Key Takeaways; Cannabis Sector
- Planet 13 sold its marijuana license in Florida to facilitate expansion in the state; the company also announced plans to restate financials.
- The Cannabist Co. initiated a $25 million debt buyback strategy.
- Organigram shareholders overwhelmingly approved C$124M investment from British American Tobacco.
Key Takeaways; Psychedelic Sector
- Awakn successfully completed an investigative study that focused on advanced treatment for alcohol use disorder.
- FDA cleared Cybin for phase 2 DMT study.
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: Planet 13
Planet 13 Holdings Inc. (OTC: PLNH), a Nevada-based marijuana multistate operator, recently completed a strategic move to propel its expansion plans in Florida. The company successfully sold all shares of its subsidiary, Planet 13 Florida, to SGW FL Enterprises LLC, fetching a cash payment of $9 million in return. This transaction involved the transfer of a crucial medical marijuana treatment center (MMTC) license held by the Florida-based subsidiary.
The divestiture of the MMTC license was a crucial step for Planet 13 to advance its planned acquisition of VidaCann, a prominent medical marijuana company in Florida with extensive cultivation facilities and a robust retail network within the state’s medical market. The company stated that the $9 million obtained from the sale will play a pivotal role in facilitating the integration of VidaCann into Planet 13’s operations.
CEO Bob Groesbeck emphasized the significance of this strategic move in the company’s expansion strategy in Florida. “Part of the appeal of this deal is the amazing management team of VidaCann that has built it into the 9th largest Florida cannabis company with limited debt or outside capital. We believe their ability to run lean, efficient operations are a cultural and strategic fit with Planet 13’s company-wide philosophy and operations in other states,” commented Bob Groesbeck.
In a subsequent development, Planet 13 revealed its intention to restate certain financials. The company acknowledged the need to restate annual results for 2021 and 2022, along with quarterly results for the first three quarters of 2023. According to Planet 13, this decision arose from an internal investigation initiated by the company in November, which uncovered the misappropriation of $22 million of the company’s funds. The funds in question were held by the investment firm El Capitan Advisors.
#2: The Cannabist Co
The Cannabist Company Holdings Inc. (OTC: CBSTF), a prominent multistate operator in the marijuana industry, took a significant step towards financial restructuring by announcing a deal to repurchase up to $25 million in principal on senior secured debt through the issuance of shares.
The senior secured convertible notes, slated for maturity in June 2025, carry a 6% interest rate. The potential repurchases, amounting to $25 million, could involve the issuance of approximately 68.6 million shares, as disclosed by The Cannabist Co.
The debt repurchase plan, which was initially announced in September 2023, coincided with a $25 million private placement of units with the same institutional investors.
CEO David Hart expressed satisfaction with the agreement, stating, “We are pleased to have reached agreement on the previously announced transaction to reduce leverage and decrease interest expense, maintaining momentum for our balance sheet improvement plan.”
The Cannabist Co aims to fortify its financial position and build on its balance sheet improvement plan with this strategic move, this after the company has experienced some challenges in recent months. Notably, the company’s’ leadership underwent a change earlier this month, with David Hart taking over as CEO, succeeding co-founder Nick Vita. The company had also had a name change from Columbia Care in September 2023, a decision prompted by the collapse of Columbia Care’s planned mega-merger with Cresco Labs Inc. (OTC: CRLBF).
#3: Organigram
In a significant move that deepens British American Tobacco p.l.c. (NYSE: BTI) ties to the cannabis industry, Organigram Holdings Inc. (NASDAQ: OGI) received resounding approval from its shareholders for a C$124.6 million investment deal offered by a BAT subsidiary. The investment, finalized in a shareholder meeting on January 18, marked a pivotal moment for both companies.
With an overwhelming 96% approval rate, Organigram shareholders embraced the substantial investment from BAT, solidifying the tobacco giant’s financial stake in the Canadian cannabis operator. This investment underscores BAT’s strategic partnership with Organigram, which began Title: Organigram Shareholders Overwhelmingly Approve C$124M Investment from British American Tobacco
The investment deal, which closed last week, grants BAT a total equity of 45% in Organigram, coupled with a 30% ownership position in common voting shares. The funding infusion is expected to be a transformative force for Organigram, according to CEO Beena Goldenberg.
Organigram plans to utilize the capital to expand its international footprint and support additional research and development in the cannabis sector. Specifically, the company said that it will establish a “strategic investment pool” named Jupiter to efficiently deploy funds globally.
Top Psychedelic Companies for Week
#1: Awakn
Awakn Life Sciences Corp. (OTC: AWKNF) achieved a significant milestone in its quest to address Alcohol Use Disorder (AUD). In a recent announcement, the clinical-stage biotechnology company revealed the successful completion of an investigative study evaluating the dissociative effects of a proprietary S-ketamine oral thin film (OTF) formulation.
The study, which involved 28 participants classified as harmful drinkers, demonstrated the potential of Awakn’s S-ketamine OTF to induce dissociative effects, crucial for addiction treatment. The formulation proved well-tolerated with no serious adverse effects reported. Importantly, participants experienced a notable reduction in alcohol cravings compared to the placebo group.
This achievement followed Awakn’s strategic partnership with LTS Lohmann Therapie-Systeme AG, which granted Awakn global exclusivity for the use of its S-ketamine OTF in addiction, anxiety disorders, and eating disorders treatment.
Awakn designates this program as AWKN-002. And the company stated that this program, which combines the S-ketamine OTF with manualized relapse prevention cognitive-behavioral therapy (CBT) will target the US market for AUD treatment. This will complement the existing AWKN-001 program, which focuses on Severe AUD treatment in the UK market using intravenous racemic ketamine and manualized relapse prevention CBT.
Prof. Celia Morgan, the principal Investigator on the study, remarked on this significant milestone, “The rapid onset and offset of action of AWKN-002 and the ease of clinical use observed in our investigative study compared to IV ketamine has galvanized our view that this represents a way to dramatically widen access to ketamine treatment. AWKN-002 means that we may reach more of the patients that desperately need this life-saving addiction treatment”.
Looking ahead, Awakn plans to engage with the US Food and Drug Administration for a pre-IND meeting, marking a pivotal step towards advancing AWKN-002 through late-stage clinical trials.
#2: Cybin
Cybin Inc. (NYSE: CYBN), received clearance from the U.S. Food and Drug Administration (FDA) for its investigational new drug (IND) application for CYB004, a proprietary deuterated dimethyltryptamine (DMT) molecule. The clearance marked a significant milestone in Cybin’s efforts to develop innovative treatments for Generalized Anxiety Disorder (GAD).
The FDA’s approval allows Cybin to proceed with its Phase 2a study of CYB004, slated to commence in the first quarter of 2024. According to the company, this study will be a randomized, double-blind, active-controlled trial conducted at various sites across the United States. Its primary objective is to evaluate the preliminary clinical efficacy, safety, tolerability, pharmacokinetics, and pharmacodynamics of CYB004 in individuals suffering from GAD.
With the FDA clearance and positive Phase 1 results, Cybin aims to advance the development of CYB004 as a potential therapeutic option for Generalized Anxiety Disorder. The company continues to explore the safety and efficacy of deuterated DMT molecules, with a focus on addressing mental health conditions such as anxiety and depression.
