In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back at a subsidiary closing, trial results and a regulatory approval.
TILRAY TO CLOSE HIGH PARK GARDENS: Tilray (TLRY) announced Tuesday its wholly-owned subsidiary High Park Gardens will close its doors over the course of the next six weeks. As a result of the closure, the company expects to realize annualized net savings of approximately $7.5M and avoid significant ongoing capital expenditures. Additionally on Wednesday, Tilray announced its wholly-owned subsidiary Tilray Portugal, has received a good manufacturing practice certification in accordance with European Union standards for its manufacturing facility in Cantanhede, Portugal. The certification allows the facility to manufacture medical cannabis extracts in-house and export GMP-produced finished medical cannabis products from Portugal throughout European Union and other international markets with legal medical cannabis regulations. Following the announcements, Roth Capital analyst Scott Fortune maintained a Neutral rating and $7 price target. Fortune said he feels the move is a positive, as it will lower operational costs and return the company to an asset-light model.
ZYNERBA REPORTS BRIGHT TRIAL RESULTS: Zynerba Pharmaceuticals (ZYNE) announced Wednesday top line results from the exploratory, open label Phase 2 BRIGHT trial. The trial was designed to assess the safety, tolerability and efficacy of Zygel in pediatric and adolescent patients with autism spectrum disorder. Zygel was administered to patients with moderate-to-severe symptoms of ASD as add-on therapy to their standard of care utilizing a variety of efficacy assessments. Key findings from the trial disclosed include: All five subscales of the Aberrant Behavior Checklist - Community as well as the Parent Rated Anxiety Scale - Autism Spectrum Disorder showed both statistically significant and clinically meaningful improvements at 14 weeks of treatment from baseline; The results observed in other efficacy outcome measures, including Clinical Global Impressions - Improvement scale, support the subscale results observed in the ABC-C; Zygel was well tolerated in this trial with no serious or severe adverse events reported. Following the results, Roth Capital analyst Scott Henry raised the firm's price target on Zynerba to $11 from $10.50 and kept a Buy rating on the shares. The analyst said the data was "robust" across multiple subscales, and "strong" in the ABC-C irritability subscale. Henry increased Zynerba's probability of approval for the autism spectrum disorder indication to 35% from 25%. Additionally on Thursday, Cantor Fitzgerald analyst Charles Duncan raised the firm's price target on Zynerba to $24 from $21 and kept an Overweight rating on the shares. Duncan said the price target change reflects enhanced conviction in the ASD program and now incorporates a $100M placeholder for this indication.
GENERAL CANNABIS RECEIVES REGULATORY APPROVAL: General Cannabis (CANN) announced Thursday that the State of Colorado's Marijuana Enforcement Division has granted it regulatory approval to complete the acquisition of Cannasseur, subject to approval by local regulators. Cannasseur is a vertically integrated Colorado licensee with a recreational dispensary, an oil extraction facility, and a 12,000 square foot light deprivation greenhouse cultivation facility in Pueblo West, Colorado. The acquisition, upon completion, would increase General Cannabis' revenue, EBITDA and cash flow.
CANOPY RIVERS REDUCES CASH OUTFLOWS: Canopy Rivers (CNPOF) announced Thursday a series of operational changes designed to optimize its organizational structure, streamline operations, and preserve and maximize cash-on-hand. As part of its strategic and operational review of the business, the company announced the following a material reduction in the company's operating cash outflows, including a reduction in headcount, directors' compensation, marketing expenses, and general corporate expenses of a minimum of 35% from the company's fiscal 2020 operating cash outflows on a normalized basis; A focus on generating positive cash flow from operations for fiscal 2021; and a focus on maximizing returns on existing assets. The company also reaffirms its intention, under its previously announced normal course issuer bid to repurchase subordinated voting shares in accordance with its NCIB. Pursuant to the previously announced NCIB, the company is permitted to repurchase up to 10% of the subordinated voting shares in the public float.
TASK FORCE RECOMMENDS WAIVER SYSTEM FOR STATES: The Council on Criminal Justice shared a report on criminal justice policy changes on Wednesday and said in a tweet that, "Our task force report is the culmination of hard work by the 14-member task force, composed of key leaders in the criminal justice field. Many thanks to Task Force Chair and former Georgia Governor @NathanDeal for his leadership in this effort." Among the task force's recommendations is the creation of a waiver system to allow states to set their own marijuana policies without federal interference. "In the absence of cannabis rescheduling, or its legalization at the federal level, the Task Force recommends that Congress and the Administration develop a state waiver process or contractual framework. Without it, states and the industry will continue to exist under an illusion of sovereignty where circumstances can change at any moment. A balanced and thoughtful accommodation from the federal government would provide confidence to states, stabilize the market, and help address many of the myriad safety and health problems," the report reads.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Akerna (KERN), Aleafia (ALEAF), Aphria (APHA), Aurora Cannabis (ACB,) Auxly Cannabis Group (CBWTF), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), Delta 9 (VRNDF), DionyMed Brands (DYMEF), Elixinol Global (ELLXF), FluroTech (FLURF), Green Thumb Industries (GTBIF), Greenlane (GNLN), GrowGeneration (GRWG), Harborside (HSDEF), Hemp Inc. (HEMP), HEXO (HEXO), India Globalization Capital (IGC), Indiva (NDVAF), Innovative Industrial Properties (IIPR), ICC International Cannabis (WLDCF), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MediPharm Labs (MEDIF), MedMen (MMNFF), Mjardin (MJARF), Neptune Wellness Solutions (NEPT), Organigram (OGI), Origin House (ORHOF), Planet 13 (PLNHF), Real Brands (RLBD), Sproutly (SRUTF), Sunniva (SNNVF), Supreme Cannabis (SPRWF), Tetra Bio-Pharma (TBPMF), Trulieve (TCNNF), Valens (VLNCF), Vireo Health (VREOF), Wayland Group (MRRCF), WeedMD (WDDMF), Westleaf (WSLFF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF) and 4Front Ventures (FFNTF).
Tilray
+0.36 (+3.38%)
ZYNE
+
Trees Corporation
+ (+0.00%)
RIV Capital
+ (+0.00%)
APHA
+
Aurora Cannabis
+0.49 (+3.21%)
CV Sciences
+ (+0.00%)
CannTrust
+ (+0.00%)
Canopy Growth
+0.92 (+4.63%)
Cronos Group
+0.12 (+1.79%)
IGC Pharma
-0.0131 (-2.20%)
Trulieve Cannabis
+ (+0.00%)