Below is a recap of the main news related to the cannabis industry and markets for the week of January 10, 2022.
Tilray’s Earnings And Reactions
Tilray, Inc. (NASDAQ:TLRY) (TSX:TLRY) reported its financial results Monday for the second fiscal quarter ended November 30, 2021, with net revenue of $155 million, up by around 20% from $129 million in the same period year ago and down from $168 million in the first fiscal quarter.
The Canadian marijuana giant also announced a new parent name, Tilray Brands, Inc., reflecting the company’s evolution from a Canadian LP to a global consumer packaged goods company with a portfolio of cannabis and lifestyle CPG brands.
Net income increased to $6 million from a net loss of $89 million in the previous year’s quarter. Adjusted EBITDA was $13.8 million, representing 8% growth compared to the preceding prior quarter and making for the eleventh consecutive quarter of positive Adjusted EBITDA; Gross profit of $32.8 million was a 7% decrease from $35.3 million in the prior-year quarter.
Following the report, Benzinga spoke with CEO Irwin Simon.
Analyst Reaction
After the results, Pablo Zuanic from Cantor Fitzgerald offered an updated investment model for Tilray. He maintained an Overweight but lowered the price target for the stock to $6.90 from $7.40 on reduced estimates.
“We attach our updated model after talking to management and the release of the 10-Q for the Nov quarter. Conditions in the domestic Canadian recreational market remain challenging, with market share erosion and wholesale destocking leading to a 30% sequential drop in reported sales,” Zuanic noted.
The analyst also highlighted that even though the new estimates reflect less bullish market share assumptions, “the company is implementing several adjustments that should reverse the market share slide.”
Zuanic added that Cantor was still impressed with Tilray’s growth.
“Maybe, more importantly, we were positively impressed with the company’s sequential growth in the export business (~40%), generating $7.8 million in sales. As European countries start to legalize cannabis in the next few years (Germany by late 2023?), we believe TLRY is well-placed given its production and distribution infrastructure and established brands (especially in med tinctures).”
Benzinga Cannabis’ content is now available in Spanish on El Planteo.
Later in the week, it was reported that Tilray ended its partnership with AB InBev (NYSE:BUD), quickly turning around to wrap up two previously announced deals to acquire Green Flash Brewing and Alpine Beer Co.
The Canadian cannabis giant purchased the California craft beer brands from WC IPA on Dec. 17, for $5.1 million (CA$6.4 million), in cash and stock, according to the filing with the U.S. Securities and Exchange Commission (SEC).
Cannabis And Covid
As scientists around the world work furiously for nearly the past two years in an attempt to resolve the ongoing global pandemic, new research on cannabis and COVID-19 is providing some hope.
Can cannabis help against the coronavirus?
According to a report, “Cannabinoids Block Cellular Entry of SARS-CoV-2 and the Emerging Variants,” published in the Journal of Natural Products, certain cannabinoid acids from hemp (Cannabis sativa) could prevent infection from the virus that causes COVID-19 by obstructing its entry into cells.
It should be noted this is very early data.
The study led by Richard van Breemen, a researcher with Oregon State’s Global Hemp Innovation Center, College of Pharmacy and the Linus Pauling Institute discovered that two cannabinoid acids in hemp – cannabigerolic acid, or CBGA, and cannabidiolic acid, also known as CBDA have the ability to bind to the SARS-CoV-2 spike protein – the virus that causes COVID-19. By binding to the spike protein, these acids can block the virus from reaching into cells and causing infection, concluded the research.
“Orally bioavailable and with a long history of safe human use, these cannabinoids, isolated or in hemp extracts, have the potential to prevent as well as treat infection by SARS-CoV-2,” the researchers noted in the abstract of the study.
“These cannabinoid acids are abundant in hemp and in many hemp extracts,” van Breemen said, as quoted by local media. “They are not controlled substances like THC, the psychoactive ingredient in marijuana, and have a good safety profile in humans.”
Almost There: Italian Activists Collect Enough Signatures For Marijuana Legalization Referendum
In 2021, Italian activists formally presented the Supreme Court with more than half a million signatures gathered for a referendum to legalize the personal cultivation of marijuana and psychoactive mushrooms.
On Wednesday, Italian officials certified that activists had indeed collected enough signatures to put marijuana legalization on the ballot this spring, though there’s still one more procedural step before the measure can be officially put before the voters.
If the Constitutional Court allows the referendum to go forward, voters are expected to decide on the policy change sometime between April 15 and June 15. Should the referendum make it to the polls, a simple majority will be needed for it to be enacted.
Reports & Data
Cannabis Chart Of The Week: It’s Been Better To Be A Lender Than A Borrower
Viridian Capital Advisors created an equal-weighted basket of Real Estate sector stocks, including AFC Gamma, IIPR, NewLake, and PowerReit (Chicago Atlantic IPO’d in December), shown by the green line in the graph. We also created an equal-weighted basket of the top 5 MSOs by market cap, Cureleaf (OTC:CURLF), Green Thumb Industries (OTC:GTBIF), Trulieve (OTC:TCNNF), Verano (OTC:VRNOF) and Cresco Labs (OTC: CRLBF), shown by the orange line on the graph. We indexed the price of each basket so that 10/1/21 equals 100%.
The lender basket significantly outperformed the MSO basket over the period, scoring a 5% gain compared to a 15% loss.
Read the article.
Markets
Stocks closed the week in the red. Over the five trading days of this week:
- The ETFMG Alternative Harvest ETF (NYSE:MJ): lost 3%.
- The AdvisorShares Pure Cannabis ETF (NYSE:YOLO): tumbled 4%.
- The AdvisorShares Pure US Cannabis ETF (NYSE:MSOS): fell 2.2%.
- The Cannabis ETF (NYSE:THCX): was down 4%.
- The Amplify Seymour Cannabis ETF (NYSE:CNBS): slipped 0.8%.
- The SPDR S&P 500 ETF Trust (NYSE:SPY) was down 0.2%.
M&A
Gb Sciences Leaves Cannabis Cultivation With $8M Sale Of Las Vegas Facility, Enters BioPharma Industry
Gb Sciences, Inc. (OTCQB:GBLX) closed the sale of its last remaining cannabis facility, completing a transition to the biopharmaceutical industry.
Based in Las Vegas, the company reported that management’s decision to end all connections to the cannabis cultivation industry positions Gb Sciences to uplist its stock to a senior exchange and attract institutional investors and strategic partners in the biopharmaceutical drug development sector.
The sale of Gb Sciences’ Las Vegas cannabis facility, valued at $8 million, was finalized on Dec. 31 following the required transfer of Gb Sciences’ cannabis production and extraction licenses to AJE Management, LLC by the Nevada Cannabis Compliance Board.
Kaya Holdings Boosts Operations In Greece With 50% Acquisition Of Epidaurus Medical Cannabis Project
Cannabis company Kaya Holdings, Inc. (OTCQB:KAYS) announced that its majority-owned subsidiary Kaya Farms Greece has entered into an agreement to acquire 50% of a medical cannabis project in Epidaurus, Greece.
The move marks the company’s second cannabis venture in the EU nation. Terms of the deal were not disclosed.
Financings
Al Harrington’s Cannabis Brand Viola Closes $13M Equity Funding Round
Former NBA star Al Harrington’s cannabis brand Viola reported Wednesday the closing of a $13 million equity funding round. The California-based DelMorgan & Co. acted as an exclusive strategic transaction advisor to Viola in connection with the transaction.
This latest round of funding enables Viola to expand into several key new markets, including Pennsylvania, Illinois, New Jersey and Maryland, and to continue conducting strategic marketing initiatives, further positioning the company within the space.
Leafly Secures $30M To Fund Multi-Year Business Plan Ahead Of Going Public Via Deal With Merida
Online cannabis discovery marketplace Leafly Holdings Inc. and Merida Merger Corp. I (NASDAQ:MCMJ), a special purpose acquisition company sponsored by Merida Capital Holdings, announced Wednesday that they have entered into a $30 million convertible note purchase agreement with new investors led by Cohanzick Management LLC and affiliates, an investment management firm.
The supplemental financing is expected to close immediately prior to wrapping up the proposed business combination between Leafly and Merida. The funding will support Leafly’s current multi-year business plan.
Garden Society Raises Over $7M In Series A Funding Round To Support Business Growth
Female-owned Garden Society has raised more than $7 million in Series A funding.
Led by RJ Primo LLC, the funding will be used to scale product offerings, modernize manufacturing and further expand its team to meet the growing demand throughout California, as well as to expand into other states in 2022.
Cannabis Hiring Platform Vangst Raises $19M Via Series B Funding Round To Support Influx Of Jobs
Cannabis hiring platform Vangst revealed Thursday that it has secured $19 million in financing through a Series B funding round.
Led by Level One Fund with participation from previous investors including Lerer Hippeau, Colle Capital, Casa Verde Capital, Phyto Partners and new investors including L2 Ventures, Althea, Delta Emerald Ventures, Achari VC, the round highlights the Vangst’s growth over the last three years, the Denver-based company said.
Cannabis Lifestyle Co. Pilgrim Soul Closes $2M Raise With Supporters Like Merida Capital, Al Harrington
Cannabis lifestyle and creativity-focused Pilgrim Soul has closed a $2 million strategic seed funding round, supported by investments from Merida Capital Holdings and Bee House, as well as serial entrepreneur and Skip-Hop founder Michal Diament and other well-known tech entrepreneurs.
Additional brand advisors and equity holders include NBA veteran and Viola Brands founder Al Harrington, Merlin Kauffman, founder of Soothe and former Sperry & Club Monaco CMO Ann Watson.
Earnings Reports
GrowGeneration Corp. (NASDAQ:GRWG) reported its revised full-year 2021 revenue expectations of $420 million to $422 million, versus $193 million for 2020 – an increase of 118%.
Find all the details on these and other earnings reports on Benzinga Cannabis’ Earnings Center.
Buying Cannabis At The Airport? Prince George Could Become First In World To Open Marijuana Shop
Cannabis dispensary at an airport? Could this be true?
Apparently, it could happen sooner rather than later. Where? Canada, of course, and most likely at the Prince George Airport (IATA: YXS) (ICAO: CYXS), which serves Prince George, British Columbia and the surrounding areas.
The airport seeks to become the first in the world to have a retail weed shop on its premises.
Last Friday, the Prince George Airport Authority (PGAA) welcomed a new business partner, which is “pioneering cannabis for travel” – Copilot.
Other News
Hhemp.co announced an ongoing white-labeling partnership with nationally recognized, celebrity-endorsed brands GasHouse Cannabis and GasHouse Hemp CBD on their Pluto Delta 8 Hemp Smoke brand. The company has also been approached by other major California cannabis brands.
The CEO of Hhemp.co, Bao Le, told Benzinga “Hhemp.co has created our high standards in the hemp industry to build on trust, science, innovation and effect. And now we are ready to build partnerships with other like-minded companies that are looking to expand products and R&D.”
Juva Life Inc. (CSE:JUVA) (OTCQB:JUVAF) (FRANKFURT: 4VV) announced the advancement of proprietary non-cannabinoid molecular candidate JUVA-019 from discovery to pre-lead candidacy, ready for preclinical pharmacology and development as a stand-alone compound. The advancement follows internal observations including those made from a previously announced comparative study and showed that there were no apparent synergistic or additive effects on inhibition of certain cytokines for inflammation when combined with the cannabinoids, furthering Juva’s hypothesis that the compound can stand alone as a candidate for further drug investigation through preclinical pharmacology and development.
“The advancement of JUVA-019 from discovery to pre-lead candidacy is a major step for Juva research and one that further validates our hypothesis that this standalone compound does not require cannabinoids to elicit the observed anti-inflammatory effects. As a non-cannabinoid molecule, we look forward to moving JUVA-019 further along in the drug development pathway and conducting additional comparative studies to provide us more information into its efficacy, potency, and safety,” Juva founder and CEO, Doug Chloupek told Benzinga.
Eaze Opens Two Dispensaries
Eaze, the largest cannabis delivery marketplace in the country, now has a home of its own.
On Thursday, Eaze announced the launch of its first Eaze Dispensary shop in San Diego, California, and the acquisition of a second dispensary in Santa Ana.
After seven years of delivering cannabis products to consumers’ homes — a Godsend during the height of the ongoing COVID-19 pandemic — these two Southern California communities can now browse in person and pick up their favorite Eaze products and new brands.
Top Stories Of The Week
Check out the top stories on Benzinga Cannabis this week:
Top Spanish Stories
Lead image by Ilona Szentivanyi. Copyright: Benzinga.
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