In this week's "Rising High," The Fly's recurring series focused on cannabis and psychedelic stock news, The Fly looks back on a rights acquisition, a partnership expansion and analyst views.
CORDOVACANN ACQUIRES RIGHTS TO PURCHASE AUBIO ASSETS: CordovaCann (LVRLF) announced Wednesday that on June 27, the company, through its wholly-owned subsidiary, CordovaCann Holdings, acquired the rights to purchase assets of AuBio Labs. AuBio is an arm's length California-based company that holds licenses, equipment and a leased facility to provide cannabis extraction services and manufactured products for sale to licensed cannabis retailers in the state. The assets will enable Cordova to produce a variety of cannabis products on both a white label and branded basis for the largest cannabis market in the world. AuBio, headquartered in Costa Mesa, California will launch a lineup of cannabis derivative products under the AuMor brand and will also produce extracts and end products for other licensed cannabis operators via tolling agreements and white label manufacturing contracts. The business is expanding its customer base and product offerings and will continue to be led by its founder. The assets include equipment for extraction and manufacturing, intellectual property related to various AuBio brands already in the market or that are expected to be launched, contracts regarding the distribution of branded products, and the option to secure the currently leased premises in Costa Mesa. The consideration for the transaction is $700,000, of which $100,000 was provided as a loan to AuBio on the closing date. Cordova will loan an incremental $100,000 on the monthly anniversary of the closing date for each of the next five months, and then provide a final loan amount of $200,000 on November 26, 2022. Upon providing the final loan tranche, Cordova has the option to convert the loan to equity for full ownership of the assets.
INNOVATIVE INDUSTRIAL PROPERTIES, GREEN THUMB EXPAND PARTNERSHIP: Innovative Industrial Properties (IIPR) announced Thursday that it entered into an amendment of the lease with Green Thumb Industries (GTBIF). The lease amendment in Danville, Pennsylvania, provided $55M in reimbursement to Green Thumb for the recently completed development of a 152,000-square-foot industrial building for cultivation and processing, in addition to a new electric substation on the property to enhance electrical load capacity. The lease amendment also adjusted the base rent under the lease to take into account the additional available funding for the development. IIP funded in full the reimbursement, making IIP’s total investment in the 300,000-square-foot property $94.6M. This lease amendment was made pursuant to the exercise of an option by Green Thumb for IIP to provide reimbursement of these improvements, with this option originally included in a lease amendment executed in 2021.
CRONOS PARTNERS WITH GEOCANN: Cronos Group (CRON) announced Monday the launch of the first of what is expected to be a range of products, in partnership with Geocann, which will utilize the VESIsorb delivery system. The company said, “This technology provides better bioavailability and faster absorption. VESIsorb formulations have set the industry benchmark in peer-reviewed published studies, delivering superior pharmacokinetic performance, including fast absorption, higher plasma concentration, and greater area under the curve.” The first VESIsorb formulated product the companies have launched together are the CBD Gel Capsules by Lord Jones.
CURALEAF, FAB 5 FREDDY EXPAND B NOBLE TO NJ: B Noble and Curaleaf Holdings (CURLF) announced Monday the expansion of its B NOBLE product partnership in New Jersey. The brand's signature 2-pack pre-rolls are now available at Curaleaf's locations in Bellmawr and Edgewater Park, as well as medical and adult-use dispensaries across the state. Founded in collaboration with Fab 5 Freddy, B NOBLE is a for-profit, cause-based cannabis brand.
CANOPY PRICE TARGETS LOWERED: MKM Partners analyst Bill Kirk lowered the firm's price target on Canopy Growth (CGC) on Wednesday to C$13 from C$17 but kept a Buy rating on the shares. The performance of the company's BioSteel business was disappointing in Q4 with C$13.5M in sales from C$17.0M in Q3, but trends should accelerate dramatically in the first half of FY23 toward a C$100M run-rate business as nationwide availability through Walmart.com is planned to come later in the calendar year, the analyst said.
Piper Sandler analyst Michael Lavery lowered the firm's price target on Canopy Growth on Thursday to $3 from $4 and kept an Underweight rating on the shares. Canopy's sales trends remain under pressure across key parts of its business, Lavery said. As consumer spending comes under greater pressure from inflation, demand for "expensive" retail items like Canopy's Storz & Bickel brand will likely soften, said the analyst.
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), Ayr Wellness (AYRWF), Aurora Cannabis (ACB), Audacious (AUSAF), BC Craft (CRFTF), Body and Mind (BMMJ), Cannara Biotech (LOVFF), Canopy Growth (CGC), RIV Capital (CNPOF), Chicago Atlantic (REFI), Columbia Care (CCHWF), Compass Pathways (CMPS), Clever Leaves (CLVR), Cresco Labs (CRLBF), CV Sciences (CVSI), CURE Pharmaceutical (CURR), Delic Holdings (DELCF), Delta 9 (DLTNF), Entourage Health (ETRGF), Fire & Flower (FFLWF), Flora Growth (FLGC), General Cannabis (CANN), Goodness Growth (GDNSF), Greenlane (GNLN), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), InterCure (INCR), Wellbeing Digital (KONEF), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm (MEDIF), MedMen (MMNFF), Neptune Wellness (NEPT), NewLake Capital (NLCP), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), RIV Capital (CNPOF), Relmada (RLMD), RYAH Group (RYAHF), Sproutly (SRUTF), Stem Holdings (STMH), Small Pharma (DMTTF), Skye Biosciences (SKYE), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Tryp Therapeutics (TRYPF), Valens (VLNS), Verano Holdings (VRNOF), Village Farms (VFF), Wesana Health (WSNAF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).
