Key Takeaways; Cannabis Sector

• Verano announced new appointments to its board of directors.
• Tobacco giant Philip Morris is acquiring Israeli cannabis company in a $650 million deal.

Key Takeaways; Psychedelic Sector

• Awakn announced the launch of a special Portugal license partner in Lisbon.
• Psychedelic drug developer Filament Health poised for NASDAQ listing through $210 million SPAC agreement.
• Numinus Wellness reported 713.3% revenue growth in the Q3 2023 financial results.

Below is a weekly roundup on the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.

Top Marijuana Companies for Week

#1: Verano Holdings

Verano Holdings Corp. (OTC: VRNOF), a leading multi-state cannabis company, recently made a significant announcement regarding changes to its Board of Directors. On July 20, 2023, the company appointed John Tipton, President of the Southern Region, and Charles Mueller to join its esteemed Board.

This strategic move came alongside the retirement of Mike Smullen, a long-standing contributor to the company. According to Verano, the new appointments are expected to strengthen the Board’s skillset and expertise, further supporting the company’s mission of providing high-quality cannabis products and exceptional hospitality to its growing patient and consumer base.

John Tipton’s association with Verano began in February 2021 when he served as the Chief Executive Officer of Plants of Ruskin, LLC. This company later became a subsidiary of Verano upon its acquisition, marking the company’s entry into the flourishing Florida cannabis market. During his tenure, Tipton demonstrated exceptional skills in accounting, finance, agriculture, and construction, which were instrumental in shaping the company’s growth and success. In June 2023, he was promoted to President of the Southern Region, further solidifying his crucial role within Verano.

On the hand, Charles Mueller brings an impressive tax and accounting background to the Verano Board of Directors. His career spans over 35 years, with a substantial portion spent at PepsiCo, Inc., where he held various senior tax roles, including Vice President, State and Local Tax of the PepsiCo Corporate Division.

Verano Holdings Corp.’s Founder and Chief Executive Officer, George Archos, expressed his satisfaction with the new appointments, acknowledging the significant contributions of both John Tipton and Charles Mueller to the company.

#2: Philip Morris

Tobacco industry behemoth Philip Morris International Inc. (NYSE: PM), renowned for its Marlboro cigarettes, is set to venture into the cannabis market with an ambitious investment. The company is poised to spend up to $650 million to acquire an Israeli cannabis firm specializing in metered-dose inhalers for pain management.

The target of Philip Morris’ interest is Syqe Medical, an innovative Israeli cannabis company. According to reports, the acquisition will proceed in stages. The first stage will involve Philip Morris making a $120 million investment in Syqe Medical. Interestingly, this is not the company’s first involvement with Syqe; it had previously backed the Israeli firm with a $20 million investment in 2016.

The deal’s success hinges on Syqe Medical’s ability to navigate through clinical trials in the United States and receive approval from the U.S. Food and Drug Administration (FDA). If these milestones are achieved, Philip Morris has committed to purchasing all of Syqe Medical’s shares for a staggering $650 million. The acquisition will be conducted through Philip Morris’ subsidiary, Vectura. Should the deal be finalized, it is anticipated to catapult Syqe Medical into one of the world’s largest marijuana companies, cementing its position in the global cannabis industry.

The move by Philip Morris to invest in the cannabis sector does not come as a surprise, as the company has been hinting at its interest in marijuana-related business opportunities for several years. This strategic move is in line with an increasing trend among large tobacco companies exploring opportunities within the cannabis space.

In 2018, Altria Group, Inc. (NYSE: MO), another major player in the tobacco industry, made significant strides into the cannabis market with a whopping $1.8 billion investment in the Canadian company Cronos Group Inc. (NASDAQ: CRON). Similarly, in 2019 British tobacco company Imperial Brands PLC (OTC: IMBBY) also joined the race by investing $93.4 million in the Canadian cannabis firm, Auxly Cannabis Group Inc. (OTC: CBWTF).

Philip Morris’ substantial investment in Syqe Medical has the potential to bring about significant changes in the cannabis industry. If the acquisition is successful, Syqe will gain access to extensive financial resources and global distribution networks, enabling it to expand its product reach to new markets. Moreover, this move could signal increased interest from other major tobacco companies to explore opportunities in the cannabis sector, leading to further investments and partnerships in the marijuana space.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF), announced that their exclusive Portugal license partner, The Clinic of Change, had recently opened its doors in the vibrant city of Lisbon, bringing the revolutionary Ketamine-Assisted Psychotherapy (KAP) treatment to individuals seeking relief from various mental health disorders.

Ketamine, a well-known anesthetic, has recently garnered attention for its antidepressant properties. Traditionally used in surgical settings, ketamine’s unique effect on the brain has demonstrated the potential to combat depression, anxiety, PTSD, and other mood disorders. Through a carefully administered dose of ketamine in conjunction with psychotherapy sessions, Awakn’s Ketamine-Assisted Psychotherapy aims to provide rapid relief and promote profound emotional healing.

Awakn’s introduction of Ketamine-Assisted Psychotherapy to Lisbon through its exclusive Portugal license partner, The Clinic of Change, represents a significant advancement in mental health care. This revolutionary treatment option holds the promise of rapid relief, enhanced therapeutic insights, and newfound hope for individuals grappling with mental health challenges.

#2: Filament Health

In a groundbreaking move for the psychedelic drug industry, clinical-stage drug development firm Filament Health Corp. (OTC: FLHLF) and special purpose acquisition company Jupiter Acquisition Corporation (NASDAQ: JAQC) recently announced a definitive agreement to merge. The merger will result in the creation of a new public company that is expected to be listed on the Nasdaq exchange.

The deal, which was announced on Wednesday, July 19, 2023, values Filament at $176 million or $0.85 per share, and it brings the pro forma enterprise valuation of the combined entity to approximately $210 million. The deal is anticipated to close in the fourth quarter of this year and is expected to provide the combined company with at least $5 million of net proceeds.

This strategic merger is set to propel Filament’s botanical psychedelic drug development platform to new heights. Benjamin Lightburn, CEO of Filament, expressed his enthusiasm about the partnership, emphasizing that it will give the company access to the broader capital markets necessary to advance their drug development initiatives. Lightburn stated, “Filament was founded on the belief that standardized, naturally-derived psychedelic medicines can improve the lives of millions of people suffering from treatable conditions. Partnering with Jupiter brings us a step closer to making this a reality.”

Jupiter CEO James Hauslein also echoed the excitement, praising Filament’s “novel” approach to psychedelic drug development, which involves utilizing natural botanical extracts. The collaboration between the two companies aims to leverage their respective expertise and resources to accelerate the development of effective psychedelic treatments for various medical conditions.

The proposed merger has received approval from both companies’ boards, with Filament’s board receiving a fair opinion from independent financial advisor Evans & Evans, Inc. However, the transaction is still subject to regulatory approval, court orders from the Supreme Court of British Columbia, and the consent of Filament’s security holders and Jupiter’s stockholders. To increase the likelihood of approval, directors and management of Filament, who collectively own approximately 42.8% of outstanding common shares, have committed to voting in favor of the merger.

#3: Numinus Wellness

Numinus Wellness Inc. (OTC: NUMIF), a mental health care company specializing in evidence-based psychedelic-assisted therapies, recently announced impressive financial results for the third quarter ending on May 31, 2023. The company’s revenue surged by a remarkable 713.3% year-over-year, reaching $6 million, and showed a substantial growth of 12.6% from the previous quarter.

According to the company, a significant factor contributing to this success was the gross profit, which saw an extraordinary increase of 1051.6% from the same quarter last year, amounting to $2.1 million. However, it’s essential to note that during the quarter, Numinus incurred $600,000 in one-time expenses due to staff reductions and operational realignment. As a result, the company reported a net loss of $7.2 million for the quarter.

Despite the net loss, Numinus remains financially well-positioned, boasting $13 million in cash reserves as of May 31, 2023. This stability is a positive sign for the company as it positions itself to capitalize on the opportunities emerging in the psychedelics sector.