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 some executive comments on THC-infused beer and a notable divestment.

TILRAY’S THC-INFUSED BEER PLANS: Tilray Brands (TLRY) chairman and CEO Irwin Simon told BNN Bloomberg in an interview this week that the company expects to create beer infused with cannabis if the drug becomes legal across the U.S. Last month, the company acquired eight beers brands from AB InBev (BUD) for $85M, and then reached a deal to acquire 10% of Truss Beverage from Molson Coors Canada (TAP), BNN Bloomberg’s Ben Cousins noted. “I’m buying these brands too because I think there’s a big opportunity in the beer business and my whole strategy is craft beer,” Simon said. “Upon legalization (in the U.S.) one day, we will infuse these drinks with THC, with CBD, but we’ll have the distribution and we’ll have the brands when and if legalization does happen.”

Meanwhile, Tilray subsidiary Montauk Brewing announced the beginning of a highly-anticipated expansion beyond the Northeast that will begin in Georgia, and continue to other major markets in the U.S. later this year. “This is a huge moment for Montauk Brewing, as we begin a sustainable path to becoming a national brand. Since Montauk Brewing was founded 11 years ago, the buzz around its innovative, easy-drinking beers has spread far beyond New York. Consumers and retailers across the country constantly ask us when Montauk will be available in their cities, and we’re excited that we can now show them why Montauk is the top craft brewer in New York,” said Ty Gilmore, President of U.S. Beer at Tilray.

CANOPY HALTS BIOSTEEL FUNDING: Canopy Growth (CGC) has ceased funding BioSteel Sports Nutrition and BioSteel has commenced proceedings under the companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice and will seek recognition of that proceeding under Chapter 15 of the U.S. Bankruptcy Code as part of its efforts to simplify its business and reduce cash burn. BioSteel represented approximately 60% of the company’s Q1 FY2024 Adjusted EBITDA loss. The decision by BioSteel to seek creditor protection means that Canopy Growth will limit the further funding obligations in respect of the BioSteel business unit. Canopy Growth aims to transform to a simplified, asset-light operating model and focus on its core cannabis operations. With BioSteel’s operating loss and cash burn eliminated, Canopy Growth reiterates its expectation to achieve positive Adjusted EBITDA across its remaining business units exiting FY2024. Since July 1, reduction of the company’s overall debt by approximately C$349M, with further reductions totalling approximately C$95M expected over the next two quarters. Management continues to expect restructuring initiatives in FY2023 to deliver combined Selling, General & Administrative Expense and Cost of Goods Sold reduction of C$240M-$310M by the end of FY2024.

LUCY SCIENTIFIC BUYS BLUESKY: Lucy Scientific Discovery (LSDI) announced an agreement to acquire BlueSky Wellness and its portfolio of brands. This transaction expands Lucy’s footprint into the growing global wellness category by adding psychotropic products to its capabilities. Upon finalization of this acquisition, the BlueSky team will market Lucy’s MINDFUL brand, as well as a diverse range of psychotropic products for all 3 companies’ brands utilizing its e-commerce platform. Under the terms of the agreement, BlueSky’s shareholders will receive 3.5M shares of Lucy Scientific’s stock, as well as annual earn out payments based on a multiple of annual EBITDA in each of the next five years. Upon closing of the High Times and Blue Sky Wellness transactions, Lucy Scientific expects to have approximately 25M shares issued and outstanding; and projects the two transactions on a consolidated basis to add a minimum of $30M of revenue and $10M of EBITDA for the first twelve month period after closing. Lucy expects to complete the acquisition within 90 days, and will work closely with the BlueSky team during the transition.

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Aleafia Health (ALEAF), Acreage (ACRHF), Atai Life Science (ATAI), Audacious (AUSAF), Avant Brands (AVTBF), Ayr Wellness (AYRWF), Awakn Life Sciences (AWKNF), Body and Mind (BMMJ), BZAM (BZAMF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Columbia Care (CCHWF), Compass Pathways (CMPS), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Cybin (CYBN), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Enveric Biosciences (ENVB), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Goodness Growth (GDNSF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), InterCure (INCR), IM Cannabis (IMCC), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), Numinus Wellness (NUMIF), Organigram (OGI), Planet 13 (PLNHF), Reunion Neuroscience (REUN), Revitalist (RVLWF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Safe Harbor (SHFS), Small Pharma (DMTTF), SNDL (SNDL), 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).