Week In Review: Massachusetts Cannabis Sales Hit Record $1.56 Billion in 2023; Pennsylvania Governor Advocates for Legalization; Cybin Inc. Awarded Patents in Japan

LOS ANGELES–Welcome to the far too-exciting world of cannabis and psychedelics, where it’s a tale of two markets: there’s innovation and progress in full swing in some parts of the country, while in other parts, the industry is on the ropes largely due to collapsing cannabis prices and lack of access to capital, making cannabis business models very challenging.  This week’s ‘Week In Review’ is a roundup of key developments in the industry, showcasing the news from key companies and people making news in the space.

Capital Markets

Following five consecutive weeks of gains, the US cannabis MSOS ETF experienced a 5.68% decline, while the global YOLO ETF dropped by 3.95%. Year-to-date, MSOS rose by 37.37% and YOLO by 20.86%.

The anticipation of Schedule III and 280E removal continues to fuel the outperformance of US cannabis stocks, with MSOS attracting $44.07 million in inflows for the week. Ascend (CSE: AAWH, OTCQX: AAWH) surged by 11.41% and was newly incorporated into the MSOS ETF, marking a significant development as Ascend had been the sole top 20 US cannabis stock absent from the ETF.

Meanwhile, LEEF Brands (CSE: LEEF, OTCQX: LEEEF) in California saw a 2.96% increase this week following the announcement of a nursery joint venture with Lifted Organics, aimed at enhancing genetic offerings and supply chain efficiency.

Pennsylvania Governor Josh Shapiro advocated for the legalization of adult-use cannabis during his annual budget address, proposing a July 1 legalization for possession and consumption, with full adult-use sales slated to begin on January 1, 2025.

Trulieve (CSE: TRUL, OTCQX: TCNNF) holds the most dispensaries in Pennsylvania at 20, while Jushi (CSE: JUSH, OTCQX: JUSHF) boasts 18, providing it with significant exposure when dispensaries are considered in relation to enterprise value.

Data from Headset and BDSA indicate that Cresco (CSE: CL, OTCQX: CRLBF), Green Thumb (CSE: GTII, OTCQX: GTBIF), and Verano (NEO: VRNO, OTCQX: VRNOF) are among the leading brands in Pennsylvania.

Ongoing Legal Battles and Ethical Concerns Cast Shadows

In the midst of market fervor, recent developments have shed light on the ethical and legal complexities of the cannabis industry. Norman Jousif, CEO of OTC, faced backlash after shocking comments revealed his disregard for paying small “mom and pop” cannabis brands, dismissing them as expendable.

Conversely, Elliot Lewis, CEO of Catalyst, see our interview with Elliot here, has been championing tax reductions in the cannabis sector, promising to reshape its financial landscape. Amidst these contrasting narratives, the cannabis industry, as showcased in our interview with Elliot at the Beard Bros Pharms Event, is undergoing profound shifts. As stocks dominate headlines and investors’ attention, the industry confronts regulatory challenges and ethical imperatives.

It’s evident that the cannabis revolution persists, transcending mere stock market dynamics, and demands close scrutiny as it navigates its future course. the market fervor, recent developments have also cast shadows on the industry’s ethical and legal landscape.

We also have updates here for the New York market: https://highlycapitalized.com/insights/challenges-persist-in-new-yorks-transition-to-legal-cannabis-market-amid-illicit-trade/

Week In Review:

#1. Massachusetts Cannabis Sales Hit Record $1.56 Billion in 2023: In an unprecedented achievement for the Massachusetts cannabis market, dispensaries across the state reported a record-breaking $1.56 billion in sales in 2023. This milestone, as reported by the Cannabis Control Commission (CCC) and highlighted by Boston 25 News, underscores the robust consumer demand for legal, lab-tested cannabis products despite facing several industry and regulatory challenges throughout the year.

#2.Pennsylvania Governor Shapiro Advocates for Cannabis Legalization: In a significant push towards cannabis reform, Pennsylvania Governor Josh Shapiro, a Democrat, has called upon lawmakers to fully legalize recreational cannabis, emphasizing the economic and social justice benefits such a move could bring to the state. During his annual state budget address, Shapiro’s proposal received immediate support from leading cannabis companies, reflecting the industry’s eagerness for market expansion.

#3 atai Life Sciences Appoints Anne Johnson as Chief Financial Officer: atai Life Sciences a pioneering  company specializing in mental health treatment innovations, today announced the promotion of Anne Johnson to Chief Financial Officer (CFO). Johnson, who has served as the interim CFO since October 2023 and Chief Accounting Officer since August 2022, will officially succeed Stephen Bardin in the CFO role. Bardin will remain with the company in an advisory capacity through March 31, 2024, to ensure a smooth transition.

While the expansion presents potential advantages for smaller retail operators seeking to offload their stores, some insiders in Ontario’s cannabis retail industry advise caution, noting that buyers’ offers may not align with sellers’ expectations.

Psychedelic Market Highlights:

#1. Cybin Inc. Awarded Patents in Japan: Cybin Inc. a biopharmaceutical industry dedicated to transforming mental healthcare with innovative psychedelic-based therapies, has achieved a significant milestone with the recent grant of two patents by the Japan Patent Office. These patents, numbered 2023-500532 and 2023-533436, mark a crucial step in the company’s quest to develop next-generation treatments for mental health disorders, including Generalized Anxiety Disorder (GAD).

#2. Hawaii Introduces Bill to Regulate Psilocybin Therapy Amid Growing Interest in Psychedelic Medicine; In an innovative step towards mental health treatment, Hawaii lawmakers have introduced legislation aimed at creating a regulatory framework for the therapeutic use of psilocybin. The proposed Senate Bill 3019, introduced by Sen. Chris Lee on January 24, alongside a companion House Bill 2630 by 14 representatives, seeks to protect patients opting for psilocybin therapy for conditions such as post-traumatic stress disorder, end-of-life anxiety, addiction, and more, without fully legalizing the substance.

Events

Highly Capitalized announce coverage and/or filming at the following upcoming events:

Blunt Brunch Women-only networking event; San Diego 23 February

Benzinga’s Cannabis Capital Conference Deal-making conference; Los Angeles 22nd February

Hall of Flowers Cannabis brands & business exposition March 13 & 14; Ventura, California

InternationalCBC Cannabis business exposition 14 March, Barcelona Spain

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

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

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