Here’s What You Missed in Cannabis This Week

Canopy Growth reports Q3 earnings as Planet 13 exercises option to buy dispensary stake

In this week’s "Rising High," The Fly’s recurring series focused on cannabis and psychedelic stock news, The Fly looks back on cannabis earnings, an option exercise and an adult-use launch.

CANOPY GROWTH REPORTS Q3 EARNINGS: On Thursday, Canopy Growth (CGC) reported third quarter loss per share of (C$0.54) on revenue of C$113.35M, which compared to loss per share of (C$0.28) and revenue of C$155.02M for the same period last year.  "Canopy must reach profitability to achieve our ambition of long-term North American cannabis market leadership. We are transforming our Canadian business to an asset-light model and significantly reducing the overall size of our organization. These changes are difficult but necessary to drive our business to profitability and growth,” said CEO David Klein.

The company announced that it is transitioning to an asset-light model in Canada by exiting cannabis flower cultivation in the Smiths Falls, Ontario facility, ceasing the sourcing of cannabis flower from the Mirabel, Quebec facility, and moving to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts. The changes come in addition to multiple cost reduction activities within 2023, including the divestiture of Canopy Growth’s Canadian retail operations, the organizational restructuring of certain corporate functions, and the closure of the Scarborough, Ontario research facility. As a result of the cost reduction initiatives, the company intends to close its 1 Hershey Drive facility in Smiths Falls, Ontario, in addition to reducing headcount across the business by approximately 60%, including 800 positions impacted by the changes announced, of which 40% are impacted immediately. Management expects these cost reduction initiatives will reduce annual Cost of Goods Sold and Selling, General & Administrative expenses by a combined C$140M-C$160M over the next 12 months, bringing the total cost reduction target to C$240M-C$310M inclusive of the reductions announced in April. Canopy Growth continues to progress its U.S. strategy through Canopy USA and is committed to remaining dual–listed on the TSX and the Nasdaq. Based on the current revenue run rate and cost reduction initiatives, management reaffirms its expectation to achieve positive Adjusted EBITDA in FY2024, with the exception of investment in BioSteel.

PLANET 13 EXERCISES OPTION TO BUY DISPENSARY STAKE: Planet 13 Holdings (PLNHF) announced Tuesday that Planet 13 has exercised and closed its option to purchase the remaining 51% in Planet 13 Illinois from Frank Cowan for $866,250 in cash and 1,063,377 common shares of Planet 13, pursuant to an option purchase agreement entered into on August 4. Planet 13 Illinois holds a dispensary license for the Planet 13 dispensary located in Waukegan, Illinois.

"We’re thrilled to exercise this option for the remaining 51% of our Planet 13 Illinois dispensary at a price that we view as very accretive," said co-CEO Bob Groesbeck. "This transaction is a good example of our philosophy at Planet 13. One, location is everything. We couldn’t have a better spot than our dispensary next to an approved casino project and off the major interstate between Milwaukee and Chicago. Two, a disciplined and patient approach to finding attractively priced opportunities and cash management. And three, creating one-of-a-kind retail destinations designed to thrill our customers."

Construction at the dispensary is underway with an opening date anticipated later this year. Planet 13 has received all local and state approvals, excluding final approval upon completion of construction.

COLUMBIA CARE LAUNCHES ADULT USE SALES IN MISSOURI: Columbia Care (CCHWF) announced Monday that it began adult-use sales on February 4 at its Cannabist dispensary, located in Hermann, Missouri. The dispensary has been serving the medical patient community since 2021.

“We are thrilled to see the swift action taken by the Department of Health and Senior Services to bring recreational cannabis to Missourians so soon after the ballot measure passed in November. It has been a privilege to operate in such a rapidly growing market and serve our patients in the local Hermann community. We look forward to welcoming new customers through our doors in the coming weeks and introducing them to our Cannabist experience,” said CGO Jesse Channon.

HEXO INCREASES PRE-ROLL PRODUCTION: HEXO Corp. (HEXO) announced Wednesday it has completed the expansion of its straight edge pre-roll production capacity at the company’s Fenwick, Ontario site and will be launching a proprietary inhalation technology, intended to greatly improve the cannabis experience. The development allows HEXO to increase its straight edge pre-roll production capacity, accelerating the delivery of Redecan Redees products to include the new TnT cannabis strain series and expanding HEXO’s Original Stash brand to address rising consumer demand.

“Canadian customers immediately took to our straight edge pre-roll format, and we recognized that to satisfy the growing demand, we’d need to up our production significantly,” said CEO Charlie Bowman. “It was important to expand capacity without sacrificing THC percentage or terpene quality. This increased capacity allows HEXO to provide our new TnT strain series in straight edge pre-roll format, while offering a broader price range and new product innovations.”

4FRONT DEBUTS CANNABIS BRAND 1988: 4Front Ventures (FFNTF) announced Thursday the launch of 1988, a new line of flavored, tobacco-free blunts that feature the company’s flower. 1988 is now available at 4Front’s Mission Dispensaries in Georgetown, Worcester and Brookline, Massachusetts. The new brand will continue to roll out to partner dispensaries in the Bay State and to Illinois cannabis consumers later this year.

"1988 – our latest addition to our suite of brands – is named for the year in which the term blunt was introduced to the world by way of hip-hop," said EVP Brandon Mills. "Strong and sophisticated, our take on this classic staple delivers a rich smoking experience and everything you love about blunts without the hassle of rolling your own. As we continue to demonstrate our ability to develop products that ‘wow’ consumers, we look forward to expanding 1988’s product offerings and plan to launch infused blunts in the coming weeks, which will bring even more high-quality, consistent products to consumers."

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Akerna (KERN), Acreage Holdings (ACRHF), Aleafia (ALEAF), Atai Life Sciences (ATAI), Audacious (AUSAF), Aurora Cannabis (ACB), Avant Brands (AVTBF), Awakn Life Sciences (AWKNF), Ayr Wellness (AYRWF), Body and Mind (BMMJ), Cannara Biotech (LOVFF), Chicago Atlantic (REFI), Clever Leaves (CLVR), Compass Pathways (CMPS), 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), Flora Growth (FLGC), Flowr Corporation (FLWPF), General Cannabis (CANN), BZAM (BZAMF),Greenlane (GNLN), Green Thumb (GTBIF), Goodness Growth (GDNSF), 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), MediPharm Labs (MEDIF), MedMen (MMNFF), NewLake Capital (NLCP), Organigram (OGI), Reunion Neuroscience (REUN),  Revitalist (RVLWF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Safe Harbor (SHFS), SLANG Worldwide (SLGWF), Small Pharma (DMTTF), Sproutly (SRUTF), Skye Biosciences (SKYE), SNDL (SNDL), Stem Holdings (STMH), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Tryp Therapeutics (TRYPF), Trulieve (TCNNF), The Valens Company (VLNS), Verano (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