Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector

  • Leafly challenged and triumphed against New York’s marijuana advertisement restrictions.
  • Columbia Care rebranded as The Cannabist Co. and secured $25 million in private placement.
  • Canopy Growth raised $25 million in a private placement offering.

Key Takeaways; Psychedelic Sector

  • Awakn’s CRO, Prof. David Nutt, delivered keynote at The Clinic of Change event.
  • Seelos Therapeutics plummeted over 70% following Phase 2 trial setback, leading to analysts’ downgrade.

It was another eventful week in the cannabis sector as a new cannabis exchange traded fund (ETF) was launched by Subversive Capital Advisor, driven by the anticipation of a possible rescheduling of marijuana by the U.S. government. The ETF’s debut came as cannabis stocks continued to experience a significant upward trajectory, driven by reports that officials from the U.S. Department of Health and Human Services (HHS) had recommended a reclassification of marijuana as a Schedule 3 substance; a shift that would have significant favorable implications for the legal marijuana sector.

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: Leafly

In a legal showdown challenging New York’s ban on third-party marijuana marketing, online cannabis platform Leafly Holdings, Inc. (NASDAQ: LFLY) secured a significant victory, temporarily blocking the enforcement of the restrictions. The lawsuit, filed by Leafly, New York’s Stage One Dispensary, and a consumer, claimed that New York’s Office of Cannabis Management (OCM) unfairly targeted “third-party platforms” like Leafly, hindering the industry and limiting retailers’ ability to market their products effectively.

The court order, which was issued after the New York attorney general’s office agreed to a stay on the enforcement of the contested provisions, specifically exempted Leafly from the restrictions, effectively granting the platform a temporary online cannabis advertising monopoly in the state.

In a press release, Leafly’s CEO, Yoko Miyashita, expressed concerns that the OCM’s stance towards third-party platforms deprived consumers and licensed cannabis retailers of vital tools for navigating the legal cannabis landscape in New York.

“We are very pleased with the order, but remain concerned that the (OCM’s) stance towards third-party platforms deprives consumers and licensed cannabis retailers with important tools that help them navigate legal cannabis in New York state;…We’ll continue to work toward sensible regulations and are hopeful for a solution that empowers small businesses and supports consumer education and choice, while still protecting the public health, safety, and welfare of the people of New York,” Yoko Miyashita said in a statement.

This court victory carries significant implications for Leafly and its financial performance. Despite recent layoffs and strategic shifts towards consumer-focused content, the company reported losses of $1.4 million in Q2 and $5.4 million in Q1 of 2023. The outcome of this legal battle may help Leafly regain its footing in the ever-evolving cannabis industry.

#2: Columbia Care

In a recent move, Columbia Care Inc., a major multistate marijuana operator, rebranded itself as The Cannabist Co., and it’s now officially known as The Cannabist Company Holdings Inc. (OTC: CCHWF). This transformation comes in the wake of the termination of a high-profile merger with rival multistate operator Cresco Labs Inc. (OTC: CRLBF) earlier this year, citing changes in the cannabis industry landscape as the primary reason.

The Cannabist Co., which already boasts 36 cannabis stores under the Cannabist brand, stated that it plans to convert its entire retail portfolio to the Cannabist brand nationwide by 2024. Jesse Channon, CEO of The Cannabist Co., stated, “As we’ve opened Cannabists across the country, it became clear to us that the ethos behind that retail brand represented our company as a whole – a passion for cannabis that we all share and fuels our work every day.”


Shortly before unveiling their new identity, The Cannabist Co. secured a substantial financial boost through a private placement. The company raised an impressive $25 million through the sale of 22.2 million units at C$1.52 each. These units consist of a common share of the company and half of a share purchase warrant, providing the holder with an option to purchase another share at C$1.96 within the next three years.

Furthermore, investors have the option to purchase an additional $25 million worth of units at the same price within 45 days. The company stated that, the proceeds from this private placement will primarily be directed towards reducing the company’s debt and addressing various other business needs, a move that underscores The Cannabist Co.’s commitment to financial stability and growth.

#3: Canopy Growth

In a move that reflects the dynamic and ever-evolving cannabis industry, Canadian cannabis producer Canopy Growth Corporation (NASDAQ: CGC) secured $25 million (33.8 million Canadian dollars) in a private placement offering. This substantial capital injection comes as Canopy Growth continues to experience a notable upswing, primarily fueled by heightened investor enthusiasm due to the potential reclassification of cannabis as a Schedule 3 substance, a change that has the potential to lead to a highly favorable resolution of the 280E tax issue.

The private placement offering involved subscription agreements with institutional investors, resulting in the issuance of approximately 22.9 million units at a price per unit of $1.09. Notably, this price represented an enticing 22% discount from the previous Friday’s closing price, underlining the appeal of this investment opportunity.

Canopy Growth, headquartered in Smiths Falls, Ontario, also granted the investors an over-allotment option, allowing them to acquire up to an additional 22.9 million units. This option, valid until November 2, could potentially generate another $25 million in gross proceeds if fully exercised.

Canopy Growth stated that the primary purpose of raising this capital is to bolster its working capital and support various general corporate initiatives. The closing of the private placement pursuant to the Subscription Agreements is expected to occur on or about September 19, 2023, subject to customary closing conditions.

Top Psychedelic Companies for Week

#1: Awakn

Awakn Life Sciences Corp. (OTC: AWKNF) Chief Research Officer, Professor David Nutt, took center stage as he delivered a keynote presentation at an event hosted by their licensing partner, The Clinic Of Change, this week. The event marked an important milestone in Awakn’s mission to advance psychedelic-assisted therapies and addiction treatments.

In his keynote address, Prof. Nutt shared insights into cutting-edge research and developments in the field of psychedelic medicine. His presentation focused on the promising potential of psychedelic substances, such as psilocybin and MDMA, to revolutionize mental health treatment and address various forms of addiction.

Prof. Nutt’s extensive background in neuroscience and psychopharmacology lent credibility to his remarks. He is renowned for his work in understanding the effects of different substances on the brain, including the risks and benefits associated with their use. His presence at the event underscored Awakn’s commitment to evidence-based approaches in the emerging field of psychedelic therapy.

#2: Seelos Therapeutics

Seelos Therapeutics, Inc. (NASDAQ: SEEL) faced a significant setback as its stock price plummeted by 70% on Wednesday following an unfavorable outcome in a clinical trial. The trial, which involved the company’s investigational psychedelic therapy known as SLS-002, aimed to address suicidal symptoms in adults diagnosed with major depressive disorder. Unfortunately, the Phase 2 trial, which included 147 patients, failed to achieve meaningful results for its primary endpoint.

Seelos attributed the trial’s failure to financial constraints, which prevented them from meeting their enrollment targets. This setback had a profound impact on the company’s stock price, prompting Cantor Fitzgerald to act. Charles Duncan, an analyst at Cantor Fitzgerald, downgraded Seelos from an “Overweight” rating to a “Neutral” one.

Duncan expressed concerns about the company’s financial limitations, which could hinder its ability to effectively conduct and complete similar trials in the future. Additionally, there are uncertainties surrounding how regulatory authorities, particularly the Food and Drug Administration (FDA), will respond to the trial data.

Seelos Therapeutics now faces the challenging task of regrouping and addressing the issues that led to the trial’s failure while navigating the uncertainties of regulatory approval in the future.