Key Takeaways; Cannabis Sector
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Ascend Wellness exceeded expectations in 2024 despite Q4 revenue decline
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Cresco reported a decline in revenue but achieved record cash flow
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Village Farms reported revenue growth despite inventory impairment
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GrowGeneration faced sales decline leading to lower revenue projections for 2025
Key Takeaways; Psychedelic Sector
Below is a weekly roundup of what happened this week in the cannabis and psychedelic sectors. In this ever-evolving landscape, we explore the major developments and groundbreaking initiatives happening among companies operating in these industries; from advancements in medical research, therapeutic applications to shifts in legal frameworks and current market trends.
Top Marijuana Companies for the Week
#1: Ascend Wellness
Ascend Wellness Holdings, Inc. (CSE: AAWH.U) (OTCQX: AAWH) reported mixed financial results for full year 2024 and fourth quarter, with full-year revenue growing 8.3% to $561.6 million despite a 4% quarter-over-quarter decline in Q4 revenue to $136 million. While the company struggled with continued losses, its leadership remains optimistic about future growth.
Retail revenue in Q4 dropped by 4% to $90.4 million due to pricing pressures in key markets like Illinois, Massachusetts, Michigan, and New Jersey. Wholesale revenue also saw a 5% decline, totaling $45.6 million. However, adult-use sales in Ohio and new partner stores in Illinois helped offset some of these losses.
The company reported a net loss of $16.8 million for the quarter, marking an improvement from Q3’s $28.3 million loss. CFO Roman Nemchenko highlighted the company’s efforts, stating, “Significant progress has been made in strengthening our balance sheet and improving our margins and profitability.”
For the full year 2024, Ascend’s retail revenue increased marginally by 0.3% to $372.2 million, while wholesale revenue surged 28.5% to $189.4 million. However, the company still reported a net loss of $85 million, a significant drop from the $48.2 million net loss in 2023.
Despite the challenges Nemchenko, expressed confidence in the company’s financial progress, stating, “Significant progress has been made in strengthening our balance sheet and improving our margins and profitability. This has resulted in a 450-basis point sequential improvement in Adjusted EBITDA margin and $30.1 million in Free Cash Flow generated in the quarter.”
Looking ahead, Ascend plans to drive revenue growth while continuing cost-cutting initiatives. With new dispensaries in development across Ohio, Pennsylvania, and Illinois, the company aims to cement its place as a leading multi-state cannabis operator in the increasingly competitive market.
#2: Cresco
Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) experienced a drop in revenue in the fourth quarter of 2024 but managed to strengthen its financial position through record cash flow and profitability improvements.
The company’s Q4 revenue declined to $176 million, down from $179 million in Q3 and $188 million in Q4 2023. However, it posted a net income of $0.4 million, a significant improvement from the $7.6 million loss in the previous quarter.
For the full year, Cresco generated $724 million in revenue, lower than $770 million in 2023. The decline was attributed to the company’s exit from lower-margin businesses, focusing instead on core markets. Despite this, Cresco recorded a record operating cash flow of $132 million and free cash flow of $114 million, demonstrating strong financial position.
CEO Charlie Bachtell highlighted the company’s strategy, stating, “In 2024, the team executed with discipline—streamlining operations, prioritizing profitability, and generating record free cash flow. With a leading brand position and strong retail productivity, our foundation is stronger than ever.”
Looking ahead, Cresco is expanding into Kentucky, securing a Tier 3 cultivation license to operate a 25,000-square-foot facility. Bachtell emphasized the strategic importance, stating, “Kentucky is our first of these new market expansions—a strategic addition backed by clear regulations. This move allows us to scale efficiently and reinvest in our operations.”
#3: Village Farms
Village Farms International, Inc. (NASDAQ: VFF) announced its financial results for the fourth quarter and full-year 2024, showing an 11% increase in consolidated sales to $82.6 million, surpassing analysts’ estimates of $79 million.
However, earnings were affected by a $10.5 million non-cash impairment charge due to low-quality cannabis inventory acquired from third parties. “Fourth quarter saw continued strong performance from Canadian Cannabis,” said the company’s CEO, Michael DeGiglio, “but results were impacted by a non-cash impairment.” Despite this, Canadian cannabis achieved a gross margin of 33% and an adjusted EBITDA margin of 12%.
For the full year, total sales increased to $336 million, though net loss slightly worsened to $35 million from $34 million in 2023. Excluding the impairment charge, full year adjusted EBITDA stood at $12.2 million.
The company also reported a 113% increase in international sales, driven by growth in Australia, Germany, and the UK. “We have now shipped to five international markets with the recent addition of New Zealand and aim to triple international medicinal export sales in 2025,” DeGiglio said.
Despite facing challenges with non-cash impairment, Village Farms remains well-positioned for further expansion across North American and international markets. Reassuring investors, DeGiglio stated, “We’re starting the year with good momentum to execute our profitable growth strategy.”
#4: GrowGeneration
GrowGeneration Corp. (NASDAQ: GRWG) reported a significant decline in net sales for the fourth quarter and full year of 2024, attributing the downturn to its extensive restructuring efforts. The company also forecasted lower revenue for 2025 but remains optimistic about long-term profitability.
In Q4 2024, GrowGen’s net sales fell to $37.4 million, marking a $12 million drop from the previous year. Analysts had anticipated slightly higher earnings of $38.1 million, making the results a miss on estimates. The decline was mainly due to the closure of 19 retail locations as part of the company’s restructuring plan.
GrowGen CEO, Darren Lampert, highlighted a key achievement despite the challenges: “Our proprietary brand sales as a percentage of cultivation and gardening net sales grew to 30.4%, up from 21.2% last year.” Additionally, same-store sales increased by 1%, indicating strong customer retention.
The company also saw a reduction in its net loss, which improved to $23.3 million from $27.3 million in Q4 2023.
For 2024, GrowGen’s net sales dropped by $37 million, totaling $188.9 million compared to $225.9 million in 2023. The bulk of this decline came from the cultivation and gardening segment, which reported $163.5 million in net sales, down from $194.5 million the previous year.
Lampert described 2024 as a “pivotal year” for the company. “We successfully completed a strategic restructuring to transform GrowGen into a leaner, more efficient, and product-driven company with a B2B focus,” he stated. He also emphasized the company’s shift toward digitalization, noting the launch of a new B2B e-commerce platform in Q4 aimed at boosting operational efficiencies.
Despite the overall decline, proprietary brand sales increased to 24.2% of net sales, showing the company’s strategic push to expand its product line. However, the net loss for the year rose to $49.5 million, up from $46.5 million in 2023, largely due to restructuring costs.
Looking ahead, GrowGen projects 2025 revenue between $170 million and $180 million, signaling another year of decline. However, the company anticipates a financial turnaround, estimating adjusted EBITDA to shift from a $2 million loss to a $2 million profit. The company also expects its gross profit margin to improve to 29%-31%.
Top Psychedelic Companies for Week
#1: Solvonis Therapeutics
Solvonis Therapeutics PLC (LSE: SVNS), a leading biotechnology company specializing in mental health therapeutics, announced the appointment of Dr. Renata Crome as an independent Non-Executive Director, effective March 11, 2025.
Dr. Crome, who is a veteran in drug development, brings over 40 years of experience in pharmaceutical innovation, having played a key role in the development of blockbuster drugs at Roche, including Avastin® (bevacizumab) and Tamiflu®. During her tenure, she led a team of over 250 professionals, overseeing more than 100 early-stage drug development programs, particularly in oncology, infectious diseases, and central nervous system (CNS) treatments.
In a press release, she emphasized her expertise in CNS therapeutics, stating, “I have extensive experience in developing treatments in the central nervous system area, and I know the challenges and some of the solutions.”
Dr. Crome’s appointment is a strategic addition to Solvonis, and it comes at a pivotal moment for the company, which recently acquired Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF) in a major biotech deal. Her regulatory and commercial expertise will support the company’s expansion into mental health and addiction treatment innovations.
Chair of Solvonis, Dennis Purcell, expressed enthusiasm for the new addition, stating, “We are thrilled to welcome Dr. Crome to the Board. Her expertise in drug development, regulatory affairs, and commercial strategy will be invaluable as we push forward with innovative therapies in mental health and addiction”.
Dr. Crome echoed this excitement, adding, “It’s a privilege to join Solvonis at such a transformative time. The company’s dedication to addressing unmet needs in addiction and mental health through pioneering science is inspiring.”
#2: Incannex Healthcare
Incannex Healthcare Inc. (NASDAQ: IXHL) successfully raised $12.5 million to fund ongoing clinical trials, particularly the advancement of its sleep apnea treatment, IHL-42X. The company announced that the proceeds will support the completion of the U.S. Phase 2 study and the initiation of a global Phase 3 trial for the drug, which is being tested in both the U.K. and the U.S.
The funds were raised through security purchase agreements with institutional investors, involving the sale of 11,574,090 shares at $1.08 per share. Investors also received Series A common stock warrants with an initial exercise price of $2.16 per share. The deal was expected to close by March 10, 2025.
Incannex plans to use the funds for multiple purposes, including repaying convertible debentures, supporting working capital, and fulfilling general corporate obligations. CEO Joel Latham emphasized the company’s commitment to addressing obstructive sleep apnea (OSA), stating, “Patients with obstructive sleep apnea need new and convenient therapeutic options to manage this serious, chronic, and life-threatening disease. We are enthusiastic about the potential for IHL-42X, an oral, once-daily treatment that uniquely targets physiological pathways responsible for the airway obstruction characteristic of OSA.”
Despite raising this significant capital, Incannex has faced financial struggles. In its recent fiscal second-quarter earnings report, the company recorded a revenue of just $12,000 and a net loss of $6.3 million, compared to a $4.3 million loss in the previous year. At the time, cash reserves had also dwindled to $2.1 million. With the latest funding boost, Incannex aims to push forward its promising sleep apnea and anxiety disorder treatments while stabilizing its financial position.
