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Monday, September 26, 2022

Weekly Roundup on the Cannabis Sector & Psychedelic Sector


Key Takeaways; Cannabis Sector

  • AFC Gamma secured $60 million revolving credit facility with commitments from 2 FDIC-insured banks.
  • Cannabis REIT Innovative Industrial Properties Q1 revenue increased 9%, to $64.5 million.
  • WM Technology beat estimates for first quarter revenue.

Key Takeaways; Psychedelic Sector

  • Awakn announced that management team will present at four upcoming May 2022 conferences.
  • New study from Compass Pathways shows positive results for COMP360 psilocybin therapy.

As cannabis traders wait for a surprise catalyst to help the sector break out of its downtrend, long-term investors continue to monitor the fundamental patterns of the top and developing companies, many of which are expected to report financial results in May. Below is a roundup of the top cannabis and psychedelics companies that dominated the business headlines during the first week of May.

Top Marijuana Companies for Week

#1: AFC Gamma

AFC Gamma, Inc. (NASDAQ: AFCG), a marijuana industry lender, announced that it had received a $60 million revolving credit facility from two federally insured banks. In a Monday morning, May 2nd news release, the Florida-based company did not name the banks but stated they had combined assets of more than $70 billion. AFC Gamma can extend the size of the senior secured revolving credit facility to $100 million under the terms of the agreement.

AFC Gamma said it plans to use the funds to bankroll unfunded loans to existing borrowers as well as to make new loans. In addition, the company also said that it plans to use the money for working capital and other general corporate purposes.

According to the conditions of the arrangement, the credit facility will mature in April 2025 and will have a floating interest rate of prime plus 0.5% with a prime floor of 4%. Additionally, AFC Gamma announced that it had terminated a $75 million revolving credit agreement with AFC Finance, an affiliate of AFC Gamma CEO, Leonard Tannenbaum.

AFC Gamma has committed $82.5 million to Bloom Medicinals and $46.3 million in additional loans to Verano Holdings, Nature’s Medicines, and Natrabis which are all significant players in the cannabis industry.

#2: Innovative Industrial Properties

Innovative Industrial Properties, Inc. (NYSE: IIPR) announced results for the first quarter ended March 31, 2022, after the market closed on Wednesday, May 04, 2022. The cannabis REIT generated total revenues of $64.5 million in the third quarter, up 50% from the previous quarter. However, revenues of $67 million fell short of the Yahoo Finance analyst estimates.

According to IIP, the increase was principally driven by the acquisition and leasing of new properties, as well as increased upgrade allowances and construction finance at existing properties, which resulted in base rent adjustments and contractual rental escalations at specific properties.

IIP also reported net income attributable to common stockholders of $34.7 million and net income attributable to common stockholders per diluted share of $1.32, respectively. This also fell short of the $1.41 consensus analyst estimate. The company also stated that, during the three months ended March 31, 2022, the diluted funds from operations (FFO) and FFO per diluted share were approximately $48.9 million and $1.86, respectively.

#3: WM Technology

WM Technology, Inc. (NASDAQ: MAPS) reported financial results for the first quarter ended March 31, 2022, with revenue increasing 40% from the first quarter of 2021 to $57.5 million. This exceeded the $55.25 million revenue estimate from Yahoo Finance.

The company also reported that the net loss was $31.2 million, compared to a profit of $7.7 million in the previous year. Additionally, the basic and diluted net loss per share was $0.19 based on 72.5 million Class A Common Stock weighted average shares outstanding, which also missed the Yahoo Finance average analyst estimate for $0.04 per share.

WM Technology also stated that in the third quarter, Weedmaps, which is an online marketplace that allows cannabis users to search for and browse cannabis products from retailers and brands, added over 250 Average Monthly Paying clients, including in new states like Montana, which legalized recreational marijuana in January.

Based on current business trends and conditions, Weedmaps gave a guidance outlook for the second quarter ending June 30, 2022. And according to the company, revenue is estimated to be between $60 million and $63 million, which represents 28-34% growth over the second quarter of 2021.

Top Psychedelic Company for Week

#1: Awakn

Awakn Life Sciences Corp. (NEO: AWKN) (OTC: AWKNF), a biotechnology company focused on studying, developing, and delivering combination therapeutics to treat addiction, announced on May 5, 2022, that members of its executive team will be presenting at the following May 2022 conferences.

The first conference will be PSYCH Symposium: London 2022, which is a one-of-a-kind event that brings together industry professionals to network and collaborate to improve access to psychedelic healthcare across Europe. The conference will bring together important thought leaders from research, policy, and business, including Awakn’s chief research officer, Prof. David Nutt, and Prof. Celia Morgan, Awakn’s head of ketamine assisted psychotherapy for addiction, among other think-tanks. The conference will take place at The National Gallery in London, UK, on Wednesday, May 11, 2022.

Other conferences include the Nordic Psychedelic Science Conference, which will take place in Oslo, Norway on May 19-20, 2022. The H.C. Wainwright Global Investment Conference will take place online from May 23 to 26, 2022. And finally, From Research to Reality: Global Summit on Psychedelic-Assisted Therapies and Medicine Conference, which will take place at the Hilton Toronto Downtown in Toronto, Canada on May 27-29, 2022. Check out Awakn’s social media for more information on each conference.

#2: COMPASS Pathways

COMPASS Pathways plc (NASDAQ: CMPS), a mental health care company dedicated to accelerating patient access to evidence-based innovation in mental health, on 3 May 2022 announced that positive data demonstrating the potential of COMP360 psilocybin therapy in anorexia nervosa and severe treatment-resistant depression was presented at the Society of Biological Psychiatry Annual Meeting in New Orleans. The data was from two investigator-initiated studies.

Dr. Scott Aaronson of Sheppard Pratt in Baltimore led the first study, which looked at the safety and efficacy of COMP360 psilocybin therapy in patients with severe treatment-resistant depression. 12 weeks after COMP360 psilocybin administration, the researchers discovered that 58.3% of the participants had maintained response criteria for the Montgomery-Asberg Depression Rating Scale (MADRS), and a quarter had sustained remission.

Dr. Walter Kaye of the University of California San Diego School of Medicine conducted the second study, which investigated at the safety, efficacy, and tolerability of COMP360 psilocybin therapy in patients with anorexia nervosa. And according to this study, COMP360 psilocybin therapy was well-tolerated, with 90% of participants finding the experience meaningful and therapeutic.

These positive results, according to Dr. Guy Goodwin, Chief Medical Officer of COMPASS Pathways, give promising preliminary evidence that COMP360 psilocybin therapy could help persons suffering from anorexia nervosa and severe treatment-resistant depression. He also stated that he believes this therapy should be examined further in larger-scale clinical studies.

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