Rising High: SNDL announces successful bid to acquire Indiva

In this week’s “Rising High,” The Fly’s recurring series focused on cannabis and psychedelic stock news, The Fly looks back on a stalking horse bid, earnings and leadership changes.

SNDL MAKES SUCCESSFUL BID TO ACQUIRE INDIVA: SNDL (SNDL) announced Thursday that, in the context of proceedings pursuant to Indiva’s (NDVAF) filing under the Companies’ Creditors Arrangement Act and the sales and investment solicitation process, the stalking horse bid of SNDL has been chosen as the successful bid in the acquisition of the Indiva business and assets. The bid is subject to approval by the Ontario Superior Court of Justice overseeing the CCAA proceedings. SNDL’s acquisition includes Indiva’s facility in London, Ontario and a portfolio of owned and licensed brands including Pearls by Grön, No Future, Wana, and Bhang Chocolate. The transaction is expected to enhance SNDL’s product offerings and further solidify SNDL’s position in the Canadian cannabis market.

“We are thrilled by the opportunity to partner with our colleagues at Indiva to deliver high quality products and brands to consumers,” said Zach George, SNDL’s CEO. “This transaction will materially improve our market share in the edibles category and is expected to unlock value through improved capacity utilization, a reduction in aggregate corporate expenses, and the potential sale of redundant real estate holdings.”

Indiva will seek approval for the transaction from the Court on or about September 19, 2024. The transaction is subject to, among other things, the Court granting an approval and vesting order and the transaction receiving the approval of other regulatory authorities. The transaction is anticipated to close during SNDL’s fourth quarter following the receipt of all such approvals.

CANNABIS EARNINGS: On Tuesday, Entourage Health (ETRGF) reported second quarter total revenue of C$12.2M, which compared to revenue of C$13.4M for the same period last year. “Overall, our year-to-date performance aligns with our expectations and prior achievements. As we move into Q3 and beyond, we are optimistic about the opportunities ahead,” said George Scorsis, CEO. “This quarter, we focused on the launch of new products and offerings under all our Entourage Brands. The expansion of Dime Bag resulted in significant traction, achieving over 90% distribution in Ontario. We remain dedicated to bringing variety to our consumers and are confident that these efforts will drive improved financial results as we progress through the year.”

The company added, “Entourage has demonstrated early successes that set a strong, positive path for the remainder of 2024. The company’s strategic initiatives, including the launch of innovative products, the introduction of large-format offerings, and the expansion of Saturday’s portfolio, are paving the way for growth. The favourable market response to Dime Bag, with its notable distribution milestone, highlights the potential to grow market share in the pre-roll segment. The company is strategically focusing on expanding our distribution channels across Canada, launching targeted products satisfying diverse consumer preferences, and forming strategic partnerships to scale operations and meet demand. By leveraging data-driven market insights, the Company is well-positioned for sustainable growth and profitability.”

On Wednesday, RIV Capital (CNPOF) reported Q2 loss per share of (6c) on a net revenue of $3.8M, which compared to a loss per share of (7c) on a revenue of $1.8M for the same period last year. “We are very pleased with the ongoing success of our adult-use operations rollout in New York through the second quarter,” said Mike Totzke, COO and interim CEO. “The customer response has been strong, reflecting the years of dedication and hard work from our team. Additionally, since the appointment of David Vautrin as Chief Retail Officer, we have enhanced our in-store retail shopping experience to best serve our growing cannabis community. We look forward to implementing these strategies further with the expected opening of two additional adult-use retail locations in New York later in 2024…With all that lies ahead, we are incredibly excited about the remainder of 2024 and the promising future of our combined company.”

Additionally on Tuesday, RIV Capital announced that holders of Class A common shares voted in favor of a special resolution to approve the previously announced proposed business combination with Cansortium (CNTMF), a vertically integrated, multi-state cannabis company operating under the FLUENT brand. Cansortium also announced that holders of common shares of Cansortium voted in favor of a special resolution to authorize an amendment to its articles to create a new class of non-voting exchangeable shares in connection with the combination. Approximately 98.8% of the votes eligible to be cast at the RIV meeting were voted in favor the arrangement resolution and approximately 99.1% of the votes eligible to be cast at the Cansortium meeting were voted in favor of the amendment proposal. The combination is expected to close in 4Q24.

ASCEND WELLNESS ANNOUNCES LEADERSHIP CHANGES: Ascend Wellness Holdings (AAWH) announced Tuesday several leadership changes as the company continues to align its operations with its long-term strategic goals and financial priorities. As part of this transition, John Hartmann will no longer serve as CEO and Mark Cassebaum has been terminated as CFO. The Board of Directors has appointed Samuel Brill, current director, as CEO. Brill is chairman of Invacare Holdings Corporation and has served as the President and CIO of Seventh Avenue Investments for the last seven years. In addition, Francis Perullo, co-founder and current director, has been appointed as President. Perullo previously served as the EVP of Corporate Affairs. Roman Nemchenko, previously CAO, has been appointed as CFO. In his expanded role, Nemchenko will lead the company’s financial operations, with a keen focus on improving margins, cash flow, and driving financial excellence.

“We are confident that this hands-on leadership team, with their diverse expertise and deep industry knowledge, will guide Ascend through this next phase of growth. The leadership changes come as part of a broader effort to realign our strategy and address recent performance challenges. We are confident that the changes will bring our focus back to the basics with an emphasis on the fundamentals and will position AWH for future success,” said Abner Kurtin, Executive Chair of the Board.

WANA LAUNCHES WANDEROUS MARKETPLACE: Wana Brands, a subsidiary of Canopy USA (CGC), announced Friday the launch of Wanderous, a marketplace that brings hemp-derived products together into one streamlined shopping experience. Hand-selected by the experts at Wana, Wanderous offers a curated selection of gummies and infused beverages in a wide variety of flavors, dosages and formulations, shipped direct to your door. Initially, Wanderous will feature Delta-9-THC products and non-intoxicating CBD gummies from six brands: Wana, Cann, Happi, Charlotte’s Web, Martha Stewart CBD, and MXXN.

“The Wanderous marketplace represents a new chapter in our mission to enhance lives through plant-powered products—and offers an engaging experience where shoppers can expect reliable product education and a quality guarantee from one of North America’s most experienced and trusted cannabis companies,” said Joe Hodas, President of Wana. “Wanderous also allows us to reach entirely new audiences in non-legal states who are also in need of solutions for sleep, stress, pain or sheer enjoyment, but simply don’t have easy access to safe, legal products. We are grateful for the opportunity to have such a positive impact on so many lives across the country.”

Debuting exclusively on Wanderous are Wana Beverages, a new line of ready-to-drink infused sparkling beverages crafted with hemp extracts, real fruit juice and other beneficial ingredients. Three combinations of flavors and effects will be available at launch in 7.5 oz cans featuring designs created in collaboration with illustrator Beto Val.

INTERCURE EXPANDS PARTNERSHIP WITH COOKIES: InterCure (INCR) announced Wednesday a new strategic agreement with Cookies to cultivate, manufacture, import and distribute Cookies’ branded products, produced from its cultivation and manufacturing facilities, initially in 8 licensed branded pharmacies across Germany, through Cookies Corners. This agreement marks an expansion of InterCure and Cookies’ partnership footprint in Europe now covering the UK, Austria, and Germany, alongside strategic collaborations in Israel. Under the terms of the new agreement, InterCure will cultivate, and manufacture Cookies licensed genetics and products at its global supply chain facilities. InterCure’s EU-GMP manufacturing sites will import, register, and produce Cookies-branded products, including future range of next-generation offerings such as live resin and live rosin products and vapes. These products will be dispensed through InterCure’s Cookies Corner licensed pharmacies and online platforms.

“We are excited to strengthen our partnership with Cookies and extend our reach into Germany, a pivotal market for medical cannabis in Europe,” said Alexander Rabinovitch, CEO of InterCure. “This agreement enables us to introduce Cookies’ globally renowned retail experience to the fast growing German market through Cookies Corners to be located in 8 major German cities advancing our commitment to providing access to high-quality, pharma-grade cannabis on a global scale. With Germany’s recent Cannabis reform, the European market is on the cusp of significant growth, and we look forward to making one of the world’s leading cannabis brands accessible to patients in Germany, Austria and the UK.”

CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Atai Life Sciences (ATAI), Aurora Cannabis (ACB), Ayr Wellness (AYRWF), Avant Brands (AVTBF), BZAM (BZAMF), Cannabist Company (CBSTF), Cannara Biotech (LOVFF), Chicago Atlantic (REFI), Clearmind (CMND), Clever Leaves (CLVR), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), Curaleaf (CURLF), CURE Pharmaceutical (CURR), CV Sciences (CVSI), Cybin (CYBN), Enveric (ENVB), Flora Growth (FLGC), Trees Corporation (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Hemp (HEMP), Heritage Cannabis (HERTF), High Tide (HITI), IGC Pharma (IGC), IM Cannabis (IMCC), Innovative Industrial Properties (IIPR), Lowell Farms (LOWLF), Lucy Scientific Discovery (LSDI), MediPharm (MEDIF), MindMed (MNMD), NewLake Capital (NLCP), Numinus (NUMIF), Optimi Health (OPTHF), Organigram (OGI), PharmAla (MDXXF), Planet 13 (PLNHF), Psyence Biomedical (PBM), Red White & Bloom (RWBYF), Relmada Therapeutics (RLMD), Reunion Neuroscience (REUN), Safe Harbor Financial (SHFS), Skye Biosciences (SKYE), Stem Holdings (STMH), TerrAscend (TRSSF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Verano (VRNOF), Village Farms (VFF), Vireo Health (VREOF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).