Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Tilray soared more than 30%; the company relaunched its medicinal cannabis oral solution in Ireland; and reported a 10% revenue increase for the first quarter of fiscal year 2023.
  • Aurora repurchased debt worth $23 million.
  • Curaleaf completed purchase of Tryke for $181 million; the stock skyrocketed 33%.
  • WM Technology received a consensus ‘moderate buy’ rating from analysts as the stock surged 64%.
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Key Takeaways; Psychedelic Sector

  • Analyst Patrick Trucchio from H.C. Wainwright & Co. reiterated a $10 buy rating for Awakn shares.

The cannabis sector had a terrific week, with stocks surging on numerous exchanges late on Thursday afternoon after President Biden unexpectedly announced that he would pardon thousands of people who had been found guilty in federal court of possessing marijuana for personal use. In addition, the President pledged to launch a review of the plant’s classification under the Controlled Substances Act, which could result in a potential change in the drug’s federal classification. At the moment, marijuana is listed as Schedule 1 substances, alongside drugs like heroin.

President Biden said in a statement, “we classify marijuana at the same level as heroin – and more serious than fentanyl. It makes no sense. Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

The announcement made by President Biden was seen as one of his first significant steps toward decriminalizing marijuana, thus fulfilling his campaign promise to nullify earlier federal possession convictions and start the process of potentially reducing the drug’s legal categorization. The federal decriminalization of marijuana will undoubtedly be a key development for the global legal cannabis industry.

Below is a review of the top companies in the cannabis and psychedelic industries that dominated the news this week.

Top Marijuana Companies for Week

#1: Tilray

Tilray Brands, Inc. (NASDAQ: TLRY) stock rallied more than 30% on Thursday afternoon. TLRY shares saw the first boost in bullish trading in months as a result of the U.S. President move to pardon thousands of citizens charged federally with simple possession of marijuana. This significant gain was the biggest one-day moves the marijuana stock has seen this year.

This week, the company announced the relaunch of its medicinal cannabis oral solution in Ireland, which is covered by the nation’s Medical Cannabis Access Program. Denise Faltischek, Chief Strategy Officer, and Head of International Business at Tilray Brands, said, “We are extremely proud to relaunch in Ireland with an expanded footprint. The MCAP reimbursement approval is a tremendous step in providing patients with greater access to Tilray’s high-quality medical cannabis products that address their needs. We remain dedicated to do our part to increase access for patients in need around the world.”

Additionally, the company announced its financial result for the first fiscal quarter that ended on August 31, 2022. According to the released financial figures, Tilray’s first quarter cannabis sales for the fiscal year 2023 increased 10% sequentially to $58.6 million, further confirming the company’s position as a world leader in the cannabis industry.

#2: Aurora

Aurora Cannabis Inc. (NASDAQ: ACB), a Canadian marijuana company, trimmed its debt by repurchasing convertible senior notes valued at about 31.3 million Canadian dollars ($23 million). According to a Friday morning press release, Aurora paid CA$29.8 million in cash to repurchase some of the notes, representing a 5.45% discount from the notes’ par value.

The Edmonton, Alberta-based producer said it repurchased the notes “to reduce the company’s debt and annual cash interest costs” and will save approximately CA$11.9 million in annual cash interest savings from note buybacks “made from Q3 2022 onwards.”

In June, Aurora repurchased roughly $20 million of the same senior convertible notes. The 5.5% senior convertible notes were originally issued in early 2019 and raised $345 million. According to the terms of agreement, the notes will mature in February 2024.

Aurora stock price also soared on Thursday as President Biden’s comments on marijuana sparked a little more optimism in the industry. During regular trading, Aurora’s price rose from roughly $1.20 per share to over $1.30 per share.

#3: Curaleaf

Curaleaf Holdings, Inc. (CSE: CURA) (OTC: CURLF) was one of hottest cannabis stocks on Thursday, following the pro-cannabis news from President Joe Biden. With a market valuation of more than $4 billion, CURLF stock has grown to become one of the most valuable marijuana plays. Curaleaf surged 33% on Thursday, with shares closing at $6.19 per share.

The cannabis multistate operator announced that it had completed the previously announced acquisition of Arizona-based Tryke Companies for a total of $181 million in cash and stock. As a result of the decline in the value of Curaleaf’s stock, the effective price was reduced from $286, which was the agreed amount when the deal was announced in November last year.

Curaleaf is based in Massachusetts and is listed on the Canadian Securities Exchange (CSE). Federal legalization of marijuana would mean that the company could list its shares on a U.S. stock exchange, which will eventually attract more investors. For now, unless you’ve got access to the CSE, you’ll have to buy its shares over the counter.

With vertically integrated operations in 21 states, including Massachusetts, New York, and Florida, Curaleaf is one of the biggest MSOs in the country. With federal legalization, its income will only increase. Additionally, the company has established a foothold in the German market thanks to the recent completed 55% ownership in Four 20 Pharma GmbH, one of the top medical marijuana manufacturers in the Germany. By early 2024, marijuana for adult use is anticipated to be legal in Germany.

#4: WM Technology

Although WM Technology, Inc. (NASDAQ: MAPS) is a smaller-cap stock, it attracted a lot of attention on Thursday after President Biden made pro-cannabis statements. As a result, the stock increased by nearly 64%, closing at $2.65 per share on Thursday.

It’s critical to comprehend the ownership structure of the company in order to determine who is actually in charge. In the case of WM Technology, institutional investors own a respectable stake in the company, 70.66%, making them the group with the largest share. This suggests that the stock has been examined by the analysts working for those institutions, and they like it. But they could be mistaken, just like anyone else.

Nevertheless, a number of research analysts have recently made favorable remarks about MAPS shares, indicating that they anticipate the stock will continue to increase and that the growth will hasten once marijuana is decriminalized.

Top Psychedelic Companies for Week

#1: Awakn

According to a research note by H.C. Wainwright & Co. analyst, Patrick Trucchio, Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF) is one of the best-positioned companies to benefit from the strong potential of psychedelics in alcohol use disorder (AUD), a market that is estimated to be worth more than $20 billion globally.

In an investment report that was published on H.C. Wainwright & Co. BlueMatrix research library, Trucchio said, “with a potential addressable patient population in Western markets that exceeds 30 million people and with 10% or less of these patients in active treatment, the unmet medical need and opportunity for innovative approaches to treatment is very high. As such, we believe the potential for psychedelics with therapy to ameliorate AUD could represent a significant opportunity for drug sponsors, which is highly underappreciated by investors.”

In his research report, Trucchio discussed about Awakn and Cybin Inc. (NYSE: CYBN), two publicly traded biopharma firms based in Canada that have considered psychedelic therapies to treat AUD. In addition, he reiterated his buy ratings for Awakn stock, stating that the stock is worth an estimated $10 per share, which would be a robust increase from the current price.

In addition to MDMA therapy for AUD, Awakn is researching the use of the NMDA receptor antagonist, ketamine, in combination with psychotherapy to treat various addiction disorders. On the other hand, Cybin is currently examining deuterated psilocybin, or CYB003, as a treatment for severe depressive disorder.

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