During the past trading week (July 29 to August 2), a new financial results release signaled a potential turn of the page for Canadian cannabis producer Aphria (NYSE:APHA,TSX:APHA).
More insights into the CannTrust Holdings (NYSE:CTST,TSX:TRST) situation made headlines, while the decriminalization of marijuana in New York also caught attention.
Here’s a closer look at some of the biggest news during last week’s trading period.
Shares of Aphria jump following positive quarter
Aphria shocked the market with its fiscal Q4 and year-end results on Thursday (August 1), reporting positive net income of C$15.8 million during the latest quarter.
For the 12 month period ended on May 31, 2019, Aphria reported net income of C$29.5 million. Interim Aphria CEO Irwin Simon said the results represent a new day for the company. “Over the last six months, our organization identified immediate priorities to help generate substantial progress near-term and long-term,” he said in a press release.
“We built upon existing business fundamentals and capabilities, streamlined processes, strengthened governance, and focused on building brand awareness,” Simon added.
The company credited the results to C$99.2 million in distribution revenue from CC Pharma, its German pharmaceutical distributor subsidiary.
Aphria is now projecting revenue of between C$650 million and C$700 million in its 2020 fiscal year.
Shares of the Canadian producer surged in New York and Toronto following the financial results, opening at US$6.74 and C$8.94, respectively. As of 1:04 p.m. EDT on Friday (August 2), shares of the producer were up over 30 percent on both exchanges.
CannTrust faces OSC investigation
CannTrust informed shareholders that — in addition to a projected delay in its upcoming financial report — the company is now being investigated by the Ontario Securities Commission (OSC).
“Today, staff of the OSC advised the Special Committee’s legal counsel that an investigation has been opened into matters and parties related to CannTrust and the investigation has been assigned to the Joint Serious Offences Team of the Enforcement Branch of the OSC,” the firm indicated on Friday.
Co-founder and former board chair Eric Paul — who also previously served as CEO of the company alongside Director Mark Litwin — sold approximately C$1 million worth of CannTrust shares on November 16, 2018. An additional C$5 million in shares were sold through Cannamed Financial, a holding company.
New York decriminalizes marijuana
Also last week, New York Governor Andrew Cuomo (D) signed a bill officially decriminalizing marijuana use and possession in the state. However, the state failed to introduce a full legalization program after reported disputes on where to allocate tax revenue from a full cannabis program.
“It’s not legalization,” Cuomo said, according to NBC New York. “But it is decriminalization and it’s a major, major accomplishment.”
On Monday (July 29), representatives Nydia M. Velázquez (D-NY) and Steve Stivers (R-OH) introduced the Clarifying Law Around Insurance Marijuana (CLAIM) Act into Congress. This proposed bill would allow insurers to offer services to players in the marijuana industry, despite the federal illegality of the drug.
“Without this legislation, insurers will understandably be reticent to insure businesses operating in the cannabis sector,” Velázquez said in a statement. “This means a legal cannabis distributor whose product is ruined from a flood or fire could lose all their capital and their livelihood.
Colorado-based Dixie Brands (CSE:DIXI.U,OTCQX:DXBRF) told the Investing News Network (INN) that its upcoming FUSE line of beverage products will bring the launch of brand new water-soluble drink additives containing THC.
“In this case we’ll have flavored THC as well as non-flavored THC drink additives. If somebody has tea or coffee or … orange juice and they want to put some THC in it, they’ll be able to do that,” explained Chuck Smith, CEO of Dixie.
Smith expressed an optimistic outlook for cannabis-infused drinks moving forward and indicated that his company’s entire line of products is planned to be available in Canada through a partnership with Auxly Cannabis Group (TSXV:XLY,OTCQX:CBWTF)
According to a new co-authored report from PwC Canada and CB Insights, cannabis investment from private money is seeing a downturn in 2019. So far in the year, US$42 million has been raised through 18 total deals. In 2018, US$224 million was raised across 51 deals.
“After unprecedented highs in 2018, this year has seen less funding and fewer deals for Canadian companies,” Anand Sanwal, co-founder and CEO of CB Insights, said in a press release.
Last month, the Florida Office of Medical Marijuana Use indicated that there were 144 active dispensaries in the state as of July 26. While Florida remains a medical-only market, the CEO of a fellow MSO — Kim Rivers with Trulieve Cannabis (CSE:TRUL,OTC Pink:TCNNF) — previously told investors she expects a vote on adult use by the 2024 ballot.
The C$1 million sale raised Aleafia Health’s monthly gross revenues average to a higher mark than the recorded revenue generated throughout 2018.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
American cannabis sales hit US$17.5 billion in 2020, a research group’s new study shows.
Meanwhile, a Canadian cannabis producer began offering CBD beverages in the US, another move that shows how interested Canadians are in the overall US cannabis market at the moment.
Some pretty important news out of health and wellness; beverage and natural products company BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) this week. For those of you following the Company with us, stay tuned.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).