The Week In Cannabis: Stocks Spike By Double Digits On Earnings, Strong Sales, Financings

Market Trading EssentialsJanuary 16, 2021

6 minutes read

Cannabis stocks widely outperformed the markets after a slew of financing deals and strong earnings reports.

“The cannabis industry is off to a great start this year with New York state pushing hard for legalization,” Green Market Report editor-in-chief Debra Borchardt said. “In addition to that several companies like GrowGeneration and GW Pharmaceuticals reported stellar earnings. Plus, Subversive Capital closed on the largest SPAC in the industry. Hopefully, the good news in 2021 will continue unlike the curveball thrown at us in 2020.”

ETFs were all up by double digits. Over the last five trading days:

The ETFMG Alternative Harvest ETF (NYSE: MJ): gained almost 18%
The AdvisorShares Pure Cannabis ETF (NYSE: YOLO): was up almost 12%
The Cannabis ETF (NYSE: THCX): rose 18.4%
The Amplify Seymour Cannabis ETF (NYSE: CNBS): advanced 13.9s%
The SPDR S&P 500 ETF Trust (NYSE: SPY) was down 1.57%

Benzinga Cannabis content is now available in Spanish on El Planteo.

Sale Trends

Cannabis sales in Michigan hit $984.6 million in 2020. Medical cannabis sales accounted for $474 million for the year, while adult-use sales reached $510.7 million.

Rhode Island and the Soboba Band of Luiseno Indians received approvals from the U.S. Department of Agriculture (USDA) for its hemp regulatory proposals.

The Christmas and New Year’s holidays marked the single biggest cannabis sales period of 2020. The period between Dec. 18 and Dec. 24 generated roughly $427 million, according to Akerna (NASDAQ: KERN). The largest sale day of the period was Wednesday, Dec. 23, with $87.3 million, making it the third largest cannabis sales of the year, just behind Green Wednesday with $87.4 million. Exceeding all expectations, New Year’s Eve was the single biggest sales day of 2020 with $89.4 million.

“The last two weeks of 2020 were easily one of the most profitable weeks of the year for cannabis retail,” Akerna CEO Jessica Billingsley told Benzinga. “If we’ve learned anything from 2020, it’s that cannabis is resilient, profitable, and exceedingly popular with U.S. consumers.”

Financings And M&A

Ayr Strategies Inc. (OTCQX: AYRWF) is offering 4 million voting shares with a price of CA$34.25 per share for total gross proceeds of around CA$137 million.

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) acquired Bluma Wellness Inc. (CSE: BWEL) (OTCQX: BMWLF) in an all-share transaction worth $213 million.

PureK Holdings Corp‎. (TSXV: PKAN) announced plans to acquire the BudaPets brand.

Curaleaf Holdings Inc. (OTCQX: CURLF) finalized a $50 million, three-year secured revolving credit facility.

Gold Flora formed a strategic partnership with Stately Capital Corporation to bolster development of the company’s California-based vertically integrated operation. Stately Brands also agreed to inject CA$10 million ($7.8 million) and contribute other assets to support the Gold Flora’s expansion.

Red White & Bloom Brands Inc. (CSE: RWB) (OTCQX: RWBYF) wrapped up its purchase of Platinum Vape after making a final cash payment of $13 million to the sell-side of the $35 million deal.

Vext Science Inc. (CSE: VEXT) (OTCQX: VEXTF) disclosed plans sto raise $18 million through a bought deal offering of its units.

The Blinc Group, Inc. announced the closing of a pre-Series A bridge financing of $1.5 million. The round was led by Equitas Partners Fund, WGD Capital, LP, and 7thirty Capital.

Kaya Holdings Inc. (OTCQB: KAYSD) agreed to buy a 50% interest in Athens, Greece-based Greekkannabis SA. Through its subsidiary, Kaya Brands International Inc., the company initially acquired a 25% interest in Greekkannabis via a share transfer deal with current Greekkannabis shareholders on Jan. 11.

Village Farms International Inc. (NASDAQ: VFF) (TSX: VFF) raised some $135 million through a direct offering of about 10.9 million shares.

A consortium made up of CMG Partners Inc., Left Coast Ventures Inc. and Shawn Carter (Jay-Z) —with his company Roc Nation — finalized a deal with Subversive Capital Acquisition Corp. (OTCQX: SBVCF). The newly formed company has been dubbed TPCO Holding Corp., or The Parent Company.

French energy company Qairos Energies is financing a project that will use locally grown hemp for the production of hydrogen and methane. The Mareil-en-Champagne-based company will fund a new facility with almost €18.8 million ($23 million).

Power REIT (AMEX: PW) purchased a 4.3-acre property in Ordway, Colorado. The property has been leased by The Apotheke, a Minority Woman-Owned Business run by dispensary operator Viviana Fernandez. Power REIT is set to financially support the 21,558 square-foot property — which includes a greenhouse and processing facility — with $1.8 million.

Earnings

Aphria Inc. (TSX: APHA) (NASDAQ: APHA) posted net cannabis revenue of CA$67.9 million for the second quarter of 2021 — 99% higher than in the prior-year quarter. Overall, net revenue hovered CA$160.5 million ($126.6 million). That’s up by 33% from the same period in fiscal 2020.

GW Pharmaceuticals plc (NASDAQ: GWPH) released preliminary unaudited financial results for the fourth quarter. Net sales are expected to be around $148 million. For the full year, GW anticipates net sales of $526 million while its total Epidolex preliminary net product sales reach around $510 million — compared to $296 million in 2019. The company also revealed it held cash and cash equivalents of around $486 million at the end of the year.

Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) posted financial results for the first quarter of fiscal 2021, reporting a net loss of $34.4 million, or 17 cents per share on a diluted basis, which compares to a net loss of $900,000, or one cent per share in the same quarter of fiscal 2020.

GrowGeneration Corp. (NASDAQ: GRWG) made $192 million in revenue over the last year. That’s a year-over-year increase of 140%. The company expects its full-year 2021 revenue to range between $335 million-$350 million.

KushCo Holdings Inc. (OTCQX: KSHB) achieved $26.8 million in revenue over the first quarter of 2021. That’s down by 23% compared to the prior year. Cypress, a California-based company, attributed the decline in revenue to the elimination of the hemp trading division, as well as the implementation of its comprehensive strategic plan. KushCo also achieved positive adjusted EBITDA of $500,000 compared to a $6.8 million loss in the previous year.

Next Green Wave Holdings Inc. (CSE: NGW) (OTCQX: NXGWF) generated approximately $4.7 million in revenue, compared to $3.6 million in the prior period and $150,000 in the corresponding quarter of 2019. Adjusted positive EBITDA of $2.3 million compared to a $2.15 million loss in the fourth quarter of last year.

See all on these results at Benzinga Cannabis’ Earnings Center.

More News

Truss CBD USA, a joint venture between Molson Coors Beverages Co. (NYSE: TAP) and HEXO Corp. (NYSE: HEXO), is launching a new line of CBD beverage in Colorado. The product, dubbed Veryvell, is a sparkling CBD water and non-alcoholic CBD beverage with zero sugar and calories.

Israeli cannabis company Together Pharma (TLV: TGTR) completed the import of 1.7 tons of medical grade cannabis from the Uganda farm of that it own.

“We continue our efforts in growing and selling high quality medical cannabis consisting of strains that are in high demand on the market, while strengthening our presence in the cannabis supply chain through increased market presence”’ Nir Sosinsky, co-founder and managing director at Together Pharma, told Benzinga.

BIOMEDICAN will spin off a new company, SciFeed, and produce a compound called Astaxanthin — an antioxidant with a market value of more than $1 billion. “The largest segment of the Astaxanthin market is salmon and trout feed,” President Dennis O’Neill said. “Although human consumption is increasing, it is still a much smaller piece of this market. Focusing on the fish farms will create a better and more focused effort for maximizing these markets.”

Tyson Ranch, a packaging and licensing company founded by Mike Tyson, announced it is expanding into Oklahoma. The Cookies store in Oklahoma City will begin carrying Tyson Ranch’s Undisputed 87 Pre-Rolls starting on Saturday, Dec. 19.

“With Oklahoma being one of the hottest cannabis markets in the United States, it made a lot of sense to partner with Tyson Ranch to bring the best in health and wellness to the medical cannabis patients of Oklahoma,” Tyler Dodd, founder and CEO of Arca Bellum, Tyson Ranch’s Oklahoma partner, told Benzinga.

TILT Holdings Inc (OTCQX: TLLTF)’s inhalation technology subsidiary Jupiter Research can now supply the U.S. and European medical cannabis markets with medical-grade inhalation devices.

TILT CEO Mark Scatterday said the successful completion of the ISO certification process “opens the door for the expansion of growth opportunities with the development of inhalation device”s created specifically for the medical cannabis community. It’s also expected to provide more pathways into the European medical marijuana market.

Arrive Market launched a digital marketplace for lab-tested cannabidiol (CBD) products.

“We’ve seen the significant increase in companies entering the CBD space over the last few years, but we noticed that consumers were left with questions about the integrity of products and brands. Many products are not properly lab tested, and many that are ‘mystery tested’ by third parties are later found to have presented wildly inaccurate information,” said Emily Lee, director of marketing at Arrive Market. “The need for an approachable, trustworthy resource and one-stop-shop for CBD became very apparent, so we launched Arrive Market to help fill that gap.”

Terra Vera launched in the U.S., offering solutions to replace conventional pesticides and increase product safety and consumer confidence within the cannabis industry. Using patented technologies compliant with EPA regulations, Terra Vera provides cannabis companies with a safe, effective, and sustainable approach to rid crops of contaminants while preserving the quality and yield of their products.

Media compliance company Fyllo partnered with OpenGov, a leader in modern cloud ERP software for governments and state agencies, to create a comprehensive cannabis licensing, regulatory, and compliance tracking solution.

Cannabis brand Cookies is expanding its line to include non-psychoactive mushroom formulations.

The California-based company is rolling out a capsule line called “Caps.” The three-in-one item combines mushrooms with cannabinoids and terpenes.