Weekly summary of the cannabis and psychedelics sectors

Key findings; Cannabis sector

Tilray’s expands its European footprint, achieving new milestones in Germany and Portugal.
Glass House Brands celebrates court victory, dismissing Catalyst lawsuit
GrowGeneration announces revenue growth despite store closures.

Key findings; Psychedelic sector

Below is a weekly recap of what happened this week in the cannabis and psychedelic sectors. In this ever-changing landscape, we explore the major events and groundbreaking initiatives being undertaken by companies operating in these industries; from advances in medical research, therapeutic applications, to changes in regulatory frameworks and current market trends.

Top marijuana companies this week

#1: Tilray

Tilray, Inc. BrandNASDAQ:TLRY)a world leader in cannabis research, cultivation, production and distribution, has recently achieved significant milestones in Europe, in particular in Germany and Portugal.

On July 22, 2024, Tilray announced that its subsidiary, Aphria RXbased in Neumünster, Germany, received the first license to cultivate medicinal marijuana under the recently passed Marijuana Law in Germany. The new German marijuana law, which It has been approved The Act of 23 February 2024, which entered into force on 1 April 2024, removed marijuana from the list of drugs and legalised possession by adults of up to 25 grams.

The law also allowed the establishment of “cannabis clubs” and amended the German Medicinal Cannabis Act (MedCanG). Under the amended MedCanG, operators can market and distribute their own crops, but they must meet strict quality requirements and obtain permission from the German Federal Institute for Drugs and Medical Devices.

Aphria RX’s new license allows it to cultivate and produce a wide range of medical marijuana products, significantly increasing its production capacity and the number of approved marijuana strains from three to 31.

In addition to its achievements in Germany, Tilray also made progress in Portugal. July 24, 2024 Tilray Medical I received approval for its third medical marijuana product in Portugal, Tilray Solução Oral THC10. This approval follows the successful launch of Tilray Medical’s whole flower THC 18 and its first cannabis extract in Portugal earlier this year.

Tilray’s recent product licensing and approvals in Germany and Portugal mark significant progress in the European medical cannabis market. The company continues to lead the global medical cannabis industry, offering a diverse portfolio of EU-GMP certified medical cannabis products in over 20 countries. These milestones reflect Tilray’s strategic growth and commitment to delivering high-quality medical cannabis to patients, solidifying its position as a global leader in the industry.

#2: Glass House

Civil lawsuit against Glass House Inc. Brands (OTC: GLASF) By Catalyst Cannabis Co. he was firedwith summary judgment granted in favor of Glass House. The California Supreme Court in Los Angeles County ruled July 15, ordering the holding company Catalyst, 562 Med Discountto cover legal costs associated with the lawsuit.

Glass House CEO Graham Farrar expressed relief at the dismissal, calling the lawsuit frivolous. “But more importantly, we are happy to put behind us a waste of time, energy and resources for all parties,” he said in a text message.

“We hope that we can put an end to infighting and come together as an industry to address our many common challenges, such as over-taxation and inadequate access to legal services, which would benefit patients, consumers and the industry as a whole.”

The dispute began in June 2023, when Catalyst CEO Elliot Lewis accused Glass House of being a major operator of the black market for cannabis. The court dismissed those allegations, saying that addressing such claims would exceed the functions of the California Department of Cannabis Control.

Before the court decision Glass House it fell in May, filing a defamation lawsuit against Catalyst, citing concerns about disclosing confidential customer information.

Despite the legal battles, both companies remain significant players in the California marijuana market, with Catalyst operating 30 retail locations and Glass House being a large vertically integrated operator. Glass House shares rose 1.8% to $7.05 on the news.

#3: GrowGeneration

(GrowGeneration Corp.)NASDAQ: GRWG) announced mixed updates for its second quarter Preliminary results 2024highlighting both revenue growth and significant store closures. The company reported 10.6% sequential net revenue growth, reaching more than $53 million compared to $47.9 million in the prior-year quarter. The growth was primarily driven by commercial customers.

The company’s CEO, Darren Lampert, emphasized that the company intends to increase its market reach and profitability by focusing on private labels and an improved B2B e-commerce platform.

To support this change, GrowGeneration said it is implementing a comprehensive restructuring plan. It includes closing 19 underperforming stores, with seven already closed in the first half of 2024 and the remaining closures expected within 90 days, leaving 31 operating stores. The company said the restructuring plan is aimed at improving inventory management, sales and marketing, with the goal of achieving $12 million in cost savings over the next year.

Looking ahead, GrowGeneration aims to achieve 35% of its sales from private label by the end of 2025 and plans to introduce 50 new products in the next 12 months. The company also plans to launch a B2B e-commerce portal in the fourth quarter of this year to move more transactional activities online.

In addition to the announcement of GrowGeneration’s preliminary results announced that he had planned The press conference regarding the publication of second quarter 2024 results will be held on August 8, 2024 after the market close. The results will be announced via a live conference call at 4:30 p.m. ET.

Top Psychedelic Companies of the Week

#1: Awakening

July 22, 2024 Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF)a biotechnology company operating in the clinical trial phase, focusing on therapy in the treatment of psychoactive substances addictions and mental health disorders, update provided in its intellectual property (IP) portfolio for the Aminoindane new chemical entity (NCE) series. This portfolio is developed in collaboration with Graft Polymer (UK) Plc (LSE: GPL license).

Aminoindane NCEs are novel small molecule empathogens that increase the release of serotonin, dopamine, and norepinephrine while inhibiting their reuptake. These compounds are targeted at treating trauma-related mental health disorders, such as post-traumatic stress disorder, which affects millions of people worldwide.

Awakn filed provisional patent applications for NCE Aminoindane in 2021, covering pharmaceutical compositions and innovative methods of treatment. Since then, the patent portfolio has shown promising progress in multiple jurisdictions, including United States, Europe and Canada.

Awakn initiated its IP strategy in May 2021 with two provisional patent applications. In May 2022, a Patent Cooperation Treaty (PCT) application was filed, claiming priority for these provisional applications. In August 2022, the European Patent Office issued a favorable search report and written opinion, confirming the novelty and inventiveness of Awakn’s lead compounds.

The PCT application was published in November 2022, followed by an International Preliminary Patentability Report in November 2023, and entry into the US and Canadian national phases and the European regional phase in December 2023. In April 2024, a US application to join the Patent Prosecution Highway was granted, indicating a likely US grant.

Prof. David Nutt, CEO of Awakn, commenting on these updates, said: “These advances in our patent portfolio demonstrate the innovative potential of our Aminoindane NCEs. We are committed to advancing these compounds through the development pipeline to address the significant unmet needs in mental health and addiction treatment.”

#2: Compass Paths

July 23, 2024 RBC Capital Markets coverage initiated COMPASS Pathways Joint Stock Company (NASDAQ: CMPS)a company specializing in the treatment of mental disorders, “Output” rating and $23 target price per share. According to RBC, this optimistic outlook is based largely on the company’s promising Phase III clinical trials in the emerging field of psychedelic treatments for mood disorders, with a strong likelihood of positive results expected in the fourth quarter of 2024.

Despite recent market declines in the psychedelic sector, RBC Capital sees current conditions as favorable for investors, noting challenges such as commercialization and intellectual property concerns, but still recommending Compass Pathways as a strong investment opportunity. RBC’s confidence is bolstered by a revenue forecast of $2.3 billion, indicating significant growth potential.

Compass Pathways recently took strategic steps to prepare for potential regulatory approval and commercialization of its psilocybin formulation, COMP360, for the treatment of treatment-resistant depression. This includes Lori Englebert’s nomination as Commercial Director and significant progress in clinical trials, with key data expected in late 2024 and mid-2025.

Financially, the company reported $20.8 million used in operations and maintains solid cash reserves of $262.9 million to support operations until 2026. These developments have made investors and market observers like RBC keep a close eye on Compass Pathways.