Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Key Takeaways; Cannabis Sector
• Organigram received C$124.6 million investment from BAT; the company also announced the appointment of an interim CFO.
• Trulieve posts robust Q3 2023 financial results, showcasing strong financial performance, debt reduction, and strategic growth initiatives.
• Canopy Growth reported narrowed Q2 losses, indicating a positive shift amid restructuring efforts.
• Curaleaf’s Q3 results showcased strategic shifts amid expansion and exits.
• TerrAscend achieved record third quarter 2023 results and raised full-year guidance.
• Ascend Wellness impressed in Q3 surpassing revenue estimates by 33%.
Key Takeaways; Psychedelic Sector
• Cybin plummeted 15% following $64 million offering announcement.
• Awakn’s Prof. David Nutt is the world’s top psychopharmacologist according to ScholarGPS.

This week marked another earnings week as majority of multistate operators in the cannabis sector reported their financial results. Below is a weekly overview of the cannabis and psychedelic sectors, summarizing the noteworthy news that impacted the industry during the initial week of November.
Top Marijuana Companies for Week

#1: Organigram
Organigram Holdings Inc. (NASDAQ: OGI) witnessed a remarkable surge of over 35% on Monday following the announcement of a significant C$124.6 million investment from BT DE Investments Inc., a subsidiary of British American Tobacco p.l.c.(LSE: BATS) (NYSE: BTI). British American Tobacco (BAT), a leading consumer goods business, aims to strengthen its strategic partnership with Organigram through this investment.
Organigram stated that the investment will be used to create a strategic investment pool named “Jupiter,” aiming to accelerate Organigram’s growth plans beyond Canada. This includes geographic expansion, technological advancements, and product development. The strategic move will undoubtedly position Organigram as a prominent player in the rapidly consolidating cannabis market.
This strategic partnership between Organigram and BAT was established in March 2021, and has yielded significant progress, particularly through the Product Development Collaboration (PDC) agreement. The PDC is focused on developing innovative cannabis science and research and development (R&D) projects. The collaboration is in the late stages of developing various products, including emulsions, novel vapor formulations, flavor innovations, and packaging solutions, expected to be applied to Organigram’s portfolio in 2024.
In other news, Organigram announced the appointment of Paolo De Luca as interim Chief Financial Officer, effective November 13, 2023. The company said that the current CFO, Derrick West, was transitioning away from the role to focus on health and recovery after surgery. De Luca, the current Chief Strategy Officer, previously served as Organigram’s CFO between 2017 and 2020.

#2: Trulieve
Trulieve Cannabis Corp. (OTC: TCNNF) reported its financial results for the third quarter of 2023, showcasing substantial cash generation and strategic financial moves. The company revealed cash flow from operations of $93 million and free cash flow of $87 million during the quarter. Notable achievements included a reduction in debt through the purchase of $57 million of 2026 notes, resulting in a 16.5% discount to par, and the announcement of the redemption of $130 million of 2024 notes, projecting $20 million in interest savings.
Moreover, Trulieve reported a revenue of $275 million, with 96% generated from retail sales, and achieved a GAAP gross margin of 52%. Additionally, the company opened new dispensaries, expanded its reach outside Florida, and realized a 235% increase in Maryland traffic in Q3 compared to Q2.
The financial highlights also included an anticipated operating cash flow of at least $100 million and free cash flow of at least $70 million for the year 2023. Trulieve also emphasized its focus on strengthening its balance sheet and commitment to non-dilutive measures. Other significant developments that were highlighted included, the redemption of senior secured notes and the filing of amended federal tax returns for a $143 million refund.
The company’s CEO, Kim Rivers, expressed confidence in the company’s strong cash generation, strategic positioning, and readiness for future growth catalysts; “This year our team has done a phenomenal job executing on our plan to generate cash while making investments to support future growth,” said Kim Rivers.

#3: Canopy Growth
Canadian cannabis producer Canopy Growth Corporation (NASDAQ: CGC) showcased improved financials for the second quarter ended September 30, 2023, indicating signs of a potential turnaround. The company reported a net revenue of CAD 70 million, accompanied by a gross margin of 34%, a notable improvement from the negative margin reported in the same period the previous year. Additionally, operating expenses were down nearly 80% at C$30.43 million, and the company reduced costs by C$54 million during the quarter. This positive shift can be attributed to cost-cutting measures and restructuring initiatives that the company has been undertaking.
Canopy Growth’s net revenue, however, fell 21% to C$69.6 million. This indicates that the company is still experiencing liquidity issues, with CFO Judy Hong stating that significant actions have been taken to eliminate near-term debt obligations.
In terms of product development, Canopy Growth expanded its portfolio, resulting in increased market share. The medical cannabis segment reported its fourth consecutive quarter of revenue growth. Internationally, the company stated that they are still focusing on high-growth markets such as Australia and working to obtain EU-GMP certification for its facility in Kincardine, Ontario, to meet global medical cannabis demand.
Despite positive improvements in its U.S. operations and plans for market expansion, Canopy Growth is still facing regulatory hurdles regarding the creation of a new entity that would incorporate both its Canadian and U.S. investments. The company said that they are actively negotiating and engaging in discussions with the U.S. Securities and Exchange Commission to address concerns and explore additional structural amendments for the financial deconsolidation of Canopy USA from Canopy Growth’s results.

#4: Curaleaf
Curaleaf Holdings Inc. (OTC: CURLF) announced its third-quarter financial results on Friday, showcasing a 2% increase in net revenue to $333.2 million compared to the same period in 2022. While this growth was attributed to the company’s expansion and diversification efforts, it fell slightly short of analysts’ expectations by approximately $7 million.
The company reported a net loss of $92.3 million for the quarter, a significant rise from the $51.4 million loss in Q3 2022. This increase in losses was primarily influenced by a non-cash impairment charge related to the company’s exit from operations in Michigan and Kentucky.
Despite the overall net loss, Curaleaf’s retail sector experienced a 6% revenue increase, reaching $273.2 million. This growth was fueled by the launch of adult-use sales in Maryland and Connecticut, as well as ongoing expansion efforts in New Jersey.
Wholesale revenue, however, remained unchanged from the second quarter and showed a 12% decline from the previous year. The company attributed this decrease to strategic inventory reductions.
In addition, the company’s balance sheet reflects an aggressive investment strategy, with $49.4 million in capital expenditure focused on cultivation and retail expansion in key markets. As of the end of the quarter, Curaleaf had $118.1 million in cash and a net debt of $584.6 million.
Geographically, Curaleaf has shifted its focus, with exits from Michigan and Kentucky and agreements to sell its Oregon assets. The company has also made strides in the European market, acquiring assets in Portugal and initiating sales in the U.K. and Poland.

#5: TerrAscend
TerrAscend Corp. (OTC: TSNDF), a prominent North American cannabis operator, reported remarkable financial results for the third quarter ending September 30, 2023. The company’s net revenue surged to $89.2 million, marking a 34.7% increase year-over-year and a 23.7% sequential growth. Notably, TerrAscend achieved a gross profit margin of 53.6%, showcasing a 340-basis point improvement from the previous quarter.
The company’s adjusted EBITDA from continuing operations reached $24.2 million, demonstrating an 89% sequential increase and a 27.1% adjusted EBITDA margin. Encouraged by these positive trends, TerrAscend revised its full-year 2023 guidance, anticipating net revenue and adjusted EBITDA from continuing operations to reach $320 million and $73 million, respectively. This adjustment signifies a robust 29% and 87% year-over-year growth, underscoring the company’s sustained momentum.
TerrAscend’s impressive financial performance is attributed to several strategic moves, including the successful transition to adult-use sales in Maryland, strengthened market share in New Jersey, improved gross margins in Michigan, and renewed growth in both retail and wholesale sectors in Pennsylvania. The company’s expansion strategy, from ‘deep, not wide,’ is evolving to ‘deep and wide,’ reflecting its confidence in capitalizing on emerging opportunities while maintaining control over its terms.
In addition to financial achievements, TerrAscend celebrated operational milestones during the third quarter, marking its eighth consecutive quarter of sequential net revenue growth and the fifth consecutive quarter of positive cash flow from continuing operations. The company also secured the second position in the New Jersey market, boasting an 18.6% market share.

#6: Ascend Wellness
New York-based Ascend Wellness Holdings, Inc. (OTC: AAWH) reported a robust third-quarter performance, exceeding analysts’ revenue estimates by an impressive 33%. The company’s strategic initiatives, which include cost-cutting measures and operational optimization, played a crucial role in achieving these strong results.
Ascend’s gross revenue for the period ending September 30 rose by 26.6% from the previous year, reaching $169.9 million. Net revenue, excluding internal sales impact, demonstrated an even more substantial growth of 27%, successfully mitigating broader retail challenges. Additionally, the company’s emphasis on same-store sales proved fruitful, with retail revenue increasing by 22.3% to $101.3 million, particularly driven by strong consumer demand, especially in Maryland where adult-use sales commenced earlier this year.
Ascend’s wholesale operations also flourished, experiencing a notable 33.4% rise in gross revenue year-over-year, reflecting a well-received wholesale strategy in a market evolving in sophistication and scale.
Despite reporting a net loss of $11.2 million, there was a marked improvement compared to the previous year. The adjusted EBITDA improved by 38.5% from the previous quarter, with sequential margin growth of 356 basis points. Moreover, Ascend’s financial position, with $63.9 million in cash and cash equivalents, provides a cushion, although the company maintains a net debt position of $243.5 million. The operational cash flow was also encouraging, with Ascend generating $24.2 million in the quarter, marking its third consecutive period of operational cash positivity.
Newly appointed CEO John Hartmann expressed optimism, stating, “In my first full quarter as Ascend’s CEO, we’ve been diligently optimizing operations and fortifying our team. Early signs of results are encouraging.”

Top Psychedelic Companies for Week

#1: Cybin
Cybin Inc. (NYSE: CYBN) announced a firm commitment underwritten offering of 66,666,667 units at a price of US$0.45 per unit. This move aimed to generate approximately US$30 million in gross proceeds, with an additional US$34 million possible upon full exercise of the warrants. The units comprised common shares and purchase warrants, with A.G.P./Alliance Global Partners serving as the sole book-running manager for the offering. The closing was expected around November 15, 2023, pending market and customary conditions, including approval from the Neo Exchange Inc.
The net proceeds, designated for advancing the CYB003 and deuterated DMT programs and general corporate purposes, were part of a prospectus supplement filed with the Ontario Securities Commission and the United States Securities and Exchange Commission (SEC). Prospective investors were advised to review the Base Shelf Prospectus and related documents before making investment decisions.
Simultaneously, Cybin suspended sales under the Lincoln Park Capital Fund agreement, which allowed the company to issue common shares to LPC. The decision to halt purchases under this agreement aligned with the company’s strategic focus on the ongoing public offering.
This announcement triggered a notable 15% drop in Cybin’s stock value on the same day, reflecting the market’s response to the significant financial decision.

#2: Awakn
In a groundbreaking achievement, Prof. David Nutt, a renowned figure in the field of psychopharmacology, was ranked as the world’s leading psychopharmacologist by ScholarGPS. This prestigious acknowledgment is not only a testament to Professor Nutt’s remarkable career but also a reflection of his current role as a vital part of Awakn Life Sciences Corp. (OTC: AWKNF), a company committed to developing innovative treatment options for individuals struggling with addiction.
The recognition of Prof. Nutt as the world’s top psychopharmacologist is not just an accolade; it is a reflection of his profound dedication to improving the lives of those affected by addiction. As the leader of Awakn’s distinguished team, Prof. David Nutt plays a pivotal role in developing groundbreaking treatments for addiction. This milestone serves as a testament to the dedication and commitment of Awakn Life Sciences in their mission to address addiction-related challenges with innovative, science-based solutions.
The partnership between Awakn Life Sciences and Prof. David Nutt stands as a beacon of hope for those who have struggled with addiction, as well as a testament to the power of science and innovation in addressing one of society’s most pressing health crises. This collaboration marks a significant step forward in the ongoing battle against addiction.