Inc. (NASDAQ: CLVR), a leading multinational operator and licensed producer of pharmaceutical-grade cannabinoids, and InterCure Ltd. (NASDAQ: INCR), Israel’s leading global medical cannabis company, signed an exclusive multi-year cultivation, marketing, and distribution agreement.

As part of the agreement, Clever Leaves and InterCure decided to collaborate on certain technical concerns for the development of new products, in order to meet the needs of patients in various regions. For instance, over the term of the agreement, InterCure will have access to Clever Leaves’ high-THC medical cannabis flower, allowing it to service a variety of medical cannabis markets, including the Israeli market. Subsequently, as part of the partnership, Clever Leaves will cultivate InterCure’s high-quality strains in order to introduce InterCure’s EU-GMP compliant branded products in the EU, UK, and South American markets.

In a follow up, to this news of a huge partnership deal, Clever Leaves reported financial and operating results for the fourth quarter and full year 2021, on Thursday March 24, 2022. Revenue in the fourth quarter of 2021 increased 25% to $4.2 million compared to $3.3 million for the same period in 2020. According to the company, this increase was driven by sustained performance strength within the non-cannabinoid segment, as well as the cannabinoid segment. As for full year financial results; revenue in 2021 increased 27% to $15.4 million compared to $12.1 million in 2020.

As a result of this top announcements, the stock price of Clever Leaves, spiked to over 250% within a few days. On Wednesday, March 23, 2022, shares of Clever Leaves were trading at around $1.24, and by the end of trading day on Friday, March 25, 2022, the shares had skyrocketed to over $3.84. This was a huge gain, in a single week.

#2: Cresco Labs

Cresco Labs Inc. (OTC: CRLBF) announced on March 23, 2022, that they have entered into a definitive arrangement agreement to buy New York-based Columbia Care Inc. (OTC: CCHWF) in a $2 billion deal that will make Cresco the largest marijuana company in the U.S.

This game-changing merger will combine best-in-class wholesale, retail, and operations with a larger strategic foothold in the cannabis industry’s largest and fastest-growing markets. The all-stock purchase will give Cresco a presence in new recreational-marijuana markets, such as New Jersey and Virginia.

This is the largest merger in the marijuana industry since Trulieve bought Harvest Health & Recreation for $2.1 billion last year. In addition, the deal is the biggest involving a Chicago-based marijuana company since Grassroots was bought by Curaleaf, for $715 million in 2020.

Additionally, this acquisition has cemented Chicago’s position as the epicenter of the legal marijuana. Along with Green Thumb Industries and Verano Holdings, Cresco is one of three major publicly traded cannabis companies with headquarters in Chicago.

Last year, Cresco made $1 billion in revenue, while Columbia Care made around $460 million. This means that the merged businesses would be bigger than Curaleaf, which had $1.2 billion in revenue last year. Moreover, in ten states, Cresco operates 50 dispensaries and 21 cultivation facilities. In 18 states, Columbia Care operates 99 dispensaries and 32 cultivation facilities. Therefore, the combined enterprise will employ around 6,100 people.

This purchase also gives Cresco access to ten of the fastest-growing U.S. markets, including New Jersey, which is projected to start recreational sales soon and expand to a $2 billion-a-year industry, similar to Illinois’. The combined company that will result from this merger and acquisition will be the largest in Illinois, Pennsylvania, Colorado, and Virginia.

Cresco also released earnings for the fourth quarter and year ending December 31, 2021 on Wednesday, March 23, 2022. Annual revenue was $821.7 million, including $217.8 million in the fourth quarter. In addition, Cresco’s net loss for the quarter was $11.9 million, compared to $41.2 million in the same quarter of 2020.

Furthermore, the company’s yearly net loss was $296.8 million, up from $92.8 million in the previous year. The majority of the annual net loss was due to a $291 million impairment charge in the third quarter related to the company’s decision to change its California strategy. Finally, at the end of 2021, Cresco had about $224 million in cash and equivalents on hand.

#3: Agrify

On March 23, 2022, Agrify Corporation (NASDAQ: AGFY) released financial results for the fourth quarter and fiscal year ended December 31, 2021, with revenue increasing 481% to $25.3 million from $4.4 million the previous year. This was also a significant increase from the $15.8 million in revenue in the third quarter. Moreover, Agrify reported a net loss of $13.3 million, or $0.60 per diluted share, in the fourth quarter, compared to a net loss of $13.1 million, or $2.23 per diluted share, in the previous year.

In addition, the fiscal year 2021 brought in $59.9 million in revenue, up 395% over the previous year’s $12.1 million. Furthermore, the net loss for the fiscal year was $32.5 million, or $1.69 per diluted share, compared to a net loss of $21.6 million, or $5.32 per diluted share, the previous year.

As a result of the strong demand for Agrify’s cultivation and extraction solutions, management said it is expecting revenue to be in the range of $140 million to $142 million for the fiscal year 2022. The company also said that cumulatively, all of the 10-year agreements under Agrify’s TTK Solution program are projected to generate an estimated $837 million in total revenue.

#4: Jushi

Jushi Holdings Inc. (OTC: JUSHF) released its fourth-quarter and full-year financial results for the year ended December 31, 2021. Jushi’s total revenue surged 104% year over year to $65.9 million, which was a 22% increase.

The acquisition of Nature’s Remedy in Massachusetts, strong revenue growth at the company’s BEYOND / HELLO stores in Virginia and Illinois, and increased wholesale activity at the company’s grower-processor facilities in Pennsylvania and Virginia were all factors in the company’s sequential revenue growth.

Furthermore, the company stated that it was chosen in the retail lottery for a provisional medical marijuana dispensary license in Clermont County, Ohio, which is located in the Tri-State area of Cincinnati, and that it is awaiting certification and license issuance by The Ohio Board of Pharmacy.

Jushi also reported that it has made progress in the Nevada market, having finalized the acquisition of The Apothecarium in Las Vegas, Nevada, bringing the total number of vertically integrated state-level operations to four and bringing the total number of national operational stores to 29. In addition, NuLeaf, Inc., a Nevada-based vertically integrated operator with three adult-use and medicinal retail dispensaries, a 27,000 square foot cultivation facility, and a 13,000 square foot processing facility, has also signed into a definitive agreement to be acquired by Jushi.

Top Psychedelic Company for Week

#1: Awakn

On March 22, 2022, Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company focused on researching, developing, and delivering psychedelic therapeutics to treat addiction, announced that it had completed a non-brokered private placement by issuing 2,031,250 units at a price of $1.60 per Unit for gross proceeds of $3,250,000.

Each Unit consists of one common share in the Company’s capital and one-half of one whole Common Share purchase warrant. Each Warrant authorizes the holder to purchase one Common Share for $2.20 per Common Share for a period of twenty-four months from the date of issuance.

According to Awakn, all securities issued in conjunction with the Offering will be subject to a four-month plus one-day hold period from the date of issuance, as well as the applicable securities legislation’s resale requirements. The company also reported that the Offering’s gross proceeds will be used for working capital and other general company purposes.


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