Key Takeaways; Cannabis Sector

• Canopy Growth’s Q2 revenue increased sequentially by 7% to C$118 million.
• Aurora’s stock price increased significantly, despite decline in sales.
• Green Thumb beat projections and generated record Q3 revenue and adjusted EBITDA.
• Village Farms reported a growth in cannabis sales.

Key Takeaways; Psychedelic Sector

• Awakn signed its first licensing partnership agreement in New York, and its third overall, in North America.

The overall markets had a massive bounce this week after the release of lower-than-anticipated consumer price index (CPI) figures for October. As a result, many stocks had their largest one-day gain in two years. Additionally, it is earnings season for the third quarter, a crucial period for companies, especially cannabis stocks.

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: Canopy Growth

Shares of Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) surged by almost 9% in early Wednesday trading after the company reported figures that demonstrated growing demand for its ventures. Canopy’s stock price ultimately had two additional significant increases on Thursday and Friday, with the stock closing up by more than 10% on Friday.

On Wednesday, November 9, Canopy announced its financial results for the second quarter that ended on September 30, with net revenue for the quarter being C$118 million, up 7% from the $110 million in revenue for the first quarter.

Canopy attributed this gain to BioSteel, one of its non-cannabis ventures that distributes sports and health drinks. According to the company, improved sales at Canopy’s BioSteel division, helped in offsetting the effects of greater competition in the Canadian recreational cannabis industry as well as the impact of divestitures.

“We delivered solid sequential quarterly net revenue growth and improved margins, led by another record quarter for BioSteel, the stabilization of our Canadian cannabis business, and continued actions to reduce overall costs,” said Canopy Growth’s CFO, Judy Hong.

#2: Aurora Cannabis

Another significant gainer in the cannabis industry this week was Canadian cannabis powerhouse Aurora Cannabis Inc. (NASDAQ: ACB), whose stock price ended the week up over 16%. This was despite the company reporting that net revenue for the quarter ending September 30 was CA$49.3 million, down 2% from the previous quarter and down 18% from the same quarter a year before.

In medical marijuana, where Aurora has refocused its business on, the company reported a net revenue of CA$31.6 for the quarter. This sum includes the CA$8.2 million in medical cannabis sales to nations outside of Canada. In addition, adult-use cannabis sales brought in a total of CA$13.7 million, an increase of 9% over the previous quarter.

Aurora stated that the slight decrease in revenue was negatively affected by the supply and ordering disruptions from a cyberattack at the Ontario Cannabis Store and store closures due to the labor strike in British Columbia.

Regarding expectations for the second quarter of fiscal 2023, the company said that it aims to achieve its target of profitability for adjusted EBITDA by December 31, 2022. Aurora also estimates cannabis revenue for fiscal Q2 2023 to be broadly similar to fiscal Q4 2022, after resolving the negative problems that affected their European medical and Canadian consumer business units.

#4: Village Farms

For the third quarter that concluded on September 30, Village Farms International, Inc. (NASDAQ: VFF), which develops and sells cannabis products in Canada, generated net income of CA$200,000 and positive adjusted EBITDA of CA$6.7 million. This was a notable net income in a Canadian cannabis market, where government-owned companies have received the majority of profits so far.

According to the company’s earnings release, Pure Sunfarms in British Columbia and Rose LifeScience in Quebec increased their combined market share to the top spot in Canada in October. Moreover, Village Farms also stated that Pure Sunfarms maintained its No. 1 market position for dried flower in Canada in the quarter.

“The strong performance in our Canadian cannabis business in the third quarter reflects the successful execution of our growth strategy and investments as we achieved another sales record, outstanding growth in retail sales, and our 16th consecutive quarter of positive adjusted EBITDA,” Village Farms CEO Michael DeGiglio said in a press release.

The CEO also stated that the company is progressing toward commencing shipments to Germany and Israel, as the company continue to steadily move forward on multiple opportunities in select additional markets internationally.

#3: Green Thumb

Green Thumb Industries Inc. (OTC: GTBIF), one of the largest multistate cannabis operators in the U.S., reported earnings results that exceeded analysts’ estimates.

In regard to a recent decline in profitability across the sector, the company’s record revenue shows a growing market for its cannabis products. The Chicago-based cannabis firm that owns RISE Dispensaries released its financial statistics for the third quarter that ended on September 30.

The company reported third-quarter revenue of $261.2 million, up 2.7% sequentially and up 11.8% from the prior-year period. This beat the Yahoo Finance average analyst estimates of $257.3 million. In addition, Green Thumb posted net income of $9.8 million, versus $20.2 million during the same time last year. The company said that the reduction in net income of $10.4 million was due primarily to favorable fair value adjustments to the company’s warrant liability.

“We are proud to report record revenue and adjusted operating EBITDA for the quarter against a backdrop of higher inflation and greater economic uncertainty,” chairman and CEO Ben Kovler said. “As we near the end of 2022, we are optimistic about the future of the U.S. cannabis market and proud of Green Thumb’s leadership position in the industry.”

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), announced that it had signed its third Licensing Partnership agreement in North America. The deal is with Nushama, which is a leading network of ketamine-assisted therapy clinics that is committed to resolving an escalating mental health crisis with the use of psychedelics.

The two companies will collaborate to bring Awakn’s ketamine-assisted therapy for Alcohol Use Disorder (AUD) to Nushama’s clinic in New York City. In accordance with their agreement, Awakn will give Nushama access to its proprietary therapeutics and train its practitioners; in exchange, Nushama will pay Awakn an annual fee as well as a revenue share for each treatment.

Awakn’s proprietary treatment protocol was developed and validated at the beginning of this year during a Phase II A/B clinical trial. This was the first controlled trial to evaluate ketamine-assisted therapy as a treatment for AUD, and the results showed that it was much more effective than the current standard of AUD treatments.

Commenting on the company’s licensing agreement with Nushama, Awakn CEO Anthony Tennyson said, “We are very excited to partner with Nushama and their exceptional team, who are leaders in ketamine-assisted therapy in one of the world’s largest markets with a high volume of people being treated. Expanding our U.S. reach to include such an important market as New York City, with planned expansion across the Northeast region, is a major milestone for our program…together we will deliver a more efficacious and cost-effective treatment to the growing number of people who so desperately need it.”