Week In Review: High Tide Repots Breakeven; TerrAscend say They’ve Got $26M in Tax Refunds; Cresco Still Expanding; Chicago Atlantic’s Balance Sheet Gets Better

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s earnings season with updates from some of the leading MSOs outlined below, along with a helping of innovations and financial insights from the Cannabis and Psychedelic markets. This past week the Hall of Flowers event attracted many brands and companies from all over cannabis land to the Ventura County Fairgrounds. Check out our review of Hall of Flowers Ventura here.

Cannabis Industry Highlights

#1. High Tide Inc.: This leading Canadian cannabis retailer has achieved a noteworthy milestone by reaching break-even net income in the first quarter of 2024, thanks to a significant increase in sales. The company attributes this success to its diverse revenue streams, including a strong performance from its data and insights platform, and an innovative customer loyalty program. High Tide’s strategic acquisitions, like that of the Queen of Bud, further exemplify its growth-oriented approach and its ambition to dominate the retail cannabis space.

#2. TerrAscend Corp.: In a bold move to navigate the burdensome 280E tax code, TerrAscend is aiming to reclaim $26 million in tax refunds. This initiative not only demonstrates the company’s proactive financial management but also highlights the broader challenges faced by cannabis companies due to the restrictive U.S. tax legislation. A successful reclaim could set a precedent for the industry, potentially leading to significant financial relief for similar enterprises.

#3. Cresco Labs Inc.: Despite reporting losses, Cresco Labs remains committed to expanding its market presence. The company’s strategic emphasis on cash reserves and adaptability underscores its long-term vision in a fluctuating market environment. Cresco’s persistence in exploring new opportunities indicates a strong belief in the sector’s potential for growth.

#4. Chicago Atlantic: This Cannabis REIT’s impressive 17% increase in interest income for the fiscal year 2023 signals a bullish outlook on cannabis-related real estate investments. Chicago Atlantic’s success is indicative of the growing interest in the cannabis sector from institutional investors and the potential for continued expansion as legislative reforms progress.

#5. Ayr Wellness Inc.: Ayr’s CEO has expressed optimism about the company’s expansion into adult-use weed markets, signaling strategic positioning to capitalize on emerging recreational cannabis opportunities. This forward-looking strategy is hoped to drive growth and strengthen Ayr’s market share in new and existing markets.

Psychedelic Sector Update

#1.  Awakn Life Sciences Corp.: By pioneering a ketamine-based therapy for Alcohol Use Disorder (AUD), Awakn Life Sciences has positioned itself at the forefront of psychedelic medicine. This breakthrough offers new hope for treating AUD, a condition with significant unmet medical needs, and exemplifies the therapeutic potential of psychedelics beyond traditional mental health applications.

Sector-Wide Developments

– Canopy Growth’s Retail Optimization: The closure of five Canopy Growth retail locations is a strategic decision aimed at enhancing operational efficiency. This move reflects the company’s efforts to streamline operations and focus on profitable growth areas, amidst the challenges of a competitive market.

– Aurora Cannabis Enters the U.S.: Aurora’s strategic acquisition to enter the U.S. market represents a significant milestone. By taking a majority stake in a leading U.S.-based CBD company, Aurora is not only diversifying its portfolio but also positioning itself to capture growth in the world’s largest cannabis market.

– Washington’s Tax Relief for Medical Cannabis: The elimination of the 37% tax on medical cannabis in Washington State marks a progressive step towards supporting medical patients and designated providers. This legislative change is expected to make medical cannabis more accessible and affordable, potentially setting a precedent for other states to follow.

– Pure Jamaican’s Global Ambitions: The initiative by Pure Jamaican and Seven Ten Limited to export pharmaceutical-grade cannabinoid products underscores Jamaica’s emerging role in the global cannabis market. Targeting major markets like the USA and Brazil, this move highlights the country’s potential as a key exporter of cannabis and hemp products.

– Cybin’s Funding Drive for Psychedelic Development: Cybin’s aim to raise $150 million through private placement underscores the growing investor interest in the psychedelic sector. These funds are earmarked for advancing the development of psychedelic drugs, indicating strong confidence in the therapeutic and commercial potential of psychedelics.

– Indiana’s Psilocybin Research Initiative: The state’s pending legislation to advance psilocybin research for mental health treatment highlights a growing recognition of the potential benefits of psychedelic substances. This initiative, particularly focused on veterans and first responders, could pave the way for broader acceptance and utilization of psilocybin in mental health care.

These developments across the cannabis and psychedelic sectors reflect a period of strategic repositioning, financial maneuvering, and innovative breakthroughs. As companies and states navigate regulatory, market, and scientific landscapes, the potential for growth and transformation in these industries continues to expand, promising exciting advancements in the near future.

Necann Boston is this week! March 22/23rd

The Cannabis Summit European Cannabis networking event; 11-12 April 2024

Benzinga Cannabis  April 16-17; Hollywood Florida

More dates are added regularly so follow Highly Capitalized for more information.

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