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 non-binding term sheet and an acquisition.

CANNABIS EARNINGS: On Monday, Safe Harbor Financial (SHFS) reported first quarter earnings per share of 4c on revenue of $4.1M, which compared to a loss per share of (6c) on revenue of $4.2M last year. “We continued to expand the breadth of our service offering in the first quarter, advancing several strategic initiatives and establishing a more diversified income base,” said Sundie Seefried, CEO. “We have been very successful with this effort, specifically within our lending program, nearly tripling our loan book year-over-year and driving a 251% increase in our loan income to $1.64M in the first quarter of 2024 compared to $466,293 in the comparable period of 2023.” (read more)

On Tuesday, Organigram (OGI) reported Q2 net revenue $37.6M, which compared to net revenue of $39.5M for the same period last year. “We are pleased with our performance against the strategic priorities we laid out at the beginning of Fiscal 2024,” said Beena Goldenberg, CEO. “Organigram is now the only licensed producer among the top three licensed producers in Canada with significant cash, negligible debt, and sizeable funds earmarked for strategic international investment. We have also made solid progress toward our goal of diversifying our exposure to international markets through our Jupiter fund and increasing our customer base abroad. Domestically, we grew our market share throughout Q2 and we remain focused on driving additional gains in the back half of fiscal 2024 by expanding distribution, introducing new products, and executing high-impact retail campaigns.” (read more)

Additionally on Tuesday, Lowell Farms (LOWLF) reported a Q1 loss per share of (15c) on revenue of $4.9M, which compared to a loss per share of (33c) on revenue of $7.5M last year. “Our recent strategic decisions have thoughtfully bolstered our manufacturing and distribution capabilities, allowing us to navigate the ever evolving industry landscape. By optimizing efficiencies, we’re poised for steady growth and positive impact,” said CEO Mark Ainsworth. “Our team remains committed to the strategic shifts the company has made in the previous quarters and we expect to see meaningful change.” (read more)

On Wednesday, AYR Wellness (AYRWF) reported a Q1 loss per share from continuing operations of ($1.08) on revenue of $118M, which compared to a loss per share of (13c) on revenue of $117.7M last year. David Goubert, CEO, said, “2024 continues to be about execution for AYR, furthering the progress we made in 2023 by focusing on improving product quality and consistency, building a loyal retail customer base, rebuilding our CPG brand platform, and continuing to prioritize cost controls. I want to thank our team for their continued effort against these goals. First quarter results reflect continued progress with modest sequential revenue growth, adjusted EBITDA margins in line with long-term targets of 25% and positive free cash flow for the period.” (read more)

Additionally on Wednesday, Cresco Labs (CRLBF) reported a Q1 loss per share of (2c) on revenue of $184.3M, which compared to a loss per share of (9c) on a revenue of $194.2M for the same period last year. “I want to thank the Cresco team for taking our learnings from the Year-of-the-Core, making them a part of our DNA and producing such a strong start to 2024. The continued development of our teams’ capabilities and our relentless focus on efficient execution is leading to very strong performance across our retail and branded product business resulting in a 10x increase in operating cash flow year-over-year. This is just the start, with upcoming adult use catalysts in Ohio and potential catalysts in Florida and Pennsylvania we have the ability to generate significant operating leverage and additional cash flow going forward,” said CEO Charles Bachtell. (read more)

Medipharm Labs (MEDIF) also reported earnings on Wednesday with Q1 revenue of $9.8M, which compared to revenue of $5.8M for the same period last year. David Pidduck, CEO, commented, “This quarter shows another quarter of growing revenue, stronger gross profit, decreasing costs and improving adjusted EBITDA. MediPharm’s balance sheet is in an excellent position to consider future investments in growth. With Adjusted EBITDA getting close to breakeven, the leadership team can now devote even more energy to growing our business. Regulatory changes in Germany and Australia and potential upcoming changes in the US are all very favorable for the company.” (read more)

ENVERIC ENTERS $66.5M DEAL WITH MINDBIO: On Tuesday, Enveric Biosciences (ENVB) announced that it has signed a non-binding term sheet to out-license a class of Novel Psilocin Prodrugs to Vancouver, BC-based MindBio Therapeutics. Enveric’s NPP molecules are designed to be metabolized specifically to release therapeutic levels of systemic psilocin at varying rates. Enveric has generated a library of NPP compounds protected by an issued U.S. patent, and further claimed in two pending U.S. patent applications and three international Patent Corporation Treaty patent applications. The library of NPP compounds includes molecules with varying properties such as enhanced gastrointestinal stability, increased absorption properties, and variable cleavable substitutions producing altered pharmacokinetic properties. Pursuant to the terms of the term sheet, MindBio will seek to advance a drug candidate from the NPP class for neuropsychiatric indications such as depression. The term sheet states that upon entering into a definitive agreement, MindBio would receive an exclusive, global license to the formulations, drugs, method of use, and devices developed to utilize the compound from Enveric and would assume responsibility for all future preclinical, clinical, and commercial development on a royalty-bearing basis for all human and animal pharmaceutical applications. If a definitive agreement is entered into and certain conditions are met, MindBio would pay Enveric development and sales milestones up to an aggregate $66.5M and royalties on all future sales. The license would include the right to sublicense and cash buyout options. (read more)

Additionally on Wednesday, Enveric reported Q1 loss per share of (61c), which compares to a loss per share of ($2.31) for the same period last year. “We believe the first quarter of 2024 was a highly productive period for Enveric as the company continued to advance development of the lead neuroplastogen drug candidate, EB-003, in preparation for an Investigational New Drug application and the expected initiation of a planned clinical development program,” said Joseph Tucker, CEO. “We continue to receive significant interest from strategic partners in the pharmaceutical industry for new drug candidates that target depression and anxiety disorders. We believe there is a need for new therapeutics that could potentially provide the anxiolytic and antidepressant properties clinically reported in the literature for certain psychedelic compounds without, at the same time, inducing the hallmark hallucinatory effects that defines such agents.” (read more)

ATAI REPORTS Q1 EARNINGS: On Wednesday, Atai Life Sciences (ATAI) reported a Q1 loss per share of (17c), which compared to analyst estimates of a loss per share of (18c). The company reported Q1 revenue of $0, which compared to revenue of $37,000 for the same period last year. As of March 31, the company had cash, cash equivalents, restricted cash and short-term investments of $121.3M. The company expects its cash, marketable securities and committed term loan facility with Hercules Capital to be sufficient to fund operations into 2026. The company also announced Florian Brand, co-Founder and current CEO, will step down as CEO by the end of this year. co-Founder Srinivas Rao, currently the Chief Scientific Officer, will be promoted to co-CEO effective June 1, and intends to assume the role of CEO by the end of the year. (read more)

CV SCIENCES ACQUIRES ELEVATED SOFTGELS: CV Sciences (CVSI) announced Monday it has consummated its purchase of Elevated Softgels, a manufacturer of encapsulated softgels and tinctures for the supplement and nutrition industry.  The company said, “Elevated Softgels has operational flexibility allowing low to large minimum order quantity production runs, allowing for efficient use of capital and the ability to increase speed to market for new product development.  Elevated Softgels is GMP-certified and FDA-registered. The acquisition creates opportunity to further increase our sales to current and new clients.  In addition, we intend to in-source production of certain of our key products.” The acquisition was structured as an equity purchase, where the company will operate Elevated Softgels as its wholly-owned subsidiary. The total consideration for the acquisition of Elevated Softgels is up to $1M consisting of a cash payment made at the closing of $100,000, the delivery at the closing of 17,422,181 shares of CV Sciences’ common stock, having a value of $700,000 as priced at the thirty day volume weighted average price of CV Sciences’ common stock, and the potential payment of cash and stock up to $200,000 in the form of an earn-out if the business of Elevated Softgels meets certain performance thresholds during the 12-month period following the closing. The acquisition is expected to be accretive in its first year and contribute to scaling economics thereafter. (read more)

Additionally on Tuesday, CV Sciences reported Q1 EPS of 0c on revenue of $4M, which compared to an EPS of 0c on revenue of $4.1M for the same period last year. “We are pleased with our first quarter 2024 results. Our revenues increased sequentially to $4M in the first quarter 2024 in a challenging environment. Our 46.3% gross margin in the first quarter 2024 is our best gross margin in the last 12 quarters,” stated Joseph Dowling, ChEO. “Our first quarter 2024 progress demonstrates our continuous commitment to innovation and cost-efficient execution as we move closer to profitability and positive cash flow.” (read more)

CRONOS PRICE TARGET RAISE: On Wednesday, CIBC raised the firm’s price target on Cronos Group (CRON) to $3.50 from $3 and kept an Outperformer rating on the shares. The company’s’ product differentiation and brand equity have led to ongoing market share gains and industry growth well above the industry’s pace, the analyst said. The firm believes the state of Cronos’ balance sheet “does not necessitate a race to profitability similar to peers.” It thinks the stock’s downside is limited compared to peers. (read more)

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Aurora Cannabis (ACB), Avant Brands (AVTBF), BZAM (BZAMF), Cannabist Company (CBSTF), Cannara Biotech (LOVFF), Canopy Growth (CGC), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), Compass Pathways (CMPS), CordovaCann (LVRLF), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Cybin (CYBN), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), Trees Corporation (CANN), Green Thumb Industries (GTBIF), Goodness Growth (GDNSF), Greenlane (GNLN), GrowGeneration (GRWG), Hemp (HEMP), Heritage Cannabis (HERTF), High Tide (HITI), InterCure (INCR), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), Lotus Ventures (LTTSF), Lucy Scientific Discovery (LSDI), MedMen (MMNFF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Optimi Health (OPTHF), Planet 13 (PLNHF), Red White & Bloom (RWBYF), Relmada Therapeutics (RLMD), Reunion Neuroscience (REUN), Revitalist (RVLWF), RIV Capital (CNPOF), RYAH Group (RYAHF), Sproutly (SRUTF), Skye Biosciences (SKYE), SNDL (SNDL), Stem Holdings (STMH), Sunniva (SNNVF), TerrAscend (TSNDF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).