In this week's "Rising High," The Fly's recurring series focused on cannabis and psychedelic stock news, The Fly looks back on acquisitions, a partnership and analyst views.

CRESCO LABS TO ACQUIRE COLUMBIA CARE: Cresco Labs (CRLBF) and Columbia Care (CCHWF) announced Wednesday they have entered into a definitive arrangement agreement pursuant to which Cresco Labs will acquire all of the issued and outstanding shares of Columbia Care. Subject to customary closing conditions and necessary regulatory approvals, the transaction is expected to close in the fourth quarter of 2022. Under the terms of the agreement, shareholders of Columbia Care will receive 0.5579 of a subordinate voting share of Cresco Labs for each Columbia Care common share held, subject to adjustment representing total consideration enterprise value of approximately $2B based on the closing price of Cresco Labs Shares on the Canadian Securities Exchange as of March 22.

The transaction provides Columbia Care Shareholders with premiums per Columbia Care Share of approximately 16% based on the closing prices of the Columbia Care Shares and the Cresco Labs Shares, and 19%, based on the 20-day volume weighted average prices of the Columbia Care Shares and the Cresco Labs Shares, each on the CSE as of March 22, 2022. After giving effect to the transaction, Columbia Care Shareholders will hold approximately 35% of the pro forma Cresco Labs. The agreement provides for certain customary provisions, including covenants in respect of non-solicitation of alternative transactions, a right to match superior proposals, a $65M termination fee payable to Cresco Labs under certain circumstances.

Following the news, Stifel analyst Andrew Partheniou downgraded Cresco Labs to Hold from Buy with a price target of C$8, down from C$30, citing Q4 results below expectations and the announcement of what he identifies as "the second largest acquisition in U.S. cannabis history" with its deal to buy Columbia Care. Should the deal close and be successfully integrated along management's expectations, he believes Cresco has the potential to enhance its position through greater scale and access to capital, but he sees risks, including risk to the transaction being terminated given limited visibility on the likelihood of Columbia getting the necessary shareholder and regulatory approvals. He also sees "material execution risk" as both companies prepare for conversions while securing deal approval and integrating prior acquisitions, he said.

AURORA TO PURCHASE THRIVE: Aurora Cannabis (ACB) announced Tuesday that the company has reached an agreement to acquire all of the issued and outstanding shares of TerraFarma, parent company of Thrive Cannabis. The transaction is based upon aggregate consideration of $38M payable in cash and Aurora common shares, plus two earnout amounts payable in Aurora Shares or cash if applicable, based on Thrive achieving certain revenue targets within two years of closing of the transaction. The company said, “The transaction is expected to strategically strengthen Aurora's position in the Canadian market by placing the Thrive team in charge of Aurora's Canadian recreational portfolio, advancing the shift in focus to innovative premium products including dried flower, pre-rolls, vapor products, and concentrates.” The transaction is expected to close, subject to customary closing conditions, in Aurora's fiscal 4Q22. It is anticipated that the transaction will provide immediate positive Adjusted EBITDA to Aurora, and support the company's path to Adjusted EBITDA profitability in the first half of fiscal 2023. Founded in 2018, Thrive is a licensed producer of super-premium cannabis concentrates and craft dried flower.

INTERCURE, CLEVER LEAVES ENTER PARTNERSHIP: InterCure (INCR) and Clever Leaves Holdings (CLVR) announced Tuesday the execution of an exclusive multi-year cultivation, marketing and distribution agreement. Over the term of the agreement, InterCure will have access to Clever Leaves' high-THC medical cannabis flower to serve several medical cannabis markets, including the Israeli market. As part of the partnership, Clever Leaves will cultivate InterCure's high quality strains to launch InterCure's EU-GMP compliant branded products within the EU, UK and South American markets. Pursuant to the agreement, Clever Leaves and InterCure agreed to collaborate on certain technical matters for the development of new products in an attempt to satisfy the needs of patients in different countries. Activities under the partnership are subject to compliance with all applicable laws, including receipt of all requisite approvals from all applicable regulatory authorities including the Israeli Ministry of Health.

CANOPY GROWTH DOWNGRADE: Barclays analyst Gaurav Jain downgraded Canopy Growth (CGC) to Underweight from Equal Weight on Tuesday with a price target of $6, down from $9. The company needs a "big restructuring" to lower its breakeven point and stem its "cash bleed," Jain said. The analyst thinks the leaf growing businesses are challenged in the current market environment and that investors looking for cannabis exposure should invest in Scotts Miracle-Gro (SMG).

Additionally on Tuesday, Canopy Growth's scientific research team has announced results from a six-month, randomized clinical trial studying the effects of cannabidiol on menstrual-related symptoms. This study was conducted in collaboration with Jessica Irons and Morgan Ferretti at James Madison University in Harrisonburg, Virginia. Nearly 75% of reproductive-aged menstruating individuals report experiencing unpleasant menstrual-related symptoms, ranging from cramping and bloating to back pain and shifts in mood including irritability and stress. This study marks the first exploration of the effects of cannabinoids for symptom management. Over the course of six months, 40 participants who experienced moderate to severe menstrual-related symptoms were randomized to receive 160mg or 320mg of CBD, in divided doses twice daily for 5 days each month beginning the first day they experienced symptoms. Results showed significantly reduced menstrual-related symptoms over the 6 months relative to a one-month baseline, and the higher dose was also effective in significantly reducing irritability and stress over the same period.

WESANA REPORTS DATA FROM PSILOCYBIN STUDY: Wesana Health Holdings (WSNAF) announced Monday data from an animal study, conducted by an independent global laboratory services provider in a validated model of depression. Results of the study showed that administration of imipramine given three weeks following a psilocybin loading dose provided an additional 39% further improvement in depressive behaviors from that of psilocybin loading dose alone. Furthermore, a second administration of imipramine given four weeks after a psilocybin loading dose provided an even greater reduction in depressive behaviors. "These results demonstrate that psilocybin has the ability to potentiate the effects of antidepressant medications," said Mark Wingertzahn, Wesana Chief Scientific Officer. "These data could signal a shift in how we develop future clinical treatments for depression using both psilocybin and anti-depressants to optimize outcomes." While there are a number of available therapies to treat depression, only 60%-70% of patients respond to antidepressant therapy. Of those who do not respond, 10%-30% exhibit treatment-resistant symptoms, highlighting the need for additional therapeutic options. Further, despite the established importance of treating depression, only 44% of TBI patients with major depressive disorder received antidepressants or counseling. Of those treated, there is limited evidence supporting the efficacy of antidepressants in the treatment of post-TBI depression. These new findings suggest that combination therapy could provide more consistent and robust effects over time.

OTHER CANNABIS/PSYCHEDELIC STOCKS: Publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Atai Life Sciences (ATAI), Awakn Life Sciences (AWKNF), Audacious (AUSAF), AYR Wellness (AYRWF), BC Craft (CRFTF), Body and Mind (BMMJ), CanaFarma (CNFHF), Cannara Biotech (LOVFF), RIV Capital (CNPOF), Chicago Atlantic (REFI), CordovaCann (LVRLF), Cronos Group (CRON),  Compass Pathways (CMPS), CV Sciences (CVSI), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Delic Holdings (DELCF), Delta 9 (DLTNF), Fire & Flower (FFLWF), Flora Growth (FLGC), FluroTech (FLURF), Gage Growth (GAEGF), General Cannabis (CANN), Goodness Growth (GDNSF), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), Ketamine One (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), NewLake Capital (NLCP), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Relmada (RLMD), RYAH Group (RYAHF), Skye Bioscience (SKYE), Sproutly (SRUTF), Stem Holdings (STMH), Small Pharma (DMTTF), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Verano Holdings (VRNOF), Village Farms (VFF), Entourage Health (ETRGF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).