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 earnings, a settlement agreement and a facility sale.

TILRAY REPORTS Q1 EARNINGS: On Wednesday, Tilray Brands (TLRY) announced a first quarter loss per share of (10c) on revenue of $177M, which compared to analyst estimates of a loss per share of (5c) on revenue of $174M. The company also reported cannabis net revenue increased 20% to $70M in Q1 compared to $59M in the prior year quarter. In addition, Tilray reiterated its 2024 adjusted EBITDA target of $68M-$78M and an expectation to generate positive adjusted free cash flow. CEO Irwin Simon stated, “Tilray Brands is the most diversified global cannabis-lifestyle and CPG company in the world with four distinct and complementary business segments – medical and adult-use cannabis, beverages including, craft beer, spirits, ready to drink mixed cocktails in a can, non-alcoholic drinks, THC and CBD beverages, wellness products, and medical distribution. The balance we have brought to our diversified business model has positioned Tilray Brands as the #1 Canadian cannabis LP, the market leader in medical cannabis across Europe, a leader in the hemp foods industry, and a formidable player in the fast-growing craft beverage-alcohol industry with a growing leadership position. We have strategically diversified our company globally over the past several years and, as a result, Tilray is now ideally positioned to capture a wide range of opportunities across multiple industries driving value through organic and acquisitive revenue growth, operating efficiencies, and improved margins and profitability.” (read more)

Following the report, Alliance Global Partners raised the firm’s price target on Tilray to $2.25 from $2.00 and kept a Neutral rating on the shares. Following the close of the HEXO and Anheuser-Busch (BUD) brand acquisitions, the firm believes the company will be able to achieve cost synergies and see the bigger question in driving sales growth, the analyst said. Alliance believes the key to reaching its EBITDA target will be a combination of realizing cost synergies and driving sales growth. (read more)

Additionally, Tilray announced Monday that the company has closed its all-cash previously-announced acquisition of eight beer and beverage brands from Anheuser-Busch, including the breweries and brewpubs associated with them. The acquired businesses include Shock Top, Breckenridge Brewery, Blue Point Brewing Company, 10 Barrel Brewing Company, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Company, and HiBall Energy. (read more)

MEDIPHARM ENTERS $9M SETTLEMENT AGREEMENT: MediPharm Labs (MEDIF) announced Monday it has entered into a settlement agreement to resolve a claim in connection with a commercial agreement dispute, for a total consideration value of $9M. On January 24, 2020, MediPharm filed a statement of claim in the Ontario Superior Court of Justice against one of its long-term customers, Hexo, regarding a long-term supply agreement for cannabis concentrates. The claim related to the payment of outstanding amounts due to the company for products shipped to and received by the customer and deposits owed to the company for committed amounts not yet shipped. MediPharm was awarded a favourable summary judgment in the Ontario Court of Justice in July 2022. The summary judgment was appealed by Hexo and a hearing at the Court of Appeal was scheduled for October 12, 2023. In connection with the settlement, Hexo will abandon its appeal against MediPharm. Upon the acquisition of Hexo by Tilray Brands, MediPharm and Tilray sought a resolution that was favorable to each party and to establish a long-term supply relationship. Under the agreement, MediPharm will receive a total value consideration of $9M including: $3M immediate cash payment; $4.5M in common shares of Tilray; $1M in Tilray cannabis products; and a $500,000 supply agreement to provide Tilray with MediPharm products and services over four-years. (read more)

CANOPY COMPLETES SALE OF HERSHEY DRIVE FACILITY: Canopy Growth Corporation (CGC) announced Monday it has completed the sale of its Hershey Drive facility in Smiths Falls, Ontario, in connection with the previously announced agreement with Hershey Canada for cash consideration of approximately C$53M. Canopy Growth has sold a total of seven properties for aggregate gross proceeds of approximately C$155M since April 1, 2023. It is anticipated that net proceeds received from the sale of the facility will be used primarily to pay down the company’s senior secured credit facility. “The closing of the Hershey Drive facility sale further demonstrates our focus and resolve to complete our transformation to a simplified, asset-light operating model while continuing to improve our liquidity position and enhance our balance sheet,” said CEO David Klein. “Our ability to be nimble and brand focused has ensured that Canopy Growth is well positioned to succeed in the North American cannabis market.” (read more)

Additionally on Monday, Alliance Global Partners raised the firm’s price target on Canopy to C$1.30 from C$0.60 and maintained a Neutral rating following the company’s announcement of plans for protection under CCAA in an effort to reduce the cash drag from the BioSteel business. The company’s target of profitability by FY24 is now on a consolidated basis, vs. excluding BioSteel, and the firm sees potential for the company to inflect to positive EBITDA by FY25, the analyst said. Alliance added that the exit of Biosteel returns Canopy Growth to a more simplified, more cannabis-focused story, as the company’s actions remove a notable cash drag on the business. (read more)

NUMINUS INTRODUCES PSYCHEDELIC PROGRAM FOR MENTAL DISTRESS: On Tuesday, Numinus Wellness (NUMIF) introduced its psychedelic program for individuals suffering from mental distress associated with serious and chronic illness. Operating out of the Numinus Wellness UT and Cedar Clinical Research facilities, the program encompasses four key initiatives that showcase Numinus’ commitment to advancing psychedelic research and its potential for healing. Numinus CSO Paul Thielkin is the senior author of a recently published study of the safety, feasibility, and possible efficacy of group-administered psilocybin for depressed cancer patients. The company said, “This study not only demonstrates the possible therapeutic benefits of psilocybin but also highlights the immense potential the group model holds for reducing the costs associated with psychedelic therapy.” Numinus has also completed a group ketamine-assisted therapy intervention pilot for subjects suffering from chronic and serious illnesses. This pilot project showcased the effectiveness of ketamine-assisted therapy in alleviating depression and psychological distress associated with these conditions. The company also announced an upcoming follow-up group psilocybin project. Approved by both the FDA and an IRB, this study will the therapist to patient ratio while continuing to evaluate the impact of psilocybin-assisted therapy on cancer patients with depression. Subject to the availability of legal psilocybin-assisted therapy under applicable law, the results of this research may contribute to reducing costs and enhancing access for this patient population in the future. Numinus was also selected as one of five different sites participating in the Ketamine Research Foundation’s sponsored research study on ketamine to reduce end of life distress. This study seeks to investigate the potential of ketamine-assisted therapy in improving the quality of life for individuals facing end-of-life challenges. (read more)

ATAI LIFE SCIENCES COMPLETES VLS-01 STUDY: On Monday, Atai Life Sciences (ATAI) announced the completion of the Phase 1 study of VLS-01 in healthy participants. The Phase 1 study was designed to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of VLS-01 applied to the sublingual and buccal surfaces compared to intravenous DMT. The study enrolled a total of 74 healthy participants across three parts. The third part of the study evaluated VLS-01 administered and dosed as follows: sublingual 80mg, buccal 80mg with backing layer, and buccal 160mg with backing layer. VLS-01 was well-tolerated with a favorable safety profile, and dose-dependent increases in exposure were observed. VLS-01 administration also resulted in subjective effects in most participants across doses. The company observed that participants that received 160mg of VLS-01 with a backing layer via buccal administration experienced the most robust and consistent increases in exposure and subjective effects compared to the other OTF cohorts, with results comparable to those seen in the IV cohort of DMT. The company now plans to progress VLS-01 into a Phase 1b study in healthy participants. The study is expected to explore doses up to 160 mg with an optimized OTF formulation that incorporates taste masking, an intrinsic backing layer, and enhancements designed to increase permeability, with goals of further improving the participant experience and pharmacokinetics. The company has submitted a protocol to regulatory authorities and expects to enroll the first participant in a Phase 1b study in 1H 2024. (read more)

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Aleafia Health (ALEAF), Acreage (ACRHF), Audacious (AUSAF), Aurora Cannabis (ACB), Avant Brands (AVTBF), Ayr Wellness (AYRWF), Awakn Life Sciences (AWKNF), Body and Mind (BMMJ), BZAM (BZAMF), Cannara Biotech (LOVFF), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Columbia Care (CCHWF), Compass Pathways (CMPS), CURE Pharmaceutical (CURR), Curaleaf (CURLF), 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), Goodness Growth (GDNSF), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), 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), Lucy Scientific Discovery (LSDI), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), 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), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).