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

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

In this week’s “Rising High,” The Fly’s recurring series focused on cannabis and psychedelic stock news, The Fly looks back on an acquisition, earnings and an out-licensing deal.

CURALEAF TO ACQUIRE NORTHERN GREEN CANADA: Curaleaf Holdings (CURLF) announced Tuesday it has signed a deal to acquire Northern Green Canada, a vertically integrated Canadian licensed cannabis producer focused primarily on expanding in the international market through its EU-GMP certification. NGC also partners with Canadian GACP cultivators to produce and distribute finished cannabis products to both the domestic and global market. The company said, “NGC has consistently supplied high THC, non-irradiated flower to the German market, which is expected to see exponential growth following the recent removal of cannabis from the narcotics list. NGC is also increasingly supplying Australia and New Zealand, the world’s fastest-growing cannabis markets. Given NGC’s longstanding role as a key supplier to Curaleaf’s Four20 brand, this acquisition marks a significant milestone in Curaleaf’s expansion strategy, particularly in Europe. By integrating NGC, Curaleaf can significantly increase its European margins while extending its global footprint across three continents: North America, Europe, and Australasia. The deal provides Curaleaf International with secure and consistent high quality indoor EU-GMP flower supply, ensuring the leading position in the growing German market during a critical juncture, while also allowing the company to maintain its leadership position in the U.K. and expand its first-mover advantage into Poland.” The deal is expected to close in the second quarter of 2024, pending all regulatory approvals. (read more)

CANNABIS, PSYCHEDELICS EARNINGS: On Friday, High Tide (HITI) reported first quarter earnings per share of C$0.00 on revenue of C$128.07M, which compared to a loss per share of (C$0.05) on revenue of C$118.08M last year. “I am very proud to announce that High Tide has reached break-even net income this quarter, which is a critical milestone in our ongoing corporate trajectory and is a rarity in the global cannabis space. While there has been industry-wide softening of Canadian cannabis sales in the post-holiday months and having made essentially no acquisitions in over a year, I am proud to report that our company continues to grow organically and has never had a sequential decline in revenue since going public in 2018. Our focus on responsible growth is leading to robust free cash flow generation, which has totaled over C$13M during the past three quarters. Due to our strong cost controls, we have generated significant increases in our Adjusted EBITDA margin as shown by achieving a level of 8.1% this quarter versus 4.7% in the first fiscal quarter of 2023. Given our size and scale, we are seeing the positive impact of operating leverage,” said CEO Raj Grover. (read more)

Additionally on Friday, High Tide announced entering into a definitive agreement pursuant to which High Tide will acquire all IP, including trademarks and other assets of the Queen of Bud brand. Its founder, Ashley Newman, will take the role of global brand ambassador. This selectively curated cannabis product portfolio is already available in Canada, and its ancillary products can be sold right now in the United States and Europe. The transaction, which is an arm’s length transaction, is subject to, among other things, receipt of the required approvals from the TSX Venture Exchange and the satisfaction of other customary conditions of closing. The transaction is expected to close in the coming weeks. The consideration for the assets acquired will be C$1,000,000. (read more)

On Tuesday, Relmada Therapeutics (RLMD) reported a Q4 loss per share of (84c), which compared to analyst estimates of a loss per share of (83c). “We continue to make solid progress in advancing our ongoing Phase 3 program for REL-1017 as an adjunctive treatment for major depressive disorder,” said Sergio Traversa, CEO. “Enrollment in the ongoing Reliance II is steadily proceeding, and we expect top line data in the second half of 2024.  In our second Phase 3 trial for REL-1017, Relight, we began dosing patients during the third quarter of last year, and we plan to complete enrollment in this study by year-end 2024.” (read more)

On Thursday, SNDL (SNDL) reported Q4 net revenue of C$248.5M, which compared to net revenue of C$240.4M for the same period last year. “2023 was a year of significant financial success for SNDL, including record-breaking revenue and gross profit, and the achievement of free cash flow in the second half of the year,” said Zach George, CEO. “The generation of stabilized free cash flow continues to be a top priority for our team, and I am proud that we delivered on this stated objective during the last two quarters. This period was foundational as we acquired Valens, welcomed top-tier leaders and streamlined our balance sheet, positioning SNDL for improved performance in 2024 and beyond.” (read more)

ENVERIC SIGNS TERM SHEET FOR OUT-LICENSING DEAL: Enveric Biosciences (ENVB) announced Tuesday it has signed two non-binding term sheets with an undisclosed biotechnology company to pursue the out-licensing of cannabinoid-COX-2 conjugate compounds for both pharmaceutical and non-pharmaceutical applications for treatment of joint diseases. The term sheets contemplate that, for all human and animal joint pathology, such as osteoarthritis, rheumatoid arthritis, and other joint pathology applications, the undisclosed licensee would assume responsibility for all future product development efforts and in return would receive exclusive, royalty-bearing global licenses to develop, market and sublicense the compounds. The compounds are new chemical entities that include cannabinoids in conjugate form with COX-2 inhibitors and cannabinoids in conjugate form with selected steroids. The pharmaceutical application term sheet provides that Enveric could be eligible to receive future development and sales milestone payments that in total could add up to approximately $61M, assuming certain conditions are met, including receiving approval for the investigational new drug application and completing Phases I through III testing of the licensed product. Royalty rates could range from 2.5% up to 10% on future sales, depending on meeting certain sales criteria. The non-pharmaceutical application term sheet provides that Enveric could be eligible to receive future development and sales milestone payments, which in total could add up to approximately $21M and with royalty rates ranging from 0.25% up to 7%, assuming certain conditions are met, including successful product development and commercial launch and on meeting certain sales criteria. Together, through the out-licensing of the two assets and meeting various development and sales milestones, Enveric could potentially receive milestone payments that total up to approximately $82M. (read more)

AURORA ACHIEVES AUSTRALIA’S TGA GMP CERTIFICATION: Aurora Cannabis (ACB) announced Wednesday that it has received Good Manufacturing Practice certification from Australia’s Therapeutic Goods Administration for its Canadian production facilities, River and Ridge. The company said, “Obtaining TGA’s GMP certification enables the company to deliver top-tier cannabis products to Australia while confirming Aurora’s dedication to exporting products fully compliant with TGA regulations and the stipulations of TGO 93.: The license grants approval for Aurora to broaden its product range offerings in the country, comprising dried flower, resin cartridges, pastilles and oils. (read more)

GROWGENERATION DOWNGRADE: On Wednesday, Oppenheimer downgraded GrowGeneration (GRWG) to Perform from Outperform without a price target. The analyst remains optimistic towards the longer term prospects for the company but now believes investors are best situated on the sidelines in the nearer term. Over the past several quarters, trends at GrowGeneration “weakened meaningfully,” as build-out type demand, across the cannabis sector, slowed dramatically, the analyst said. The firm is “hard-pressed to envision money flowing aggressively into” the shares in the absence of clear and sustained fundamental rebound at the company and within the sector. (read more)

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Audacious (AUSAF), Atai Life Sciences (ATAI),, Avant Brands (AVTBF), Ayr Wellness (AYRWF), BZAM (BZAMF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), Cresco Labs (CRLBF), CordovaCann (LVRLF), Cronos (CRON), Columbia Care (CCHWF), Compass Pathways (CMPS), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Cybin (CYBN), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), Trees Corporation (CANN), Goodness Growth (GDNSF), Greenlane (GNLN), Green Thumb (GTBIF), Hemp (HEMP), Heritage Cannabis (HERTF), India Globalization Capital (IGC), Indiva (NDVAF), IM Cannabis (IMCC), Innovative Industrial Properties (IIPR), InterCure (INCR), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lotus Ventures (LTTSF), Lowell Farms (LOWLF), Lucy Scientific Discovery (LSDI), MediPharm (MEDIF), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Optimi Health (OPTHF), Organigram (OGI), Planet 13 (PLNHF), Red White & Bloom (RWBYF), Reunion Neuroscience (REUN), Revitalist (RVLWF), RIV Capital (CNPOF), RYAH Group (RYAHF), Safe Harbor Financial (SHFS), Sproutly (SRUTF), Skye Biosciences (SKYE), Stem Holdings (STMH), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).

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