Here’s What You Missed in Cannabis 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 a facility sale, an acquisition agreement and a partnership expansion.

CANOPY GROWTH SELLS CALIFORNIA FACILITY: Canopy Growth Corporation (CGC) announced Thursday it has completed the sale of its facility in Modesto, California. The company has now sold five facilities for proceeds of C$81M since April 1 and anticipates generating up to a total of C$150M from facility divestitures by September 30. “Today’s announcement reflects our continued focus on strengthening Canopy Growth’s balance sheet and demonstrates the rapid execution of our transformation to an asset-light, North American focused cannabis business on an accelerated path to profitability,” said CEO David Klein. (read more)

Additionally on Thursday, Canopy Growth announced the appointment of PKF O’Connor Davies as its independent registered public accounting firm for the 2024 fiscal year and accepted the resignation of KPMG. (read more)

On Monday, Benchmark analyst Mike Hickey lowered the firm’s price target on Canopy Growth to $0 from $1.50 and kept a Sell rating on the shares. Canopy is struggling with material negative cashflows and declining revenues in its Canadian operations and the firm argues that aggressive expansion into the U.S. markets “could be a signal of desperation,” the analyst said. The firm, which does not believe management will be successful in orchestration of a business transformation, noted that Canopy has acknowledged going concern risk and believes the company faces the possibility it may not be able to continue operations and meet its financial obligations. (read more)

Meanwhile on Friday, Bernstein made no change to the firm’s Market Perform rating or $1.55 price target on Canopy Growth following the Q4 results. The quarterly revenue figure missed consensus by 10%, with FY23 net sales falling 5.1% short of consensus estimates due to the BioSteel restatement, the analyst said. Looking ahead, the firm says visibility remains limited. (read more)

Additionally on Friday, Canaccord analyst Matt Bottomley downgraded Canopy Growth to Sell from Hold with a price target of C$0.50, down from C$3, after Canopy reported its Q4 and FY23 financial results after some delay. The results came in “well under” the firm’s expectations and operating losses “continue to trend in the wrong direction,” said the analyst, who believes Canopy’s ability to service its “lofty” debt obligations now represents “a material risk to the entity’s ability to continue on as a going concern.” (read more)

TERRASCEND TO ACQUIRE BLUE RIDGE WELLNESS: TerrAscend (TRSSF) announced Tuesday that it entered into a definitive agreement to acquire Hempaid d/b/a Blue Ridge Wellness, a medical dispensary in Maryland. The transaction expands TerrAscend’s footprint to three dispensaries in the state. Under the terms of the agreement, TerrAscend will acquire Blue Ridge Wellness for total consideration of $6.75M, including $3.M in cash, with the remainder in a seller’s note. The acquisition, which is expected to be accretive to TerrAscend on an EBITDA and cashflow basis, is subject to customary closing conditions, including regulatory approval. Blue Ridge Wellness is currently on a revenue run rate of approximately $4.3M. The company has plans to relocate the Blue Ridge dispensary to a new, larger storefront it has already secured and expects to complete the relocation in the next six months. (read more)

TerrAscend also announced Wednesday the closing of its previously announced acquisition of Derby 1, d/b/a “Peninsula Alternative Health, a medical dispensary in Maryland. The transaction is expected to be immediately accretive to TerrAscend on an EBITDA and cashflow basis. Peninsula Alternative Health is one of the highest performing medical dispensaries in Maryland with a net revenue run rate of approximately $14M. (read more)

AVICANNA, MEDIPHARM EXPAND MANUFACTURING AGREEMENT: Avicanna (AVCNF) announced Monday the extension of its existing strategic manufacturing agreement with Medipharm Labs (MEDIF) for the commercialization of its proprietary cannabinoid-based Self-Emulsifying Drug Delivery Systems technology capsules for the Canadian and international markets. “We are happy to be advancing our proprietary SEDDS technology capsules to the market with MediPharm, who have demonstrated focus, alignment and the necessary capabilities to manufacture and deliver these products across a number of markets and channels. We are excited about the potential of our proprietary single-dose formulations in both medical and pharmaceutical cannabinoid segments,” stated Aras Azadian, CEO of Avicanna.

Under the expanded agreement, Avicanna intends to commercialize its proprietary SEDDS technology capsules, under the RHO Phyto brand, across domestic nationwide medical channels including Avicanna’s MyMedi.ca online cannabis care platform and MediPharm’s Canna farms platform. Additionally, MediPharm intends to commercialize the capsules across adult use wellness channels under its MediPharm Labs brand. (read more)

ADULT-USE SALES TO LAUNCH IN MARYLAND: Curaleaf (CURLF) announced Thursday it will begin adult use cannabis sales at all four of the company’s Maryland dispensaries beginning July 1, the official first day of legal, adult use sales in the state. At all four locations, consumers over the age of 21 will be able to purchase from Curaleaf’s assortment of products and brands including Grassroots, a premium brand of flower and pre-rolls, Select Elite vapes, and hardware, Cliq by Select. (read more)

RISE Dispensaries, a retail chain owned by Green Thumb Industries (GTBIF), announced Thursday that it will commence adult use sales at its four Maryland dispensaries, beginning Saturday, July 1. RISE Hagerstown, RISE Joppa, RISE Silver Spring and RISE Bethesda will each celebrate the launch of adult-use sales. Medical patients and adult-use consumers can explore Green Thumb’s collection of cannabis products, including RYTHM premium flower, Dogwalkers pre-rolls, Beboe socially-dosed vapes and incredibles gummies. (read more)

GREENLANE EXPANDS INTO DISPOSABLE NICOTINE: Greenlane Holdings (GNLN) announced Wednesday its expansion of products to include disposable nicotine offerings. The company said, “This initiative aligns with the company’s strategic vision as a leader in the market to offer a diverse portfolio of products that are profitable and in high demand by a broad range of customers. With a total addressable U.S. market exceeding $6B annually and expected to grow at a compound annual rate exceeding 11%, disposable nicotine products have a significant impact on Greenlane customer revenues. With historic knowledge and expertise in this category, Greenlane strategically surveyed market and consumer buying habits to identify key industry leading partners, manufacturers, and brands to best capitalize on the expansion into this market segment. These brands, including Fume, Death Row Vapes, Packspod, and Tyson 2.0 enable Greenlane to offer a broader portfolio of diverse and high-quality products that align with consumer buying trends.” (read more)

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Aleafia (ALEAF), Atai Life Science (ATAI), Audacious (AUSAF), Avant Brands (AVTBF), Awakn Life Sciences (AWKNF), Ayr Wellness (AYRWF), Aurora Cannabis (ACB), Body and Mind (BMMJ), BZAM (BZAMF), Cannara Biotech (LOVFF), Chicago Atlantic (REFI), 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), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), GrowGeneration (GRWG), Goodness Growth (GDNSF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IGC Pharma (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), MedMen (MMNFF), NewLake Capital (NLCP), Organigram (OGI), Planet 13 (PLNHF), Red, White & Bloom (RWBYF), 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), 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).