Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Institutional mortgage REIT AFC Gamma committed $82.5 million for Florida marijuana MSO Bloom Medicinals.
  • Decibel announced Q4 results with strong revenue growth and sixth period of consecutive positive adjusted EBITDA.
  • Red White & Bloom took steps to enhance its financial position.

Key Takeaways; Psychedelic Sector

  • Mindset Pharma strengthened its portfolio by filing a new provisional patent application for its Next-Generation DMT and 5-MeO-DMT drug candidate compounds.
  • Awakn provided shareholders with a business update on its 3 ketamine-assisted therapy clinics.

Top Marijuana Companies for Week

#1: AFC Gamma

Cannabis real estate lender AFC Gamma, Inc. (NASDAQ: AFCG) announced a senior secured credit facility worth up to $82.5 million for Florida-based multistate marijuana company Bloom Medicinals, which is a family-owned company with three cultivation facilities, two processing facilities, and 12 dispensaries. AFC Gamma stated that the facility is secured by first-lien mortgages on Bloom’s real estate properties and other commercial security interests.

According to a news release issued by AFC Gamma on Thursday April 21, 2022, Bloom aims to use the funds from the new credit facility to settle existing debt, finance development activities, acquire a Level 1 Cultivation license in Ohio, and provide extra operating capital.

AFC Gamma also said that, Bloom’s five Ohio medical marijuana dispensaries would benefit from the cultivation facility and the acquisition would make Bloom’s Ohio operations vertically integrated.

AFC Gamma, which is situated in West Palm Beach, Florida, recently announced that it was refinancing two outstanding debts with Bloom, which is based in Boca Raton, a city on Florida’s southeastern coast. In addition, AFC Gamma recently announced $46.4 million in loans to other cannabis companies.

The lender reported $419.2 million of loan commitments as of the end of 2021. The company’s shares trade on the NASDAQ exchange as AFCG.

#2: Decibel

On April 22, 2022, Decibel Cannabis Company Inc. (TSXV: DB) (OTC: DBCCF) released its audited financial results for the fourth quarter and year ended December 31, 2021. Decibel’s net revenue increased 5% sequentially to $14 million in the fourth quarter, which was a 23% rise compared to the same period in 2020. Moreover, the Calgary, Alberta-based company recorded its third straight growth in quarterly net sales in 2021, with annual sales of CA$52.5 million.

In addition to the growing cannabis sales, the company also reported a net profit of 1.7 million Canadian dollars ($1.3 million) for the fiscal year 2021 and a positive adjusted EBITDA of CA$7.4 million.

Despite Decibel having positive financial results, competitors suffered significant declines in cannabis sales over the same period of time. Unlike its larger and better-funded rivals Tilray Brands, Hexo Corp., and Canopy Growth Corp., Decibel stated on Friday that it has increased its market share in the past six months, rising from around 4% last summer to around 5% in March 2022, which is also better than Cronos and Aurora Cannabis.

According to Decibel, the launch of Decibel’s new infused pre-roll lines, as well as continuous growth in demand for flower, vape, and concentrate products, contributed to the 5% increase in revenues over the previous quarter. However, price compression in the floral market and slower retail sales due to greater competition had a negative impact.

In the first-quarter 2022 business outlook, Decibel forecasts net revenue to reach between $16.5 and $17.5 million in the first quarter of 2022, up from $12.6 million in the first quarter of 2021. Additionally, the company expects to end the quarter with a record 4.0% recreational national market share.

#3: Red White & Bloom

Red White & Bloom Brands Inc. (CSE: RWB) (OTC: RWBYF) announced on April 20, 2022, that it had completed a number of restructuring and operational decisions that are intended at strengthening the balance sheet and reducing costs significantly in 2022. The measures taken include, selling the Illinois property, paying off $51.7 million in debt, decreasing manpower, and focusing on its own brands.

According to the Toronto-based company, these moves strengthen its balance sheet by removing $115 million in liabilities and over $22 million in yearly expenses. As a result, Red White & Bloom expects to have a positive EBITDA before the end of the year.

One of the moves by the company include, selling its Granville, Illinois, cultivation facility for $56.1 million to New Branches of California. Moreover, the company plans on paying off $51.7 million of secured debt, a move that will eliminates $6.3 million of annual interest. The company also announced that it was aiming to save more than $2.5 million through reductions in workforce, suppliers and consultants; however, the exact employee head-count reductions weren’t announced. In addition, the company also stated that it was working on eliminating $60 million in future royalty payments by streamlining brands.

Red White & Bloom still has operations in Illinois as well as Arizona, California, Florida, Michigan and Oklahoma. In addition, the company recently completed the acquisition of a marijuana company in Michigan.

Top Psychedelic Company for Week

#1: Mindset Pharma

On April 19, 2022, Mindset Pharma Inc. (CNSX: MSET) (OTC: MSSTF), a drug discovery and development company focused on developing optimized and patentable next-generation psychedelic medicines to treat neurological and psychiatric disorders with unmet medical needs, filed a new provisional patent application that covers new chemical entities (NCEs), which expands the Company’s next-generation DMT and 5-MeO-DMT platform that is currently in the development stage.

This latest patent application demonstrates Mindset’s corporate objective to expand the therapeutic psychedelic toolkit for patients with mental health disorders who are waiting for transformative drugs.

Mindset has a large IP footprint in the psychedelic sector, with novel chemical entities in development that mirror the functioning of first-generation psychedelic drugs while also having enhanced pharmacological and safety profiles to suit a variety of in-clinic needs.

On its patent-pending new compounds, the company performs a differentiated battery of highly specialized in-vitro and in-vivo testing to choose the best psychedelic medication candidates for human clinical trials.

#2: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company dedicated to researching, developing, and delivering revolutionary therapeutics to treat addiction, provided shareholders with an update on its three fully operational ketamine-assisted therapy clinics, two in the United Kingdom and one in Norway. Below is a breakdown report on the three clinics.

Awakn Clinics Bristol was Awakn’s and the UK’s first medical psychedelic-assisted therapy clinic. The clinic began in the fourth quarter of 2021 and is currently in its sixth month of operation, with high demand for both its evidence-based ‘KARE’ protocol for the treatment of AUD and its ketamine-assisted therapy for the treatment of depression, anxiety, PTSD, and eating disorders.

Awakn Clinics Oslo (previously Axonklinikken) was bought by Awakn in late 2021 and is one of the premier ketamine-assisted therapy clinics in the Nordics. Awakn completed the integration of Axonklinikken into its clinic network in the first quarter of 2022, and the clinic was officially rebranded as Awakn Clinics Oslo in March 2022. Clients from all over Norway can now receive Awakn’s evidence-based ‘KARE’ and ketamine-assisted therapy at Awakn Clinics Oslo.

After getting regulatory approval to begin operations in March 2022, Awakn Clinics London, which is Awakn’s flagship facility, was officially opened and is now, treating clients. It, like the other of Awakn’s clinics, provides evidence-based therapies for a variety of mental diseases and addictions.

Dr. Ben Sessa, Awakn’s Chief Medical Officer, said; “To have three clinics operational and delivering ketamine-assisted therapy in such a short space of time is hugely gratifying.” He also said that the clinics provide a fantastic potential for Awakn’s growth, and he believes this is due to the fact that Awakn serve a broad group of people who have struggled to find an effective therapy for their sickness.