Key Takeaways; Cannabis Sector

• Gage raises $55 million to fuel its marijuana growth in Michigan.
• Ayr Wellness to acquire two Chicago cannabis stores for at least $55 million.
• Canada’s High Tide to acquire 80% of Colorado CBD firm NuLeaf Naturals.
• Germany to legalize recreational cannabis sales, incoming coalition pledges.

Key Takeaways; Psychedelic Sector

• Numinus Receives Conditional Approval to list on the Toronto Stock Exchange.
• COMPASS Pathways granted fifth U.S. patent for crystalline psilocybin.
• Cybin Makes Grant to Establish Psychedelic Treatment Clinic.
• Awakn signs a partnership with NHS to increase access to psychedelic-assisted psychotherapy.

The marijuana boom during the pandemic boosted the U.S. cannabis companies’ revenues. Even though the recent third-quarter results for some weren’t up to the mark, revenue still continues to grow. Most of the domestic cannabis growers have established a strong market presence with wise growth strategies.

In this week’s roundup, we begin in Germany, whereby the three parties expected to form the next government in Germany have agreed to regulate the distribution and sale of recreational cannabis, according to a coalition agreement released Wednesday, November 24.

Europe’s largest economy taking a step toward marijuana legalization and regulation is being viewed as a significant achievement by social groups that have long advocated for an end to cannabis prohibition. Businesses and Companies are hoping to profit from sales of the drug under the watchful eye of government regulators.

As state and global legalization of cannabis ramps up and the prospect of federal legalization in the U.S. rises, the domestic and international players in the sector will have ample opportunities to expand.

Top Marijuana Stocks for Week

#1: Gage Growth

Gage Growth Corp. (OTC: GAEGF) is innovating and curating the highest quality cannabis experiences possible for cannabis consumers in the state of Michigan and Canada and bringing internationally renowned brands to market. Through years of progressive industry experience, the firm’s founding partners have successfully built and grown operations with federal and state licenses, including cultivation, processing, and retail locations. Gage’s portfolio includes city and state approvals for 19 “Class C” cultivation licenses, three processing licenses, and 15 provisioning centers (dispensaries).

The Michigan-based company said it raised $55 million of capital through a one-year secured loan to help finance retail acquisitions and growth in the state. The loan’s annual interest rate is set at the greatest of 7% plus the prime lending rate, or 10.25%, according to a news release by the Company on November 22, 2021. Currently, the prime rate is 3.25%, meaning the loan is at a 10.25% annual rate, payable monthly.

IN THE RELEASE, Gage CEO Fabian Monaco said that the deal, which is secured by a first lien on the company’s assets, provides the company with “maximum flexibility to execute on near-term acquisition opportunities.”

The financing comes as New York- and Toronto-based multistate operator TerrAscend is buying Gage in an all-stock deal initially valued at $545 million. Canaccord Genuity Corp. and Chicago Atlantic arranged the $55 million loan.

#2: Ayr Wellness

Ayr Wellness Inc. (OTC: AYRWF) is an expanding vertically integrated, U.S. multistate cannabis operator focused on delivering the highest quality cannabis products and customer experience throughout its footprint.

The marijuana multistate operator announced a deal to acquire Dispensary 33, which operates two retail cannabis stores in Chicago, for at least $55 million.

According to a Monday, November 22 news release, the $55 million price tag includes $12 million in cash, $3 million in seller notes, and $40 million worth of Ayr shares. An unspecified additional earn-out payment will be based on financial milestones through 2022.

The acquisition will give Ayr “a presence in two of Chicago’s most desirable neighborhoods,” Jonathan Sandelman, CEO of the Miami-based company, said in the release.

The Chicago retail deal follows another Ayr acquisition in Quincy, Illinois, earlier this year in which the company will pay roughly $30 million to buy Herbal Remedies Dispensaries. Ayr’s release said the company also has a social equity partner that has been tapped for a retail license in Bloomington, Illinois.

“We will continue to seek opportunities to expand in Illinois,” Sandelman said. The company recently raised about $150 million in capital after its acquisition spree this year.

#3: High Tide

High Tide Inc. (NASDAQ: HITI) is a leading retail-focused cannabis company with bricks-and-mortar as well as global e-commerce assets. The company is the largest Canadian retailer of recreational cannabis as measured by revenue, with 104 current locations spanning Ontario, Alberta, Manitoba, and Saskatchewan, and was featured in the third annual Report on Business Magazine’s ranking of Canada’s Top Growing Companies in 2021.

The Canadian cannabis retail, CBD, and Accessory Company announced a deal to acquire 80% of Denver-based CBD wellness product producer and distributor NuLeaf Naturals. High Tide also has an option to acquire the remaining 20% of the Colorado Company.

According to a news release, the agreement announced on Monday November 22 is worth slightly more than $31.2 million, which values NuLeaf at more than $39 million. High Tide is paying in shares and will have a three-year call option to acquire the remainder.

NuLeaf’s owners also have an 18-month put option to sell the rest of the Company to High Tide. If High Tide acquires the remainder of NuLeaf, it will pay in cash.

“With the purchase of NuLeaf, we are now further vertically integrated into our CBD business, just like we have been with regard to consumption accessories,” High Tide President and CEO Raj Grover said in a statement.

This year, Calgary, Alberta-based High Tide has acquired Milwaukee-based FabCBD, and United Kingdom-headquartered brand Blessed CBD. High Tide also owns several online cannabis accessory retailers and operates more than 100 retail marijuana stores in Canada.

Top Psychedelic Stocks for Week

#1: Numinus

Numinus Wellness Inc. (TSXV: NUMI.V) is a Canadian publicly-traded company working in the psychedelic space. The company’s operations include Numinus Bioscience, a testing and research facility; Numinus Health, a treatment and healing centre model; and Numinus R&D. The Company’s goal is to help people heal and be well through the development and delivery of innovative mental health care and access to safe, evidence-based psychedelic-assisted therapies.

The Vancouver-based Numinus received conditional approval to graduate from the TSX Venture Exchange (TSXV) to the Toronto Stock Exchange (TSX). Shares will continue to trade under the symbol NUMI.

#2: Cybin

Cybin Inc. (NYSE: CYBN) is a leading ethical biopharmaceutical company, working with a network of world-class partners and internationally-recognized scientists on a mission to create safe and effective therapeutics for patients to address a multitude of mental health issues. Headquartered in Canada and founded in 2019, Cybin is operational in the USA, U.K., and Ireland.

On Tuesday, November 23, Cybin announced that it has been awarded a grant for a psychedelic treatment clinic at Lenox Hill Hospital “to serve marginalized and underserved communities on the Upper East Side of Manhattan, New York.”

#3: COMPASS Pathways

COMPASS Pathways plc. (NASDAQ: CMPS) is a mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health. The UK-based company is a sector-leading company focused on developing psilocybin-assisted psychotherapies for a number of high-burden mental health disorders.

COMPASS Pathways announced on Tuesday that it had been granted its fifth U.S. patent, which is its 10th patent overall. The new patent covers methods of treating treatment-resistant depression with crystalline psilocybin, as well as with oral dosage forms of crystalline psilocybin with an excipient. The company’s synthesized psilocybin formulation, which is used in its trials and dubbed COMP360, contains crystalline psilocybin.

#4: Awakn

Awakn Life Sciences (NEO: AWKN) (OTCQB: AWKNF) is a biotechnology company with clinical operations, developing and delivering psychedelic therapeutics (medicines and therapies) to treat addiction better. The UK-based company is working to develop and deliver treatments for addictions and substance use disorders (SUDs).

The biotechnology company signed a Memorandum of Understanding (MOU) with Devon Partnership NHS Trust and the University of Exeter to establish an evidence framework for the use of ketamine-assisted psychotherapy as an alternative treatment for Alcohol Use Disorder and treatment-resistant depression within the NHS.