In this week's "Rising High," The Fly's recurring series focused on cannabis and psychedelic stock news, The Fly looks back on acquisitions, a sale and an analyst initiation.
HEMPFUSION TO ACQUIRE SAGELY NATURALS FOR $25M: HempFusion Wellness (CBDHF) announced Tuesday it has entered into a definitive agreement to acquire 100% interest in Sagely Enterprises, a company focused on premium CBD products with mass distribution in more than 14,000 retailers nationwide. The company said, “Founded in 2015 by Kerrigan Behrens and Kaley Nichol, Sagely Naturals is the largest female-founded CBD wellness brand. Since its inception, the brand has been on a mission to naturally modernize the medicine cabinet with high-quality, accessible products that help women feel their best. Sagely Naturals maintains a strong presence in the top Drug retailers nationwide and is sold in key retailers such as CVS, Rite Aid, Albertsons, Sprouts, Nordstrom, and many other independent regional grocers and natural food stores in addition to sagelynaturals.com. The company’s products are available in over 14,000 retail locations.” Pursuant to an agreement and plan of merger dated May 24, 2021 among HempFusion, HempFusion Merger Sub 2, Sagely Naturals and KBKN Equityholder Representative. HF Merge Co will merge into Sagely Naturals with Sagely Naturals surviving as a wholly-owned subsidiary of HempFusion, for initial consideration of $25M consisting of $2M and $23M in common shares of the Company. In addition, the Sellers may be entitled to receive an earnout payment of up to $5M subject to Sagely Naturals achieving certain revenue targets within twelve months of closing of the Transaction, with 40% of any Earnout payment to be paid in HempFusion Shares and the balance paid in cash. Upon completion of the Transaction, Sagely Naturals will be a wholly-owned subsidiary of HempFusion, with Kerrigan Behrens and Kaley Nichol remaining as Co-CEOs of Sagely Naturals.
GROWGENERATION ACQUIRES THE HARVEST COMPANY: GrowGeneration (GRWG) announced Tuesday its acquisition of The Harvest Company, a northern California-based hydroponic supply center and cultivation design innovator with stores in Redding and Trinity County. Founded by Robert Masterson, Harvest Company has provided Northern California growers with specialty hydroponic supplies and professional horticultural consultation services since 2014. The Harvest Company's team of 16 employees will join GrowGen's team of over 600 grow professionals as part of the transaction, while Masterson will stay on in an advisory role.
AUXLY TO SELL KGK TO MYCONIC: Auxly Cannabis Group (CBWTF) announced Thursday that it has entered into a definitive agreement with Myconic Capital Corp., pursuant to which Myconic will acquire all of the issued and outstanding shares of KGK Science for up to C$16.5M in value comprised of: C$12.5M purchase price from Myconic in the form of: C$1.5M in cash payable on the closing date of the Transaction; C$1M in cash payable six months after the closing date of the Transaction; and C$10M in common shares in the capital of Myconic at a price per Myconic Share of C$1.55 all to be issued on the closing date of the Transaction, with equal tranches becoming freely tradeable on the four, six, nine and 12 month anniversaries of the closing date of the Transaction; C$1.5M milestone payment, payable in cash or Myconic Shares, at the option of Myconic, if KGK achieves gross revenues of C$8M in any 12-month period during the two years following the closing date of the Transaction; and C$2.5M credit against future KGK services, reflected in a 10-year service agreement between Auxly and KGK. The Transaction is expected to close on or around the week of June 7, 2021 and is subject to customary closing conditions and regulatory approvals, including the approval of the NEO Exchange. With the sale of KGK, Auxly gains additional liquidity to support the Company's ongoing commercial operations as it continues to expand its product offering in Canada and execute on its business strategy.
AURORA LAUNCHES SCIENCE & INNOVATION GROUP: Aurora Cannabis (ACB) announced Thursday the launch of a dedicated Science & Innovation business group, with the aim of commercializing patented and patent pending technology that the company believes will be key in the development of cannabinoid biosynthesis and plant genetics. Through licensing agreements, Aurora and sub-licensee 22nd Century Group (XXII) together share the global IP rights to commercialize key aspects of cannabinoid biosynthesis in plants and microorganisms. The two companies are working closely to enforce their IP against infringing parties, as well as to actively explore commercial development opportunities. "As global cannabis regulations evolve, we believe cannabinoid molecules, including minor cannabinoids, will be incredibly important. Aurora's Reliva business in the U.S. sells products that use CBD isolate, and we are deeply interested in the evolution of other cannabinoids and the ability to commercialize them," said CEO Miguel Martin. "This technology promises to be very valuable, as it potentially unlocks a more efficient means to produce cannabinoids at scale, particularly minor cannabinoids which typically occur in the plant at very low levels, less than 1%. We've created a separate Science & Innovation business to capitalize on the tremendous potential we see in this emerging space."
COMPASS PATHWAYS INITIATED WITH BUY: BTIG analyst Robert Hazlett initiated coverage of Compass Pathways (CMPS) on Thursday with a Buy rating and $63 price target. Compass Pathways is "pioneering" the development of a new model of delivering its novel version of psilocybin, a psychedelic found in certain mushrooms, where the molecule is administered in conjunction with psychological support to improve patient outcomes, Hazlett said. Lead program COMP360 psilocybin is a novel formulation that is a patent-protected, high-purity polymorphic crystalline form being developed initially for treatment-resistant depression, the analyst noted.
OTHER CANNABIS STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Body and Mind (BMMJ), CannTrust (CTST), Canopy Growth (CGC), Canopy Rivers (CNPOF), Clever Leaves (CLVR), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos Group (CRON), CV Sciences (CVSI), CURE Pharmaceutical (CURR), Delta 9 (VRNDF), Emerald Health (EMHTF), Fire & Flower (FFLWF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb Industries (GTBIF), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITIF), IM Cannabis (IMC), India Globalization Capital (IGC), Indiva (NDVAF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Omnicanna (ENDO), Organigram (OGI), Planet 13 (PLNHF), Skye Biosciences (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Sunniva (SNNVF), Supreme Cannabis (SPRWF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Vireo Health (VREOF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE) and 4Front Ventures (FFNTF).
ZYNE
+
Trulieve Cannabis
+0.0789 (+0.21%)
Tilray
-0.24 (-1.44%)
IGC Pharma
-0.005 (-0.37%)
Trees Corporation
+
Cronos Group
-0.09 (-1.16%)
Canopy Growth
+0.195 (+0.80%)
CannTrust
+
CV Sciences
+
Compass Pathways
-0.54 (-1.58%)
22nd Century
+0.16 (+3.34%)
Aurora Cannabis
+0.155 (+1.82%)
Auxly Cannabis
+
GrowGeneration
-1.03 (-2.42%)
HempFusion Wellness
+