Canopy Growth, Neptune Wellness, Aurora Cannabis, Organigram, and Clever Leaves all released financial reports this week
Welcome back to our weekly series, Schaeffer's Cannabis Stock News Update, where we recap what happened in the world of marijuana stocks, and look at how the cannabis industry is evolving as we make our way through 2022.
The world of cannabis saw massive growth in 2021 and 18 states plus D.C. officially legalized the adult-use of cannabis by the end of the year. Thirty-one states plus D.C. had taken decriminalization measures regarding cannabis by the end of 2021. As of late 2021, marijuana is classified at the U.S. federal level as a Schedule I substance under the Controlled Substances Act. In other words, cultivating, distributing, and possessing cannabis remains illegal at the federal level.
In addition, here is a quick summary of the major (and action-worthy!) cannabis stock news from this week:
*NEW CANNABIS STOCK ALERT* Leafly Holdings Inc. (NASDAQ:LFLY) went live on the Nasdaq stock market on Monday, February 7. As part of the merger with Merida Capital Holdings, Leafly went live via a special acquisition company sponsored by Merida. According to LFLY, “Backed by substantial funding, tremendous advancements in cannabis legalization and e-commerce tailwinds, we are relentlessly focused on investing in our technology, talent, and content to execute our growth strategy and create value for all stakeholders."
*NEW CANNABIS STOCK ALERT* CEA Industries Inc. (NASDAQ:CEAD) went live on the Nasdaq stock market on Friday, February 11. The combined public offering price was $4.13 with the expectation of generating $24 million in gross proceeds. The controlled environment agriculture (CEA) systems provider's initial public offering is expected to close on February 15.
cbdMD, Inc. (NASDAQ:YCBD) made an announcement on Monday morning that the CBD brand had earned the designation of NSF Certified for Sport for four of the company's flagship products. According to YCBD, "We are beyond proud to be the first CBD company to achieve this designation. This prestigious honor further solidifies our stand as a leader and innovator within the industry, constantly striving to create real regulation and industry standards."
Canopy Growth Corp (NASDAQ:CGC) was the major cannabis headline of the week, reporting fiscal third-quarter earnings on Wednesday morning including a drop in year-over-year quarterly revenue down to $122 million and a quarterly earnings increase that still remained in negative territory. According to Canopy Growth, "In the third quarter we actioned to win where it matters - driving record performance in our CPG business from both BioSteel and Storz & Bickel, while beginning to stabilize our Canadian business including maintaining the #1 position in premium flower. Our continued discipline and focus are expected to fortify Canopy's competitive positioning in Canada as we ambitiously build our U.S. CPG, CBD, and THC strategies."
Just ahead of Super Bowl 56, WM Technology, Inc. (NASDAQ:MAPS) and Weedmaps will release a digital commercial spot. This comes as a result of not being able to buy an actual Super Bowl advertisement due to NBC network regulation which refuses the advertisement of “cannabis or cannabis-related businesses." Tune in on Sunday night to watch Brock Ollie in his 30-second ad spot that highlights the overarching obstacles imposed on the cannabis industry, especially restrictions related to the Big Game. According to Weedmaps CEO, “There’s an irony in the fact that the biggest night for advertising will feature an array of consumer brands in regulated industries, from beverage alcohol to sports betting, yet legal cannabis retailers, brands and businesses have been boxed out.”
Tilray Brands, Inc. (NASDAQ:TLRY) launched Tilray Medical to consolidate its medical marijuana brands into one platform. This platform will allow Canadian patients to access Tilray, Aphria, Broken Coast, and Symbios products. According to TLRY, "By unifying the global medical divisions of Tilray and Aphria under a cohesive strategy and mission, Tilray Medical emerges as the premier global supplier of a portfolio of high-quality, effective medical cannabis brands and products for patients in need around the world.”
Later in the week, TLRY subsidiary SweetWater Brewing Company, LLC announced its expansion in California via distribution partners. Now standing as the United States' 11th largest craft brewer, SweetWater beverages will now be available throughout the state of California. Then, even later in the week, TLRY subsidiary Breckenridge Distillery announced the second ever release of its limited-edition whiskey, 'Super' Sexy Motor Oil, just in time for the Valentine's Day holiday.
Canndoc, also known as InterCure Ltd. (NASDAQ:INCR), released preliminary financial results for Q4 of 2021 this week. Quarterly highlights include a greater-than-200% increase in revenue quarter-over-quarter and a landmark of its eighth consecutive quarter of double-digit growth. Additionally, INCR expects approximately a 250% increase year-over-year in revenue for 2021 compared to 2020.
IM Cannabis Corp. (NASDAQ:IMCC) signed an agreement with MZ Group, an investor relations firm, to lead IM Cannabis' investor relations and financial communications to enhance IMCC's exposure in the investing community.
Sundial Growers Inc. (NASDAQ:SNDL), previously flagged for not being in compliance with Nasdaq's minimum bid price requirement last August, received a 180-day extension to regain compliance. By August 8, SNDL shares will need to have a bid price at or above $1.00 per share for at least 10 consecutive trading days in order to regain compliance. Sundial Growers has indicated that it will implement all potential options to regain compliance including a potential reverse stock split.
Fourth quarter and full year of 2021 earnings were released by Clever Leaves Holdings Inc. (NASDAQ:CLVR) this week. Fourth quarter revenue is estimated to have increased 25% quarter-over-quarter to $4.2 million. Additionally, full year of 2021 revenue is estimated to have increased 27% year-over-year to $15.4 million. Annual net losses, however, also increased from $25.9 million in 2020 to over $38 million in 2021. According to CLVR, “We generated strong revenue growth year-over-year and maintained our prudent approach to cost management, which allowed us to drive continued margin benefits for the full year."
Hexo Corp (NASDAQ:HEXO) announced layoffs of 180 employees to save $15 million annually as part of HEXO's previously announced cost-cutting plan. According to HEXO on Thursday, “Today’s announcement was not an easy one to make. We are working with all impacted employees to the best of our ability to ensure that they are treated fairly and provided the support necessary to assist with this transition. I would like to thank all impacted employees for their contributions and dedication to HEXO.” This comes just one week after HEXO was put on notice about non-compliance by Nasdaq.
High Tide Inc. (NASDAQ:HITI) announced the acquisition of Bud Room Inc. on Thursday. The cannabis retailer acquired 100% of Bud Room.
Neptune Wellness Solutions Inc. (NASDAQ:NEPT) released its fourth quarter financials this week. Quarterly revenue was up 17% quarter-over-quarter and up 458% year-over-year. Additionally, gross profit finally made it into positive territory after a gross loss of $10 million in 2020. According to NEPT, "We delivered our fourth consecutive quarter of sequential revenue growth and reached positive gross margins, driven by acceleration of our cannabis sales and supply chain improvements for Sprout Foods. We also took measures to improve our overall operating efficiencies and reduce corporate overhead, as outlined in our Strategic Review. As we look ahead, we will continue to focus on controlling our costs while executing on our high-growth opportunities within our food & beverage, cannabis, and personal care & beauty brands."
The first full production and shipment of cannabis-infused beverages was completed by The Valens Company Inc. (NASDAQ:VLNS) from its newest Toronto facility. Additionally, VLNS announced a completed beverage manufacturing agreement aimed at producing customized cannabis-infused beverages for the Canadian market. Finally, The Valens Company also announced the launch six new cannabis-infused beverage products available in Canada.
Schweitzer-Mauduit International, Inc. (NYSE:SWM) made a splash by announcing its dive into the cannabis sector through the launch of Botani, a company utilizing hemp and botanical solutions to produce hemp wraps, fillers, and rolling/pre-roll papers. The 400-year old company brings a brand new level of experience to the cannabis accessory production industry.
A lot of smoke surrounded Aurora Cannabis (NASDAQ:ACB) this week in an effort to redirect focus from the cannabis company's lackluster fiscal second-quarter financial report. ACB reported over $75 million in losses in the second quarter while senior leadership continued to point to a strong overall balance sheet. According to Aurora Cannabis, though, "Where there is money to be made in a federally-regulated structure, Aurora will be there and we will win.”
Innovative Industrial Properties, Inc. (NYSE:IIPR) acquired a New Jersey property for $35.4 million and leased it to a subsidiary of Ascend Wellness Holdings, Inc. to build a 114,000 square foot regulated cannabis cultivation and processing facility.
Finally, to round out the week, Organigram Holdings Inc. (NASDAQ:OGI) released financial results, including the highest-ever quarterly net revenue reported. Fiscal second-quarter net revenue increased 57% year-over-year to $30.4 million. According to OGI, “Our record-breaking results in the first quarter of fiscal 2022 are a testament to our successful strategy to create innovative, high-quality products that align with the evolving preferences of the various segments of cannabis consumers."