In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back at 22nd Century's (XXII) expansion of its presence in the hemp industry, analyst views on Trulieve (TCNNF) and an approval for Aurora Cannabis (ACB) in Ireland.
22ND CENTURY INVESTS IN PANACEA: 22nd Century Group announced Tuesday the initial closing of an investment in Panacea Life Sciences, a vertically-integrated, consumer-facing company operating exclusively in the legal, hemp-derived, CBD product space. 22nd Century’s investments in Panacea over the next twelve to eighteen months are expected to total $24M, in a combination of cash and 22nd Century stock in exchange for Panacea-issued debt and preferred equity. 22nd Century has also received a warrant to purchase preferred stock of Panacea, which upon full exercise will provide 22nd Century with a controlling equity position in Panacea. “After a disciplined and thorough review of the opportunities available to 22nd Century to maximize shareholder value creation, we are pleased to announce the Company’s first investment in the legal, hemp/cannabis, consumer packaged goods space,” said CEO Cliff Fleet.”This investment is a major milestone in 22nd Century’s on-going execution of our hemp/cannabis strategic growth plan and offers the opportunity for strong projected shareholder returns.”
TRULIEVE INITIATED WITH BUY: Needham analyst Matt McGinley initiated coverage of Trulieve Cannabis on Tuesday with a Buy rating and $20 price target. The analyst cited the company's position as a multi-state operator with scaled and profitable operations in Florida while expecting its strong growth to continue into other states. McGinley added that Trulieve Cannabis offers among the lowest risk profiles relative to its peers with "highly generative" EBITDA and valuation "grounded in existing profitability." Additionally, Compass Point analyst Rommel Dionisio upgraded Trulieve to Buy from Neutral on Monday with a price target of $17, up from $11. The analyst believes that competition in the company's core Florida market is likely to decelerate in the near-term as he expects Trulieve's less profitable competitors to slow down their pace of opening cultivation facilities and dispensaries. He also pointed to the growing possibility for Florida voters to pass a referendum in next November's election to legalize the recreational sale of cannabis, naming Trulieve as the "primary beneficiary" if that were to happen.
AURORA GETS APPROVAL IN IRELAND: Aurora Cannabis announced Monday that one of the company's oil products has now been approved for use under Ireland's new Medical Cannabis Access Programme. Aurora's High CBD Oil Drops received approval from the Irish authorities and have now been added to a regulatory schedule by the Irish Minister of Health enabling importation, prescribing and supply under the scheme and is to date, one of only two products to gain such authorization.
TETRA BIO PHARMA SIGNS COMMERCIALIZATION AGREEMENT: Tetra Bio-Pharma (TBPMF) announced Monday that it has signed a definitive co-development and commercialization agreement with Alternavida for the clinical development, marketing and distribution of CAUMZ in Mexico. Under terms of the agreement, Alternavida will be a clinical research collaborator for the clinical development of CAUMZ, will fully fund two clinical trial sites in Mexico for the Serenity and fibromyalgia trials and will be responsible for registering and commercializing CAUMZ in Mexico. The clinical trial sites will be fully compliant with FDA and Health Canada requirements and are expected to be up and running in early 2020. The funding of the two sites represents a cost saving of C$10M and potentially allows Tetra to accelerate the enrollment process and ultimately the time required to complete the Phase 2 and Phase 3 trials as the Company pursues approvals in the U.S. and Canada. Additionally, Tetra will also receive a one-time license fee of C$125,000 as well as royalties on CAUMZ sales in Mexico of 10% in year one, 12.5% in year two, and 15% in years three to fifteen. Finally, Alternavida has been granted a Right of First Refusal to commercialize CAUMZ in eight additional countries including Colombia, Ecuador, Chile, Panama, Costa Rica, Honduras, Peru and the Dominican Republic.
ALEAFIA SIGNS CANNABIS SALES AGREEMENT: Aleafia Health (ALEAF) announced Monday that it has reached a definitive cannabis material purchase agreement with a Canadian licensed producer. Under the terms of the Agreement, Aleafia Health will sell 2,840 kg of dried cannabis flower at a price per gram of $2.50, generating $7.1M in revenue. The transaction will include up to three shipments, all of which will be completed before January 31, 2020. The dried flower was cultivated at Aleafia Health's Port Perry Outdoor Grow facility, which yielded 10,300 kg in 2019. The yield figure is limited to dried flower only and excludes stems or other parts of the cannabis plant.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Aphria (APHA), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), Delta 9 (VRNDF), DionyMed Brands (DYMEF), Elixinol Global (ELLXF), Greenlane (GNLN), General Cannabis (CANN), GrowGeneration (GRWG), Harborside (HSDEF), Harvest Health & Recreation (HRVSF), Hemp Inc. (HEMP), HEXO (HEXO), ICC International Cannabis (KNHBF), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), Origin House (ORHOF), Organigram (OGI), Planet 13 Holdings (PLNHF), Real Brands (RLBD), Sproutly (SRUTF), Sunniva (SNNVF), Tilray (TLRY), Vireo Health (VREOF), Wayland Group (MRRCF), Westleaf (WSLFF) and Zynerba (ZYNE).
22nd Century
-0.005 (-0.49%)
Trulieve Cannabis
+ (+0.00%)
Aurora Cannabis
+0.01 (+0.40%)
Tetra Bio Pharma
+ (+0.00%)
Aleafia Health
+ (+0.00%)
APHA
+
CV Sciences
+ (+0.00%)
CannTrust
-0.0076 (-0.98%)
Canopy Growth
+0.25 (+1.36%)
Cronos Group
+0.13 (+1.98%)
Trees Corporation
+ (+0.00%)
Tilray
+0.02 (+0.11%)
ZYNE
+
IGC Pharma
+ (+0.00%)