Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Leafly Holdings started the year with strong market performance.
  • Innovative Industrial Properties’ market performance remained robust, following the announcement of significant dividends for 2022.
  • Columbia Care subsidiary is carrying out large-scale cannabis industry layoffs.
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Key Takeaways; Psychedelic Sector

  • Awakn’s ketamine-assisted psychotherapy for the treatment of AUD was ranked as the 5th significant psychedelic milestone in 2022.
  • Atai fell more than 40% after a clinical trial for ketamine therapy failed to meet primary goal.

This week saw the first trading week of the year, and 2023 is anticipated to bring back attention to technological advancements like Web 3.0, the metaverse, and electric/autonomous automobiles. Also, in the mix this year is the much-anticipated federal legalization of marijuana, which will alter the sector and create space for even more significant prospects. Despite the optimistic outlook, analysts have continued to caution investors across various sectors about the risk of growing inflation, which may trigger an economic crisis.

Below is a review of the companies that dominated the news in the cannabis and psychedelic industries during the first week of the year.

Top Marijuana Companies for Week

#1: Leafly Holdings

Leafly Holdings, Inc. (NASDAQ: LFLY) was among the top gainers in the cannabis industry this week, with the stock rising more than 8% on Friday.

Leafly is an online cannabis market. The company links licensed cannabis retailers, brands, and customers through an e-commerce platform. To give customers a smooth delivery experience, Leafly relaunched their delivery gateway in May 2022. Since then, the company has reported that the delivery service has expanded dramatically, particularly in markets where they had previously faced difficulties, like California.

Recently, Leafly, whose income is expected to increase by 19.56% annually, received significant analyst coverage. Analysts believe that the company currently appears to be fairly valued given that it is trading under $1; However, Investors should be warned that a reverse split might be imminent given the stock’s price is below $1. Despite this, the company’s share price has been quite volatile over the previous few months and given that it intends to report its earnings results and forecasted 2023 numbers in March, a significant price increase is possible.

#2: Innovative Industrial Properties

Another top performer this week in the cannabis industry was Innovative Industrial Properties, Inc. (NASDAQ: IIPR). The company, which focuses on the regulated cannabis market in the US, is the first and only real estate company listed on the New York Stock Exchange.

Innovative Industrial Properties has experienced positives investor’s sentiment since announcing strong dividends for the fourth quarter and fiscal year, 2022. In December, the company declared a fourth quarter cash dividend of $1.80 per share of the common stock. Additionally, the company announced $7.10 cash dividends per common share for the fiscal year ending December 31, 2022, which represented a $1.38 or 24% increase over the dividends announced for the fiscal year ending December 31, 2021.

Innovative Industrial Properties is a self-advised Maryland business with the goal of buying, owning, and managing specialized industrial properties that are leased to experienced, state-licensed operators. Numerous properties owned by the corporation are claimed to have a production capability of thousands of pounds of marijuana products annually.

#3: Columbia Care

Green Leaf Medical, a division of cannabis multistate operator Columbia Care Inc. (OTC: CCHWF), announced that it is laying off 73 employees at its production facility in Saxton, Pennsylvania.

In a statement, Columbia Care explained that the layoffs were necessary to fulfill the right supply and demand levels of the market. “We are hopeful that with adult use (cannabis sales) on the horizon, this facility will be back up to full capacity in the future,” New York-based Columbia Care noted. According to paperwork submitted by the company, the dismissals are effective as of February 28.

In December, Florida-based cannabis multistate operator Trulieve Cannabis Corp. (OTC: TCNNF), also terminated employees at its cultivation facility in McKeesport, Pennsylvania.

The act of companies laying off employees has traditionally been seen unfavorably. However, things have shifted across different sectors, and investors now view layoffs favorably because they allow the company to set aside some capital, which could be useful as companies continue to suffer greatly from rising interest rates and the threat of inflation.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF) had a successful year in 2022 thanks to substantial accomplishments in the psychedelic sector. One of these landmarks achievements was the successful completion of the Phase II a/b study. The study aims at establishing a Ketamine-Assisted Psychotherapy for Alcohol Use Disorder, which is one of the treatments with the highest rate of growth in terms of both commercial and scientific success.

Awakn announced positive results from the Phase II A/B study back in January 2022. The company reported that during the study, they had met their primary and secondary endpoints, including 86% abstinence for a 6-month period following treatment and no major side events.

To the company’s delight, Benzinga listed this enormous achievement by Awakn as the fifth-biggest psychedelics news and trends for 2022.

The year 2022 taught us that psychedelic companies are becoming more inventive, which appears to be the greatest way to advance in order to eventually be able to give better therapies for a number of the health problems that humans experience on a global basis. And companies like Awakn, which are already breaking new ground in the industry, will only continue to grow as the general public’s acceptance of psychedelics increases and the government moves toward legalizing them at all levels.

#2: Atai

Atai Life Sciences’ (NASDAQ: ATAI) stock fell more than 40% after the primary endpoint of a phase 2a clinical trial examining the use of ketamine treatment to treat depression was not met.

The company reported that, despite the study showing “signals of efficacy across all timepoints out to two weeks,” the treatment did not result in a statistically significant difference in the participants’ baseline depression level after 24 hours compared to the placebo.

Despite the setback, the company declared that it still intends to use its product. Atai said it will review the PCN-101 data in greater depth in the upcoming weeks. It also said it will work with Perception to determine the program’s next stages, which may include looking for a collaboration.

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