This week, Wells Fargo analyst Chris Carey initiated coverage of four cannabis stocks, helping to rekindle interest in the space on Wall Street ahead of a possible year-end run.
The research analyst targeted a handful of stocks including Scotts Miracle-Gro Co (NYSE:SMG) and Canopy Growth Corp. (Nasdaq:CGC) in his analysis.
This comes as federal lawmakers propose legalization bills and the sector struggles to recover from a market pullback that could ultimately provide investors with an interesting opportunity.
At this point, 19 states (including Washington, D.C.) have legalized recreational adult use of marijuana, and a voter-approved measure in South Dakota is now undergoing a court challenge, which could add to that tally.
There are many signals lining up that a Federal shift opening the door to more legalization could be in the offing. Given Wall Street’s rekindled interest in the space, this could be a key moment of synergy for investors looking to establish exposure to a generational investment theme.
With that in mind, we take a look below at some of the most interesting stories in the space.
OrganiGram Holdings Inc. (Nasdaq:OGI) engages in the production and sale of medical marijuana. It focuses on producing cannabis for patients and adult recreational consumers.
The firm’s brands include Adult Recreational and Medical.
OrganiGram Holdings Inc. (Nasdaq:OGI) recently announced results for the fourth quarter ended August 31, 2021, including a 7% share of market in the recreational cannabis market in Q4, up from 5.4% in Q3 2021, positioning Organigram as the #4 licensed producer and the momentum continues with a 7.9% share of market as of October, 24% growth in gross revenue to $36.2 million in Q4 2021 from Q3 2021 and 43% from the same prior-year period, and 22% growth in net revenue to $24.9 million in Q4 2021 from Q3 2021 and 22% from the same prior-year period.
“The results in Q4 Fiscal 2021 demonstrate the momentum we have achieved from our efforts to lead innovation and increase efficiencies. In the quarter, we introduced exciting new products that were embraced by consumers and we achieved higher crop yields at a lower cost” said Beena Goldenberg, Chief Executive Officer. “We are particularly pleased with our market share gains in the quarter to become a #4 LP and will build on these successes into Fiscal 2022.”
Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -19%.
OrganiGram Holdings Inc. (Nasdaq:OGI) managed to rope in revenues totaling $20.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 12.8%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($196.4M against $19.4M).
Sugarmade Inc. (OTC US:SGMD) currently operates one Nug Avenue hub located in the Los Angeles metropolitan area. This initial location has grown dramatically since its inception in March 2021. By the end of June 2021, it had more than 10,000 unique members. That pace of growth has accelerated over recent months and the Company now has nearly 25,000 unique members.
Jimmy Chan, Sugarmade CEO, stated, “We have seen rapid and accelerating organic growth in customers at our initial Nug Avenue location since we opened the doors in March. The good news is that this trend survived reopening, with a reduction in pandemic-related measures and regulations having no impact on our growth. That provides a very healthy backdrop as we look ahead to opening new locations, upgrading our service, and verticalizing our model through our own cultivation resources.”
Sugarmade Inc. (OTC US:SGMD) is now awaiting specific instructions about undergoing mandatory inspections and steps related to planning and approvals before it can move forward and officially open its second location. In addition, management is currently in the process of evaluating additional properties for further expansion, including outside of the Los Angeles marketplace.
The Company has also implemented new cannabis delivery technology to establish a competitive advantage in its core delivery zone: the Onfleet last mile delivery solution with Blaze. Onfleet provides AI-based automated dispatch, automatic SMS customer notifications with accurate ETAs, real-time driver tracking, proof-of-delivery, feedback collection tools, and powerful analytics to ensure every delivery is an optimal experience. In the first month of adoption, Nug Avenue’s average delivery time reduced to 41.51 minutes, and customer satisfaction rose to 4.83 out of 5 stars on average.
“The industry average is measured in hours when it comes to cannabis orders in the California delivery marketplace,” Chan continued. “We are working to shorten that window and gain an edge to drive market share gains. This technology provides everything from route optimization to real-time delivery updates, saving us time and money while producing higher customer satisfaction in the process.”
Sugarmade Inc. (OTC US:SGMD) continues to move toward its first planting at the large 640-acre outdoor cultivation site associated with its recently acquired Lemon Glow subsidiary. Lake County officials are reviewing materials related to the property at present. And the Company believes all necessary approvals will be in place in time for the 2022 planting season.
Tilray Inc. (Nasdaq:TLRY) is a global cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America. The firm is focused on medical cannabis research, cultivation, processing, and distribution of cannabis products worldwide. Its products include dried cannabis and cannabis extracts. It operates through the following segments: Cannabis and Hemp.
The Cannabis segment consists of adult-use, medical and bulk sales of cannabis under regulated licenses and sold to retail, wholesale, pharmacy, government, and direct to patient. The Hemp segment consist of hemp seed, hemp foods, board spectrum hemp extract containing CBD, which are sold in an unlicensed operation and sold to retail, wholesale and direct to consumers.
Tilray Inc. (Nasdaq:TLRY) recently announced that its medical subsidiary, Aphria, has launched medical cannabis oral strips in THC and CBD-rich varieties. Powered by QuickStrip’s™ proprietary technology, each Aphria medical strip contains a thin, edible film that contains rapidly dissolving, micronized cannabinoids that absorb directly into the bloodstream, providing patients with a fast-acting, convenient, and precise dosing experience for relief from a range of conditions.
Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, said, “Tilray’s medical brands, Aphria, Symbios, and Tilray, are relentlessly committed to investing in patient wellness through a portfolio of new innovative product offerings, GMP-certified cultivation, and the earned trust of the medical community. The launch of the Aphria-branded medical strips is a compelling proof point in this regard, and, given the growing expansion of medical cannabis across the globe, we believe we are exceptionally well-positioned in this high-growth, high-margin market moving forward. We look forward to extending our leadership in medical cannabis and to delivering value for patients and shareholders alike.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action TLRY shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -7% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -24%.
Tilray Inc. (Nasdaq:TLRY) managed to rope in revenues totaling $168M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 222.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($376.3M against $526.8M, respectively).
Other key players in the cannabis space include Sundial Growers Inc. (Nasdaq:SNDL), Aurora Cannabis Inc. (Nasdaq:ACB), and Cronos Group Inc. (Nasdaq:CRON).
Trulieve Cannabis Corp (OTCMKTS: TCNNF) Announces a Listening and Education Tour
Trulieve Cannabis Corp (OTCMKTS: TCNNF) will host a Listening and Education Tour. The tour aims to meet with local leaders and exchange ideas. It will cover topics like expungement, agricultural, economic, and medical opportunities in the cannabis industry.
Champ Bailey will moderate the event
Champ Bailey, a football Hall of Famer and the chief diversity officer at Trulieve Georgia, will moderate the event. Additionally, Trulieve will hold its first event at the Carolyn Harris Performing Arts Center, Adel.
According to Bailey, a resident and native of Georgia, he is excited to meet experts and teach people the medical benefits of cannabis. He adds that Trulieve will make several tour stops to meet with community leaders. With the help of these leaders, the company will teach locals about how the cannabis industry could change the community. It will also create local support programs.
Experts that will be at the events
Moreover, the programs will have various industry experts, including Jim Wernick, the Director of State Expansion at Trulieve; Dr. James Lillard, the lead researcher at more house school of Medicine; Chase Daughtrey, a Cook County Judge, Heather Green, the president of the Adel-cook County Chamber of Commerce, and Luther Duke, the Mayor of Adel.
Trulieve is asking communities to submit questions before each stop through its emails. After the sessions, the company will also try to develop ways to help the community.
Trulieve is a cannabis company that operates in 11 U.S states. It has leading operations in Pennsylvania, Florida, and Arizona. Its other locations are Maryland, West Virginia, Connecticut, Massachusetts, and California.
Trulieve focuses on logistics, cultivating, processing, manufacturing, wholesale, and retail of cannabis and cannabis-infused products. It sells these products through Trulieve branded retail stores. It also has an online website where customers can purchase its products.
Trulieve products include nasal sprays, tinctures, vapes, edibles, dissolvable powders, capsules, topicals, concentrates, and flowers. It sells them through the Roll One, Modern Flower, Loveli, Co2lors, Avenue, Alchemy, Sweet Talk, Muse, Momenta, and Cultivar Collection brands.
The company also has 161 dispensaries, 112 of which are in Florida. Its headquarters are in Quincy, Florida.
Medical Marijuana Inc’s (OTCMKTS: MJNA) Subsidiary, HempMeds Brasil, Will Sponsor an Obesity Medicine Symposium
HempMeds Brasil, a subsidiary of Medical Marijuana Inc (OTCMKTS: MJNA), will sponsor the first Obesity Medicine Symposium for the Brazilian Society of Obesity. This event will take place on March 3-6, 2022.
The symposium will educate people on the benefits of cannabidiol
The Symposium will be at the Centro South Convention Center, Santa Catarina. It aims to bring together medical professionals, wellness organizations, and educators to talk about technological innovations and techniques that have emerged in treating obesity. HempMeds is sponsoring the event to spread awareness on how cannabidiol can be a crucial step in wellness routines.
According to Matheus Patelli, the Managing Director at Hemp Meds Brasil, the event gives the company a chance to educate people on cannabidiol. It will also highlight the benefits of cannabinoids in wellness, how people can use them, and the research surrounding them.
Patelli adds that the event will benefit both the people and the company as cannabidiol is legal in the country. Moreover, the government subsidizes it, so people know how and when to use it.
HempMeds will also give a presentation
Besides providing sponsorship for the event, HempMeds will also give a presentation on cannabidiol and medical cannabis on March 4. The presentation will touch on products in Brazil, their safety, legality, and applications.
Blake Schroeder, the CEO of Medical Marijuana, states that the company has had high revenue and operational growth in the last few years. Furthermore, its brand presence enabled it to host and sponsor the event. Schroeder adds that it has partnered with high-profile researchers and doctors. This move has allowed Medical Marijuana to educate and be transparent with its customers.
HempMeds Brasil was among the first cannabis companies which the National Sanitary Surveillance Agency has approved to import cannabidiol-based products. The company’s license allows it to supply products to various medical centers.
These products treat multiple sclerosis, chronic pain, Parkinson’s disease, and epilepsy. HempMeds is developing products for other diseases.
HempMeds’ parent company, Medical Marijuana, is a cannabis company that operates under various subsidiaries. Other than HempMeds, or also owns Kannaway. The company also partners with companies like Neuropathix and Axim Biotechnology Inc. Its headquarters are in San Diego, California.
Fire & Flower Holdings Corp’s (OTCMKTS: FFLWF) Subsidiary, Pineapple Express Delivery Inc, Will Offer Delivery in Metro Vancouver
Pineapple Express Delivery Inc, a subsidiary of Fire & Flower Holdings Corp (OTCMKTS: FFLWF), will offer next business day delivery via e-commerce websites owned by British Columbia Cannabis stores in Metro Vancouver. This will start on February 28, 2022.
Pineapple express makes fast deliveries
Pineapple Express is the most prominent cannabis delivery company. It does over 40,000 deliveries monthly to medical and adult-use cannabis customers in Canada. This company has become an essential part of Fire & Flower holdings since its acquisition on January 25, 2022.
According to the President of Pineapple Express, Randy Rolph, the company recognizes its customers’ need for fast delivery. Cannabis users in the Metro Vancouver area will now take advantage of the subsidiary’s services as it will begin offering next-day delivery services in British Columbia.
Ralph adds that Pineapple Express is very efficient with the fastest and highest scale in the country. The company can also make cost-effective deliveries.
Fire & Flower is a cannabis retailer that has over 100 stores. It uses Hifyre, a technology development subsidiary, to improve its operations and increase revenues. It also educates its customers on cannabis use.
Fire & Flower stores
Fire & Flower sells cannabis products through numerous stores. One of its first stores is Friendly Stranger, which opened in 1994 in Canada. This store has been advocating for cannabis legalization for years.
Friendly Stranger has worked to educate people on the benefits of using cannabis. It has also fought for people who were unfairly charged with cannabis use and made safe hemp products available for the people.
Another store that Fire & Flower owns is Happy Dayz which opened in 2007. The store now has 9 locations in Ontario. Unlike Friendly Stranger, these stores are smaller with an engaging team to give customers a more personalized experience.
HotBox Cannabis is a store that serves customers in Toronto. It also comes with a cannabis consumption lounge at 204 Augusta Street. This lounge, which was the first in Toronto, is near its 206 Augusta store, making it more convenient for cannabis customers. The lounge also sells accessories.
Fire & Flower also uses the Open Field Distribution logo to distribute wholesale products in Saskatchewan.