Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Canopy Growth bought California-based Jetty Extracts for $69 Million.
  • Schwazze Q1 revenue surged 64% to $31.8 million; The company also bought Denver cannabis retailer grower for $3.2 million.

Key Takeaways; Psychedelic Sector

  • Awakn completed world’s first ketamine study for behavioral addictions; The company also appointed new Chief Medical Officer.

It was another busy week for the legal cannabis industry, with more companies releasing their quarterly financial results. And, as more companies continue to release positive earnings reports, the trends and data, points to the cannabis industry’s continued growth. Also, despite the recent challenges that the global markets have faced, some companies in the sector are moving on with their expansion plans with more acquisitions. Below is a recap of the top companies that dominated the headlines with positive news.

Top Marijuana Companies for Week

#1: Canopy Growth

Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced on May 18, 2022, that it had entered into a definitive agreement to buy Lemurian, Inc., better known as Jetty Extracts, a California-based producer of high-quality cannabis extracts and pioneer of clean vape technology. The agreement gives Canopy Growth the right to acquire 100% of Jetty’s outstanding capital stock, subject to federal THC permissibility in the United States.

Under the agreements terms, Canopy Growth will make aggregate upfront payments of approximately USD$69 million in cash and Canopy Growth common shares; majority of which will be Canopy Growth common shares. The deal is however subject to certain adjustments.

Jetty is a top 10 cannabis brand in California, as well as a top 5 vape brand. The privately held company has pioneered the path for the most authentic and natural vape experience available to consumers, thanks to award-winning technology. Additionally, in the extremely competitive California cannabis industry, Jetty has achieved strong growth over the past two years while generating positive EBITDA as a leader in solvent-less vaping and a pioneer of extraction-related intellectual property. Jetty also founded and operates The Shelter Project, a need-based organization that has given cancer patients over $1 million in free cannabis products.

This deal present Jetty with prospective chances to work across Canopy’s powerful U.S. THC ecosystem that already includes the right to acquire both Acreage Holdings, Inc. (OTC: ACRHF), and Wana Brands, as well as a major conditional ownership stake in TerrAscend Corp. (OTC: TRSSF). The two companies are also looking into ways for Jetty to bring its brand and innovative brand portfolio to the Canadian recreational market in order to fully realize Jetty’s industry-leading IP’s North American cross-border potential.

#2: Schwazze

Medicine Man Technologies, Inc. (OTC: SHWZ) also known as Schwazze, announced financial results for the first quarter ended March 31, 2022, on May 16, 2022. Revenues for Q1 2022 totaled $31.8 million, including $26.5 million in retail sales, $5.2 million in wholesale sales, and $0.04 million in other operating revenues. Compared to $19.3 million in Q1 2021, this represented a $12.4 million or 64% increase. The higher sales were attributed in significant part to additional dispensary sales, with the company acquiring fourteen new retail dispensaries in Q1 2022.

Furthermore, the company stated that its 2022 guidance is unchanged. The guidance, which is for a fourth-quarter 2022 (Q4 2022) annualized run rate, indicates that revenue is expected to be in the range of $220 million to $260 million, and adjusted EBITDA is expected to be in the range of $70 million to $82 million.

In addition to announcing the first quarter financial results, Schwazze also announced that it had signed a $3.2 million agreement deal to acquire assets of Urban Health & Wellness, a cannabis retailer and cultivator in Denver. According to a news release, the proposed deal comprises Urban’s dispensaries as well as a 7,200-square-foot indoor cultivation facility with 2,700 square feet of canopy. Under terms of the deal, Schwazze will pay $1.3 million in cash and $1.9 million in shares upon the closure of the purchase.

The proposed acquisition is the latest in a string of maneuvers by Schwazze, which has acquired cannabis assets, including retail stores and cultivators in Colorado and New Mexico. The company also stated that after the purchase is completed, it’s portfolio will include 23 cannabis retail stores and four grow operations. Additionally, the company also said that it had acquired final permission from the NEO Exchange in Toronto to list its common shares.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company focused on researching, developing, and commercializing therapeutics to treat addiction with a near-term focus on Alcohol Use Disorder (AUD), announced on May 19, 2022, the completion of the world’s first ketamine treatment study for behavioral addictions. Gambling Disorder, Internet Gaming Disorder, Binge Eating Disorder, and Compulsive Sexual Behavior were among the behavioral addictions studied.

Prof. Celia Morgan, Awakn’s Head of Ketamine-Assisted Therapy, Professor of Psychopharmacology at the University of Exeter in the United Kingdom, and an internationally recognized expert in the therapeutic use of ketamine, led the study. The study looked into ketamine as a potential new treatment for behavioral addictions by allowing the brain to make new connections and alter behavior.

Awakn stated that the study’s findings suggest that the desired benefits are being achieved through potentially unique pathways, and that the findings warrant a bigger study and further investigation, which it is currently undertaking. Awakn also said that the study backs up the company’s IP strategy and existing patent applications, therefore establishing the company as a leader in the behavioral-addiction treatment research and development market.

Moreover, Awakn also announced that Dr. Arun Dhandayudham will join the company as Chief Medical Officer. The company said that Dr. Ben Sessa will step back from his role as CMO to become the company’s Head of Psychedelic Medicine, therefore allowing him to continue his work in research, academic and training activities, as well as a greater focus on the day-to-day treatment of his clients as the Lead Physiatrist for Awakn Clinics Bristol.

According to Awakn, Dr. Dhandayudham, who’s a Consultant in Addictions Psychiatry since 2005 and a graduate of Oxford and Cambridge, will add a lot of clinical and leadership expertise to the company. Dr. Dhandayudham is currently the Executive Medical Director of WDP, a prominent third-sector organization that provides drug and alcohol support and treatment services throughout the UK, where he previously served as joint CEO. In addition, he was also the Clinical Director of NHS Addiction Services in Bedfordshire and Northamptonshire, as well as the Clinical Lead for the Crime Reduction Initiative (CRI).