In this week's "Rising High," a recurring series focused on cannabis stock news, The Fly looks back at Tilray's (TLRY) downgrade, the price target cut for Hexo (HEXO), and much more. Here are some of the highlights:
MOVING TO THE SIDELINES: On Thursday, CIBC analyst John Zamparo downgraded Tilray to Neutral from Outperformer with an unchanged price target of $25. The upcoming release of Senator Schumer's cannabis federal legalization bill will likely create a positive catalyst, but "it's uncertain to lead to meaningful change this year," Zamparo told investors in a research note. Tilray shares are up 33% since the Aphria merger, and the valuation "leaves little upside from here," the analyst added.
CANOPY AGREEMENT: The Supreme Cannabis Company (SPRWF) announced that, at its special meeting of shareholders, Supreme Shareholders approved the plan of arrangement with Canopy Growth (CGC), pursuant to which, among other things, Canopy will acquire all of the issued and outstanding common shares of Supreme for consideration consisting of 0.01165872 of a Canopy common share and $0.0001 in cash in exchange for each Supreme Share held, as previously announced on April 8. Assuming timely receipt of all necessary court, third-party approvals and the satisfaction of all other conditions, closing of the arrangement is expected to occur on or about June 17.
'SELF-INFLICTED EVENT': On Tuesday, CIBC analyst John Zamparo lowered the firm's price target on Hexo to C$10 from C$13.50, while keeping an Outperformer rating on the shares. The company's fiscal third quarter results "will not inspire confidence" in its growth plans, but the sizeable miss in the quarter is largely a "short-term, self-inflicted event," Zamparo told investors in a research note. A cultivation error with suboptimal product sent to market was exacerbated by a shift in the timing of international sales, and ongoing struggles across the sector from store operating limitations, he added.
MEXICAN MARKET ENTRY: Clever Leaves (CLVR) announced it has entered into an active pharmaceutical ingredient supply agreement with CBD Life Holding, an emerging leader in the Mexican cannabis industry. Under the agreement, Clever Leaves will act as the API supplier for the development and manufacture of CBD Life's medical cannabis products. Commencing with CBD isolate, Clever Leaves aims to be the ongoing supplier of the required APIs for CBD Life's product manufacturing purposes. The partnership is Clever Leaves' first commercial agreement in the Mexican market, and it comes shortly after regulations were fully approved in the country, providing a strategic growth opportunity in one of the world's largest pharmaceutical markets.
PHARMACANN INVESTMENT: Cronos Group (CRON) and PharmaCann announced on Monday that they have entered into an agreement under which a wholly owned subsidiary of Cronos Group has purchased an option to acquire an approximately 10.5% ownership stake in PharmaCann on a fully-diluted basis. The Option exercise will be based upon various factors, including the status of U.S. federal cannabis legalization, as well as regulatory approvals, including in the states where PharmaCann operates that may be required upon exercise. Under the terms of the Transaction, total consideration paid by Cronos Group for the Option was approximately $110.4M, which was deposited by Cronos Group with a third-party paying agent to be distributed directly to PharmaCann shareholders. The Option is subject to certain anti-dilution and other adjustments. At Cronos Group's election and following its exercise of the Option, Cronos Group and PharmaCann will enter into commercial agreements that would permit each party to offer its products through either party's distribution channels. In addition, at Cronos Group's election and following its exercise of the Option, Cronos Group and PharmaCann will enter into an investor rights agreement that would provide Cronos Group with certain governance rights, such as a board seat or board observer subject to certain conditions, and a registration rights agreement that would provide Cronos Group with customary registration rights of PharmaCann common stock. The Transaction has been approved by the PharmaCann Board of Directors and the requisite PharmaCann shareholders and approved by the Cronos Group Board of Directors following the unanimous recommendation of the special committee of independent directors.
SLEEP DATA FROM ZYGEL STUDY: Zynerba Pharmaceuticals (ZYNE) has presented a poster at SLEEP 2021, the 35th Annual Meeting of the Associated Professional Sleep Societies, showing that in an open-label Phase 2 trial with patients with developmental and epileptic encephalopathies, treatment with Zygel was associated with improved sleep in children with clinically significant sleep disorders at baseline. Furthermore, the children with both DEE and autism spectrum disorder showed more wide-ranging benefits on sleep compared to those with DEE alone. In the open-label Phase 2 trial with Zygel in patients with DEEs aged 3 to less than or equal to17 years, improvements were observed in different aspects of sleep in the two groups. In patients with ASD, improvements compared to baseline were observed over the 26-week study period in sleep breathing, sleep wake transition and the total sleep disturbance scale for children. In patients without ASD, improvement was seen in initiating and maintaining sleep. Zygel was well tolerated in the trial. Most treatment-emergent adverse events were characterized as mild or moderate. Over the 26-week study period, 60.4% participants had greater than or equal to 1 related adverse event, with 93% mild/moderate severity.
OTHER STOCKS IN THE SPACE: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Aurora Cannabis (ACB), Auxly (CBWTF), Body and Mind (BMMJ), CannTrust (CTST), Canopy Rivers (CNPOF), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (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), GrowGeneration (GRWG), Hemp (HEMP), High Tide (HITIF), IM Cannabis (IMCC), 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), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Vireo Health (VREOF), WeedMD (WDDMF), Wildflower Brands (WLDFF), YSS Corp. (YSSCF), Zynerba (ZYNE), and 4Front Ventures (FFNTF).
Canopy Growth
-0.13 (-0.54%)
Supreme Cannabis
+
Trulieve Cannabis
+0.1 (+0.28%)
IGC Pharma
-0.015 (-0.95%)
Trees Corporation
+
CV Sciences
+
CannTrust
+
Aurora Cannabis
-0.07 (-0.76%)
Akerna
+0.12 (+2.78%)
ZYNE
+
Cronos Group
+0.005 (+0.06%)
Clever Leaves
-0.11 (-1.01%)
Hexo
-0.095 (-1.61%)
Tilray
-0.19 (-1.05%)