In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, we look back over Aurora's Q4 earnings, the Tilray and Privateer agreement and an analyst initiation of Trulieve.
AURORA CANNABIS EARNINGS: Aurora Cannabis (ACB) reported fourth quarter earnings results on Wednesday, posting net revenue of C$98.9M, up 52% from C$65.1M in the prior quarter, and adjusted EBITDA loss of C$11.7M, which compares to C$36.6M in Q3. The company also reported active registered patients of 84.7K, up 10% sequentially, and cannabis kilograms sold of 17.8K vs. 9.2K last quarter. “In 2019 Aurora took its place as the global leader in cannabis production, research, innovation, and international market development. We are executing on all our strategic priorities," said CEO Terry Booth. "Our best in class cultivation methods allow us to grow consistent, high-quality cannabis at scale. Because of this, we've delivered solid revenue growth in the fourth quarter. We are working to extend our reach in the U.S. markets. Our partnership with the UFC is a basis to explore CBD-from-hemp and hemp food products. We are also exploring additional opportunities and leveraging our strategic advisor."
TILRAY, PRIVATEER EXTEND LOCKUP: Tilray (TLRY) announced Monday that it has signed a merger agreement with its largest stockholder Privateer for a transaction that will extend the lock-up on and provide for the issuance of up to 75M Tilray shares to Privateer's equity holders. These shares currently represent 77% of Tilray's total shares outstanding. Tilray and Privateer previously announced the signing of a non-binding letter of intent for this transaction on June 10. Under the terms of the agreement, the parties will effect a downstream merger of Privateer with and into a wholly-owned subsidiary of Tilray, with the Tilray subsidiary surviving the merger and the issuance by Tilray to Privateer equity holders of newly issued and registered shares of Tilray common stock and options to purchase shares of Tilray common stock in an aggregate amount equal to the number of Tilray common shares currently held by Privateer.
TRULIEVE INITIATED WITH A NEUTRAL: Compass Point analyst Rommel Dionisio initiated Trulieve Cannabis (TCNNF) with a Neutral and $9 price target. Trulieve is the first licensed cannabis producer in Florida, and the current cap on the number of dispensaries in Florida is set to expire in April 2020, the analyst wrote in a Thursday note to investors. Dionisio believes Trulieve's leading market share could come under "severe pressure" and said incremental growth outside of Florida might not be enough to offset market shares losses within Florida.
GREENLANE LOOKS TO EXPAND HIGHER STANDARDS: Greenlane Holdings (GNLN) announced Monday the launch and expansion of the company's Higher Standards brand and retail concept in Europe in partnership with Paris-based NOUS. NOUS and Higher Standards are joining forces to bring Higher Standards branded and curated shops-in-shops to NOUS stores. Slated to open in the fourth quarter, the first Higher Standards shop-in-shop will be located in NOUS' Paris boutique, with plans for further expansion throughout Europe. Additionally, the company announced Thursday a tenant representation agreement with Jamestown for the North American expansion of its Higher Standards stores. Higher Standards opened its first flagship store at Chelsea Market in 2017, followed by a second flagship store at Jamestown's Ponce City Market in March. Greenlane expects to have four Higher Standards stores operational in North America by year-end, with plans for continued domestic and international expansion.
INNOVATIVE INDUSTRIAL PROPERTIES ACQUIRES CALIFORNIA PORTFOLIO: Innovative Industrial Properties (IIPR) announced Thursday that it closed on the final parcel of a four-property portfolio in southern California, which comprises approximately 79,000 square feet of industrial space in total. The purchase price for the southern California portfolio was approximately $17.3M in the aggregate. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease at each property with a subsidiary of Medical Investor Holdings for continued operation as licensed cannabis cultivation, extraction, manufacturing and distribution facilities in accordance with California regulations. Vertical is a multi-state operator licensed for cannabis cultivation, extraction, manufacturing and distribution in California and cultivation operations in Arizona and Ohio, with an extensive portfolio of branded cannabis products.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Aphria (APHA), Canopy Growth (CGC), CV Sciences (CVSI), CannTrust Holdings (CTST), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), ICC International Cannabis (KNHBF), Biome Grow (BIOIF), MediPharm Labs (MEDIF), Indiva (NDVAF), KushCo (KSHB), MedMen Enterprises (MMNFF), Elixinol Global (ELLXF), Planet 13 Holdings (PLNHF), Wayland Group (MRRCF), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), Organigram (OGI), Origin House (ORHOF), Sunniva (SNNVF), Sproutly (SRUTF), DionyMed Brands (HMDEF), GrowGeneration (GRWG), Harvest Health & Recreation (HRVSF), Zynerba (ZYNE), Delta 9 (VRNDF), Canopy Rivers (CNPOF), Westleaf (WSLFF) and Tetra Bio Pharma (TBPMF).
