It was a tough week for cannabis, but a very good week for psychedelics and hemp. Four major cities took significant steps toward the decriminalization of psilocybin mushrooms and other psychedelic plants. Meanwhile, the United States Department of Agriculture released interim regulations for the production of hemp, opening a channel for the public to weigh in on them.
On the other hand, we saw a series of bad news coming out of major cannabis companies.
MedMen Enterprises Inc. (CSE: MMEN) (OTC: MMNFF) tumbled on a substantial growth in its net losses, which came in at $82.9 million for the fourth quarter, more than double the loss reported in the same period last year. Full-year revenue of $130 million, up by 227% year-over-year, hit a new record.
Hexo Corp. (TSX: HEXO) (NYSE: HEXO) also posted poor fourth-quarter results, with an adjusted net loss of CA$43.73 million ($33.5 million), which the company said was driven by “the significant scale of operations and increased stock-based compensation expense due to higher cannabis market value, increased R&D expenditures and an impairment loss on inventory.”
DionyMed Brands Inc (OTC: DYMEF) failed to restructure its debt or find a strategic buyer to acquire its assets, going into receivership. The company is in default of $24.81 million plus any additional interest, fees and expenses.
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“It was a rough week for cannabis companies like MedMen, DionyMed and Hexo Corp,” Debra Borachardt, CEO of Green Market Report said. “MedMen lost control of its board, DionyMed is going bankrupt and HEXO has stumbled badly on projected revenues. It’s the cannabis industry version of The Real World.
“Companies are being forced to reckon with unrealistic and expensive business strategies and get real with the actual money coming in and what can be spent. Investors have shown their displeasure with pie in the sky plans and want real results now.”
In some positive news, 1906 closed an $18–million funding round led by Navy Capital; Michigan’s Marijuana Regulatory Agency started accepting adult-use marijuana business applications and Liberty Health Sciences Inc. (CSE: LHS) (OTC: LHSIF) rallied after reporting consolidated second-quarter net sales of CA$10.63 million ($8.1 million) versus CA$2.22 million one year ago.
Data out of cannabisMD showed CBD is currently more popular (as measured by search volumes) than Jesus, Kanye West, The NBA, Taylor Swift, The Beatles, Alexandria Ocasio-Cortez and several other hot topics right now. Only PornHub and Halloween beat CBD’s popularity this week.
Cannabis ETFs delivered decent gains. Over the last five trading days:
• The Horizons Marijuana Life Sciences Index ETF (OTC: HMLSF) (TSE:HMMJ) rose 5.06%
• The ETFMG Alternative Harvest ETF (NYSE: MJ) gained 4.44%
• The AdvisorShares Pure Cannabis ETF (NYSE: YOLO) was up 1.88%
• The Cannabis ETF (NYSE: THCX) advanced 3.08%
• The Amplify Seymour Cannabis ETF (NYSE: CNBS) rose by 2.77%
• The SPDR S&P 500 ETF Trust (NYSE: SPY) closed the period up 1.22%
More News From The Week
International Cannabrands Inc. (CSE: JUJU) requested a change of its ticker symbol on the Canadian Securities Exchange from JUJU to INCB. The effective date is expected to be Nov. 4. As announced Sept. 26, the company has discontinued its JuJu Royal brand.
“The change of symbol makes sense in the context of this business decision, as well as providing a more consistent recognition of the company as a whole, among public investors and stakeholders,” a spokesperson told Benzinga.
Aphria Inc. (NYSE: APHA) implemented Rootstock Software Cloud ERP solution.
Cannabis company Harborside Inc. (CSE: HBOR) appointed Peter Bilodeau, the company’s chairman of the Board of Directors, as interim CEO replacing Andrew Berman. Additionally, the company announced Greg Sutton’s promotion to the company’s Chief Operating Officer of Cultivation and Manufacturing, and the addition of Lisah Poore as Chief Retail Officer. Mireille Duclos was placed to lead the company’s HR department.
The Yield Growth Corp. (CSE: BOSS) (OTC: BOSQF) posted record third-quarter revenue of $1.9 million, up 61% from $1.2 million in the previous quarter. The company’s revenue rose 355% year-over-year. Net loss fell by 55% from $4.1 million in the second quarter to $1.9 million in the third.
Another woman reached the C-suite in a publicly traded cannabis company after cannabis journalist Sara Brittany Somerset was appointed as Driven Deliveries Inc (OTC: DRVD) Chief Communications Officer.
Colombian startup One World Pharma (OTC: OWPC) announced the planned launch of a commodity-based ‘Cannabis Futures’ program. Designed to service CPG manufacturers, the new program takes a Starbucks approach to sourcing ingredients.
“We grow the ingredients so manufacturers don’t have to,” Brian Moore, President of One World Pharma said. “As legalization matures and the big CPG players get into the game, the rules will change. We’re preparing for that future today.”
Materia Ventures launched its platform and leadership team, including Deepak Anand and Nick Pateras.
“I have been fortunate to have assembled a team of talented and experienced professionals that share a common vision of enabling medical cannabis access across Europe,” Anand told Benzinga.
According to a report released by RYAH Medtech, a big data and technology company focused on valuable predictive analysis in the global medical plant intake industry, women make up a large segment of the medical cannabis market—approximately 45% of the patient population.
RYAH surveyed over 28,000 women over the past 20 months on their use of medical cannabis and found that the average female patient prefers strains that are high in CBD and THC to treat many of the same ailments treated by men, including mental health issues and pain relief. The surveyed women’s top three medical concerns were anxiety, depression, and stress and they preferred Indica and Sativa strains equally across the range of condition treated.
RYAH’s data also confirmed that women are more likely than men to use cannabis for the specific treatment of fibromyalgia, nausea, anorexia, irritable bowel syndrome and migraines.
Aeon Botanika announced that it will be opening in Spring 2020 in West Hollywood. Founded by Nicole Fox, MPH, RD, Aeon Botanika will seek to become a first-of-its-kind wellness destination featuring a Cannabis Boutique, Moroccan Cannabis Lounge, Plant-Forward Cafe and Wellness Center.
“I believe that cannabis legalization is a massive catalyst for change, offering powerful benefits for individual health and well-being in addition to an opportunity to foster broader social change and healing. At Aeon Botanika we want to build an ecosystem around cannabis and wellness, in a beautiful, inspiring environment,” Nicole Fox told Benzinga.
California omnichannel operator ManifestSeven (formerly MJIC) released a comprehensive report on investor confidence, finding 79% of Canadians and 74% of Americans still see the industry as appealing.
Cannabis 2.0: The Future of Investing in the Industry – conducted by FTI Consulting – spoke with 660 retail investors with at least $250,000 in investable assets. 90% of Americans and 82% of Canadians who are currently invested in cannabis believe they’re “completely on track” to achieve their financial goals despite the recent slump in markets.
“What’s really striking is just how confident investors remain despite recent headwinds,” said Sturges Karban, chief executive officer of ManifestSeven. “We’ve come through the first wide-ranging industry shakeout, and as companies such as ours prepare to go public, we are seeing investors acknowledge the importance of allowing compliant operators to mature, and lead the next phase of industry…