Week In Review: Dallas Officials Approve Cannabis Decriminalization Petition for November Ballot; Field Trip Health Ltd. Shares Rise 5.8% Amid Increased Trading Volume; SNDL Announces Major Restructuring to Save $20 Million Annually; Verano buys Cannabists Businesses

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s a tale of two markets with some states doing amazingly well. And some, well…they’re not doing so well (hello New York). Let’s get to it!

Cannabis Industry Highlights

#1 Dallas Officials Approve Cannabis Decriminalization Petition for November Ballot: Dallas officials have finalized a petition allowing voters to decide on a cannabis decriminalization ordinance this November. The proposed measure aims to make the enforcement of Class A and Class B misdemeanor cannabis possession the city’s “lowest enforcement priority.” If approved, the ordinance would direct city resources away from misdemeanor cannabis enforcement to other public safety initiatives.

#2 Field Trip Health Ltd. experienced a 5.8% increase in its share price during trading on Tuesday. The stock reached a high of C$1.11, before settling at C$1.09 by the end of the trading day. This represents a notable rise from its previous close at C$1.03. The trading volume saw a significant surge, with approximately 97,451 shares traded, a 165% increase from the average daily volume of 36,819 shares.

#3 SNDL Announces Major Restructuring, Job Cuts to Save $20 Million Annually: Canadian cannabis company SNDL Inc. has announced a significant financial restructuring plan, which includes the elimination of 106 full-time positions. The restructuring aims to optimize corporate overhead spending and consolidate its cannabis segments under the leadership of Tyler Robson. SNDL expects this move to result in annual savings of $20 million, with a one-time restructuring cost of $11 million over the next 18 months. The company anticipates realizing full benefits by mid-2025, with initial gains projected as early as Q3 2024.

#4 FDA and FTC Target Delta-8 THC Edibles Resembling Popular Snacks: The Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) are taking action against companies selling delta-8 THC edibles packaged to resemble popular snacks, often marketed towards children. Delta-8 THC is a psychoactive substance found in the Cannabis sativa plant, which includes both cannabis and hemp varieties. The FDA and FTC have expressed concerns about these products’ packaging, which mimics well-known snacks and candies, potentially leading to accidental consumption by children and unsuspecting adults.

#5 Verano Holdings Corp., a Chicago-based cannabis operator, has reached an agreement to acquire the plant-touching operations of The Cannabist Co. in Arizona and Virginia. The acquisition, valued at $105 million in a mix of cash, stock, and promissory notes, will expand Verano’s presence to 14 U.S. markets, according to a Monday announcement.

In Arizona, Verano will invest $15 million in cash to acquire The Cannabist Co.’s cultivation site, production facility, and two retail stores in Prescott and Tempe. In Virginia, the assets include a cultivation site, a production facility, and six retail stores.

Upon finalizing the deal, Verano will:
– Pay $20 million in cash,
– Issue $40 million in Class A subordinate voting shares,
– Provide a $30 million promissory note,
totaling $90 million.

Virginia’s home delivery allowance for cannabis will position Verano as the exclusive cannabis operator in a zone covering Chesapeake, Norfolk, and Virginia Beach. However, The Cannabist Co.’s operations in the Richmond area, including an 80,000-square-foot cultivation and manufacturing space and five stores, are excluded from this deal.

This acquisition follows The Cannabist Co.’s June announcement of cost-cutting measures, including divesting assets in Florida, closing a retail store in Trinidad, Colorado, and reducing operations in New York.

Verano’s shares trade under the ticker VRNO on the Cboe Canada exchange, while The Cannabist Co., formerly Columbia Care, trades as CBSTF on Cboe Canada and over-the-counter markets.

Psychedelic Sector Update

#1 Study Highlights Psilocybin’s Significant Impact on Brain Function and Potential Therapeutic Uses: A recent small randomized controlled trial has revealed that a single high dose of psilocybin induces significant and persistent changes in brain functional networks in healthy adults. The findings, published in Nature, provide new insights into the effects of psychedelics on brain activity and their therapeutic potential.

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