Here’s What You Missed in Cannabis, Psychedelics This Week

FDA explores CBD regulation in food, supplements as analyst lowers Aurora Cannabis price target

In this week’s "Rising High," The Fly’s recurring series focused on cannabis and psychedelic stock news, The Fly looks back on FDA regulation, analyst notes and an acquisition close.

FDA EXPLORES CBD REGULATION IN FOOD, SUPPLEMENTS: The Food and Drug Administration is studying whether legal cannabis is safe in food or supplements and plans to make recommendations for how to regulate the growing number of cannabis-derived products in the coming months, The Wall Street Journal’s Liz Essley Whyte reported Tuesday, citing agency officials. "Given what we know about the safety of CBD so far, it raises concerns for FDA about whether these existing regulatory pathways for food and dietary supplements are appropriate for this substance," said FDA Principal Deputy Commissioner Janet Woodcock, who has led the agency’s efforts looking at cannabis regulation.

AURORA PRICE TARGET LOWERED: Piper Sandler analyst Michael Lavery lowered the firm’s price target on Aurora Cannabis (ACB) on Wednesday to $1 from $2 and kept a Neutral rating on the shares. The analyst reduced sales estimates to "better reflect softer cannabis momentum, with a more conservative outlook in Canada and internationally." However, Aurora appears to still be on track to have an EBITDA-positive run rate at the end of Q2 of 2023, Lavery said. He thinks Aurora’s cost-cutting initiatives should drive "significant sequential margin improvement," and models the company reaching positive adjusted EBITDA Q3 of 2023. Aurora’s "strong" balance sheet gives it an advantage in a capital constrained industry, though regulatory changes are needed for it to generate any substantial topline momentum in the U.S., contended Lavery.

PIPER LOWERS TILRAY SALES ESTIMATES: Piper Sandler analyst Michael Lavery also said on Wednesday an unfavorable currency exchange rate, softer than expected beer sales, and some lost distribution for hemp foods are weighing on Tilray’s (TLRY) sales momentum in fiscal Q2. Market share in Canadian recreation use appears to be stabilizing, though the company remains well below its mid-teens share from a year ago and price compression remains a headwind, Lavery said. He reduced sales estimates to better reflect softer U.S. beer sales, which he says are trending worse than expected, especially Sweetwater’s launch in California. Lavery kept a Neutral rating on Tilray shares with a $3 price target.

FLORA GROWTH CLOSES FGH ACQUISITION: Flora Growth (FLGC) announced on Tuesday that, on December 23, 2022, it closed the previously disclosed acquisition of all of the issued and outstanding shares of Franchise Global Health, a multi-national operator in the medical cannabis industry, with principal operations in Germany.

“We view this acquisition as transformational as Flora pursues its strategic growth plan to lead the global market for cannabis and its derivatives,” said Flora CEO Luis Merchan. “Flora has now secured a crucial footprint in an established international cannabis market, providing a unique opportunity for operational synergies and diversified growth. The acquisition adds to our distribution network, expanding our client base, and increases our ability to distribute wholesale cannabis products at scale into the European Union.”

ATAI REPORTS KUR-101 PHASE 1 RESULTS: atai Life Sciences (ATAI) announced Friday additional clinical data from the Kures Therapeutics Phase 1 trial of KUR-101 in healthy volunteers. This two-part trial was designed to assess the safety, tolerability, pharmacokinetics, and analgesic activity of KUR-101. Part 1 consisted of a double-blind, randomized, 5-cohort single-ascending dose study to evaluate the safety and analgesic activity of a single oral dose of KUR-101 in a total of 42 healthy volunteers. Analgesic activity was assessed by the cold pressor test and impact on respiration was evaluated by measuring respiration rate at multiple time points. As previously reported, KUR-101 was well tolerated and produced dose-dependent analgesic activity without clinically significant effects on respiration at any dose-level tested, including at the 90mg dose level selected for the Part 2 comparator study. Part 2 consisted of a randomized, double-blind, crossover study to evaluate the safety and analgesic activity of KUR-101 compared to both oxycodone and placebo. 18 healthy volunteers were enrolled and randomized into one of three sequences. Each subject received single oral doses of KUR-101, oxycodone, and placebo separated by a 7-day washout. Analgesic activity was measured by both CPT and thermal testing. Respiratory rate was assessed at multiple time points. Results from part 2 showed that a single dose of 90mg of KUR-101 was generally well tolerated and was observed to produce analgesic effects on CPT comparable to those seen in Part 1 of this trial. The analgesic effects of KUR-101 were less than those seen with oxycodone on both CPT and thermal testing. Further, both KUR-101 and oxycodone demonstrated effects on respiration comparable to placebo, thus precluding definitive conclusions of KUR-101’s respiratory impact.

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Audacious (AUSAF), Awakn Life Sciences (AWKNF), Avant Brands (AVTBF), Ayr Wellness (AYRWF), Body and Mind (BMMJ), Canopy Growth (CGC),  Cannara Biotech (LOVFF), Chicago Atlantic (REFI), Clever Leaves (CLVR), Compass Pathways (CMPS), Columbia Care (CCHWF), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), Curaleaf (CURLF), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Cybin (CYBN), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF),  Flowr Corporation (FLWPF), General Cannabis (CANN), Greenlane (GNLN), The Green Organic Dutchman (TGODF), Green Thumb (GTBIF), Goodness Growth (GDNSF), GrowGeneration (GRWG), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), IM Cannabis (IMCC), Khiron (KHRNF), Wellbeing Digital (KONEF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen (MMNFF), Neptune Wellness  (NEPT), NewLake Capital (NLCP), Organigram (OGI), Planet 13 (PLNHF), Reunion Neuroscience (REUN),  Revitalist (RVLWF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Safe Harbor (SHFS), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Small Pharma (DMTTF), Skye Biosciences (SKYE), SNDL (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tryp Therapeutics (TRYPF), Trulieve (TCNNF), The Valens Company (VLNS), Verano Holdings (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).

Keywords: cannabis, weed, stocks, marijuana, cultivation, legalization, CBD, THC, hemp, psychedelics, ketamine, psilocybin, LSD, MDMA