In this week's "Rising High," The Fly's recurring series focused on cannabis stock news, The Fly looks back at cannabis earnings, analyst views and a property acquisition.
CANNABIS EARNINGS: On Tuesday, Harborside (HSDEF) reported second quarter revenue of $16.15M which compares to revenue of $12.54M in the same period for last year. Net loss for Q2 was $1.7M compared to $6.1M in 2019. The company also announced it has commenced a strategic review of the business and opportunities in the marketplace including potential merger and acquisition opportunities, equity financings, and the potential repurchase and financing of the company's farm operation in Salinas, California. On Monday, 4Front Ventures (FFNTF) reported Q2 revenue of $12.7M which compared to $2.52M for the same period last year. The company also announced Wednesday it was granted final state approval for adult-use cannabis sales at its facilities in Worcester, Massachusetts. Additionally on Monday, Planet 13 (PLNHF) reported a Q2 net loss per share of 3c on a revenue of $10.76M, which compares to a loss per share of 1c and revenue of $16.52M for the same period last year. The company also said it has generated over $7M in revenue per month in July and August. Meanwhile on Friday, Auxly Cannabis (CBWTF) reported a Q2 loss per share of C$0.04 on a revenue of C$8.56M, which compares to a loss per share of C$0.02 and revenue of C$2.76M for the same period last yer.
ANALYST VIEWS: On Wednesday, Cantor Fitzgerald analyst Pablo Zuanic raised the firm's price target on Green Thumb Industries (GTBIF) to $29 from $27 and kept an Overweight rating on the shares. Deregulation "tailwinds" and "constructive" sales stats in the months ahead should continue to push up multi-state operator stocks, Zuanic said. The analyst thinks Green Thumb has the best profitability among his Overweight-rated names and "has the complexity risk of scale and deal integration." He said. sustained profitability of "30% plus" EBITDA margins, combined with franchise strength in key states, will drive EBITDA multiples over time to at least 20 times for Green Thumb. On Friday, Oppenheimer analyst Brian Nagel raised the firm's price target on GrowGeneration (GRWG) to $25 from $15 and kept an Outperform rating on the shares. Nagel said GrowGeneration represents a leading, yet still up-and-coming retail chain within the rapidly expanding and dynamic market for hydroponic and organic gardening supplies, and that current multiples underappreciate meaningfully longer-term prospects for the chain. Meanwhile on Friday, Canaccord analyst Derek Dley reiterated a Speculative Buy rating and C$45 price target on Trulieve Cannabis (TCNNF) after the company said that, following the introduction of finalized regulations from the Florida Department of Health, the company will be allowed to start manufacturing and selling THC-infused edible products in Florida. The analyst said he believes the introduction of a popular form factor in the Florida market bodes well for the company's growth prospects in the state. Trulieve announced Wednesday it began offering edible cannabis products to patients in Florida.
IIPR ACQUIRES MICHIGAN PROPERTY FOR $6.2M: Innovative Industrial Properties (IIPR) announced Tuesday that it closed on the acquisition of a property located at 29600 Stephenson Highway in Madison Heights, Michigan. The purchase price for the property was $6.2M. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with a subsidiary of Holistic Industries. In connection with the development of the property, IIP has agreed to provide reimbursement of up to $18.8M. Assuming full reimbursement for the development of the property, IIP's total investment in the property will be $25M.
MEDIPHARM SECURES SUPPLY DEALS: MediPharm Labs (MEDIF) announced Thursday its wholly owned subsidiary MediPharm Labs Inc. will supply formulated cannabis oil to Cann Farm Peru. Under the one-year renewable agreement, MediPharm Labs will provide a variety of cannabis concentrate formats, with optionality for patient ready formulated products. The products will be distributed to patients through pharmacies in Peru. Cann Farm will in turn obtain all Peruvian registrations, authorizations and approvals required for importation. MediPharm Labs anticipates delivery to begin in Q4, pending regulatory approval by applicable health authorities. Additionally on Wednesday the company announced that MediPharm Labs Inc. has completed work associated with a Research and Innovation Collaboration Agreement with Georgian College for a Data and Analytics Insights project. The company said the four-month applied research project now complete heightens its abilities in diagnostic assessment of operations, analyzing quality management data, creating efficiencies and driving performance. Meanwhile on Tuesday, MediPharm announced it will supply cannabis concentrate products in Denmark to two new medical cannabis customers under two separate white-label agreements. Under the agreements, one which has an initial two-year term and the second a one-year term, both subject to renewal, MediPharm Labs will supply a full range of specially formulated CBD and THC cannabis oil products that will be white-labeled for distribution. MediPharm Labs anticipates delivery to its customers to begin in October 2020, pending regulatory approval by applicable health authorities.
U.S. HOUSE TO VOTE ON "MORE" ACT: The U.S. House of Representatives intends to vote in September on legislation to remove cannabis from the Controlled Substances Act as well as erase some marijuana criminal records, The Hill's Tal Axelrod reported on Friday. The bill would not legalize cannabis, which would be left up to the states, but the vote will be a major step in the effort to reduce legal penalties related to the substance, Axelrod says. House Majority Whip James Clyburn said in an email to members that the vote will occur during the September work period, Axelrod notes. According to the email, the measure will be known as the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act. Following media reports that House Democratic leadership is preparing for a September vote on the MORE Act, Roth Capital analyst Scott Fortune said while he welcomes the continued push toward a more liberal cannabis policy, he does not believe the MORE Act will pass in 2020. Nonetheless, Fortune believes it sets up positively for 2021 if the Democrats win the Senate this November and accelerates cannabis policy reform in Congress. Near-term news around federal legalization should drive positive sentiment in the cannabis space, but he expects full legalization could be a slow process in the current status quo with robust legal state-regulated markets and no federal interference benefits established U.S. operators.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Akerna (KERN), Aleafia (ALEAF), Aphria (APHA), Aurora Cannabis (ACB), Biome Grow (BIOIF), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON}, CV Sciences (CVSI), Delta 9 (VRNDF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), HEXO (HEXO), Hemp Inc. (HEMP), India Globalization Capital (IGC), Indiva (NDVAF), Indus Holdings (INDXF), Khiron Life Sciences (KHRNF), Liberty Health Sciences (LHSIF), MedMen (MMNFF), MJardin (MJARF), Neptune Wellness (NEPT), Omnicanna (ENDO), Organigram (OGI), Sproutly (SRUTF), Sunniva (SNNVF), Supreme Cannabis (SPRWF), Valens (VLNCF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Vireo Health (VREOF), Wayland Group (MRRCF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF) and Zynerba (ZYNE).
Harborside
+ (+0.00%)
4Front Ventures
+ (+0.00%)
Planet 13 Holdings
+ (+0.00%)
Auxly Cannabis
+ (+0.00%)
Green Thumb Industries
+ (+0.00%)
GrowGeneration
-1.1 (-7.02%)
Trulieve Cannabis
+ (+0.00%)
Innovative Industrial Properties
-1.87 (-1.49%)
Medipharm Labs
+ (+0.00%)
APHA
+
Aurora Cannabis
-0.01 (-0.11%)
CV Sciences
+ (+0.00%)
CannTrust
+ (+0.00%)
Canopy Growth
+0.02 (+0.12%)
Cronos Group
-0.02 (-0.37%)
Trees Corporation
+ (+0.00%)
IGC Pharma
+0.275 (+25.35%)
Tilray
-0.02 (-0.31%)
ZYNE
+