Key Takeaways; Cannabis Sector

• Organigram secured CA$41.5 million in second investment tranche from British American Tobacco.
• Jushi Holdings filed for CA$350 million shelf offering.
• Massachusetts social equity advocates are demanding investigation into Ascend Wellness over cannabis license violations. 

Key Takeaways; Psychedelic Sector

• Awakn filed new patent for ‘promising’ psychedelic compounds to treat PTSD.
• GH Research faced continued losses in the second quarter, amid efforts to lift FDA hold on GH001.

Below is a weekly roundup of what happened this week in 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: Organigram

Canadian cannabis producer Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) announced that it had successfully closed the second tranche of a substantial investment from British American Tobacco p.l.c. (NYSE: BTI) subsidiary, BT DE Investments Inc. This tranche added CA$41.5 million to Organigram’s coffers, bringing the total investment so far to CA$124.6 million (approximately $92 million USD).

The latest transaction involved the acquisition of 4.4 million common shares and 8.5 million Class A preferred shares at a price of CA$3.2203 per share. A third and final tranche, involving 12.9 million additional shares, is expected to be completed by February 28 next year.

Organigram stated that it plans to use the funds to bolster its strategic investment pool, known as Jupiter. This pool aims to accelerate the company’s international growth, with a focus on expanding into new markets and enhancing its technological and product offerings.

The company has already made significant investments through the Jupiter pool, including a $2 million investment in North Carolina-based Open Book Extracts, a leader in hemp-derived products, and a €14 million ($15.5 million USD) investment in Sanity Group, a key player in Germany’s rapidly expanding medical cannabis market.

#2: Jushi Holdings

Jushi Holdings Inc. (CSE: JUSH) (OTC: JUSHF), a multi-state cannabis operator and owner of Beyond Hello dispensaries, filed a preliminary short form base shelf prospectus with Canadian securities regulators. This filing could enable the company to raise up to C$350 million over the next two years by issuing various securities, including shares, debt, and warrants, in Canada.

According to the company, the purpose of this move is to maintain financial flexibility and position Jushi to capitalize on potential regulatory changes in the U.S. cannabis market and pursue opportunistic acquisitions. The company aims to build a multi-state portfolio of branded cannabis assets through acquisitions, distressed workouts, and competitive applications.

The shelf prospectus, if approved, will be effective for 25 months, with specific terms of any offerings to be detailed in future filings. Jushi also emphasized that this filing is not an offer to sell securities in the U.S. and is limited to the Canadian market. The potential funding could support Jushi’s expansion efforts, especially as marijuana rescheduling discussions continue at the federal level in the U.S.

#3: Ascend Wellness

Social equity advocates in Massachusetts are urging a formal investigation into Ascend Wellness Holdings, Inc. (CSE: AAWH-U.CN) (OTC: AAWH), a New York-based multistate cannabis operator, for allegedly violating the state’s cannabis business ownership cap. According to a report by independent journalist Grant Smith Ellis, Abner Kurtin, the executive chairman of Ascend, is said to control between six to nine licenses, which exceeds the state’s strict limit of three licenses per owner.

In response to the report, the Black Economic Council of Massachusetts (BECMA) and Equitable Opportunities Now (EON) sent a letter to the state’s Cannabis Control Commission (CCC) and lawmakers, calling for a thorough review of all license ownerships by Ascend. In the letter, they highlighted concerns that the industry, including Ascend, may be using family members as “straw purchasers” to bypass ownership limits, potentially undermining market integrity.

The letter also noted that Ascend has spent $30,000 on lobbying efforts to lift the three-license cap, further raising concerns about potential violations. Additionally, the advocates are pressing for the establishment of an anonymous tip line for reporting such violations and ensuring that the CCC has adequate resources to prevent market consolidation.

Ascend Wellness has not yet responded to the request for comment regarding these accusations.

Top Psychedelic Companies for Week

#1: Awakn

Canadian biotech firm Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF) recently filed a new patent application for a class of aminoindane chemical entities with the potential to treat PTSD and other trauma-related disorders. This move is part of an ongoing collaboration with UK-based Graft Polymer Plc, which has led to the development of two promising chemical series.

The new patent strengthens Awakn’s intellectual property portfolio and reinforces its competitive position in the biopharmaceutical market. And in order to advance these compounds toward market readiness, Awakn announced that it had partnered with Charnwood Discovery, a UK drug discovery service provider, to synthesize the compounds for further testing.

Anthony Tennyson, CEO of Awakn, highlighted the progress, stating, “Our collaboration with Graft Polymer is advancing well, bringing us closer to developing new therapeutics for PTSD and other trauma-related conditions.”

In addition to its PTSD research, Awakn is also working on a psychedelic treatment for alcohol use disorder using MDMA, in collaboration with Catalent, another UK-based company. Over the past year, Awakn has started generating revenue from its network of psychedelic medicine clinics, further supporting its mission to bring innovative mental health treatments to market.

#2: GH Research

GH Research PLC (NASDAQ: GHRS), a clinical-stage company focused on developing psychedelic treatments, reported a significant increase in its second-quarter losses, amounting to $10.4 million compared to $7.7 million the previous year. This increase was attributed to heightened research and development expenses, which rose from $7.2 million to $9.8 million. 

Despite the losses, the Dublin-based company maintains a solid financial position with $204.5 million in cash and investments, which according to the company is sufficient to fund operations until 2026. 

GH Research is focused on developing GH001, an inhaled form of the psychedelic compound mebufotenin, for treatment-resistant depression. The drug is currently in a Phase 2b trial, with the double-blind phase expected to conclude in Q3 2024 and top-line results anticipated in late 2024 or early 2025. The company is also testing GH001 for postpartum depression and bipolar II disorder.

Unfortunately, The U.S. Food and Drug Administration (FDA) placed a clinical hold on GH001 last year, However GH Research said that it is working to provide the necessary data to address the FDA’s concerns, including additional toxicology studies. Meanwhile, a Phase 1 trial for the company’s proprietary aerosol delivery device has been approved in the UK and is now recruiting participants.

Additionally, GH Research reported that the company had appointed Dr. Velichka Valcheva as its new CEO, succeeding co-founder Dr. Theis Terwey.