Key Takeaways; Cannabis Sector
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Tilray reported mixed Q2 results amid revenue growth and continued losses
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Safe Harbor eliminated $1.2M liability in credit union deal
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Agrify sold cultivation business to former CEO’s firm for $7 million
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Canopy USA appointed cannabis veteran as first president to lead U.S. expansion
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: Tilray
Tilray Brands, Inc. (NASDAQ: TLRY), a global cannabis and lifestyle consumer goods company, recently announced its financial results for the second quarter of fiscal 2025. While the company recorded revenue growth and improved profitability metrics in key segments, it faced challenges that led to significant net losses, causing its stock to drop over 11% on Friday, January 10, 2025.
Tilray achieved a 9% year-over-year revenue increase, reaching $211 million, slightly below Wall Street’s expectations of $216.3 million. Despite the miss, this marked consistent progress compared to the $194 million reported in the prior year quarter. The beverage alcohol segment demonstrated robust performance, with a 36% revenue increase to $63 million, supported by improved gross margins of 40% compared to 34% a year ago. The wellness division also saw a 13% revenue rise to $15 million, while cannabis revenues remained steady at $66 million.
Gross profit grew 29% year-over-year to $61 million, with the gross margin improving from 24% to 29%. However, the company reported a net loss of $85 million, of which $75 million consisted of non-cash items like foreign exchange losses and stock-based compensation. Adjusted net loss stood at $2 million, in line with the previous year. Adjusted EBITDA fell slightly to $9 million from $10 million, impacted by strategic SKU rationalization in the beverage segment.
Irwin D. Simon, Chairman and CEO of Tilray Brands, expressed optimism about the company’s long-term prospects. “Our fiscal second quarter demonstrates strong progress on our strategic plan. We are improving gross margins and profitability across all segments, and we remain committed to achieving our financial guidance for the year,” he stated. Simon also emphasized Tilray’s goal to solidify its leadership in the beverage, cannabis, and wellness markets while preparing for potential U.S. cannabis legalization.
As for the outlook for fiscal year 2025, Tilray reaffirmed its revenue guidance of $950 million to $1 billion, reflecting 17.6% growth at the midpoint. Analysts also project a 14.4% revenue increase over the next 12 months, suggesting acceleration in product performance and market penetration. However, persistent cash burn and infrastructure demands remain challenges. Tilray reported a negative free cash flow margin of 21.9%, burning $46.19 million in the quarter.
#2: Safe Harbor
Colorado-based SHF Holdings, Inc. (NASDAQ: SHFS), a leading cannabis industry financial services firm, which operates as Safe Harbor Financial, recently announced that it had restructured its partnership with Partner Colorado Credit Union (PCCU), eliminating $1.2 million in indemnity liability from its balance sheet. The modified four-year agreement deal, which came into effect on January 1, 2025, simplified the company’s operations by removing the requirement for Safe Harbor to maintain loan loss reserves for cannabis industry loans.
Safe Harbor CEO, Sundie Seefried, called the update a “positive and pivotal development,” highlighting its role in addressing contingent liability exposure and aligning expenses with income more effectively. The adjusted fee structures and removal of loan indemnification are expected to enhance the company’s financial performance and boost shareholder value.
Safe Harbor has a strong track record in the cannabis banking sector, serving over 600 clients across more than 40 states and processing $23 billion in deposit transactions. The company recently reported a return to profitability, with a net income of $353,817 in the third quarter 2024 financial results, compared to a $748,067 loss a year earlier. Loan interest income rose 48% to $1.3 million during the same period.
This updated partnership with PCCU will help Safe Harbor builds on its commitment to supporting cannabis operators. The company’s recent initiative was a $500,000 loan to Denver-based PI 51st Avenue for helping the company implement energy-saving initiatives, which further highlighted Safe Harbor commitment to supporting the cannabis sector’s sustainability and innovation.
#3: Agrify
Agrify Corporation (NASDAQ: AGFY) announced it had completed the sale of its cannabis cultivation business to CP Acquisitions LLC, an investment firm affiliated with its former CEO, Raymond Chang, in a $7 million deal. The deal, which was finalized on December 31, 2024, marked a significant step in the company’s restructuring efforts.
The sale included the transfer of Agrify’s vertical farming units, Agrify Insights software, and related cultivation assets. Additionally, CP Acquisitions assumed liabilities tied to the cultivation operations and terminated two convertible notes valued at approximately $7 million.
“This transaction allows us to simplify our business and concentrate on more attractive growth categories tied to THC demand,” said Ben Kovler, Agrify’s interim CEO and chairman.
Kovler, who also serves as CEO of Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF), emphasized that Agrify will now focus on its hemp-derived THC Delta 9 (HD9) beverage lines. The company’s flagship THC product, the THC-infused margarita Señorita, is currently sold in nine U.S. states and Canada, with plans for further expansion.
This agreement deal follows a series of significant changes at Agrify, including a $20 million funding injection from a Green Thumb subsidiary and a subsequent management overhaul in November. The shake-up saw former CEO Raymond Chang and major investor I-Tseng Jenny Chan step down from Agrify’s board. Kovler, who was then Green Thumb’s CEO, took over as Agrify’s interim CEO during this transition. At the time, he highlighted a strong preference for Agrify’s extraction division, calling it a “high-end segment with pricing power and a loyal consumer base.” The follow up on these changes saw Chan sell her stake in Agrify for $18.3 million, signaling a broader financial realignment.
In addition to divesting its cultivation assets, Agrify recently acquired Double or Nothing, a hemp-based THC beverage maker known for its Señorita brand. The all-stock transaction reflected the company’s commitment to expanding its THC beverage portfolio.
Agrify’s stock, which trades under the ticker AGFY on Nasdaq, had continuously faced compliance challenges in recent months. However, the conversion of $13.8 million in debt to equity in May helped the company regain compliance with Nasdaq stockholders’ equity requirement.
And with its cultivation business now in the hands of CP Acquisitions, Agrify aims to solidify its position in the rapidly growing THC beverage market. As Kovler stated, “Focus drives excellence, and this move enables us to pursue our vision with clarity and precision.”
#4: Canopy Growth
Canopy USA, the American arm of Canadian cannabis operator Canopy Growth Corporation (NASDAQ: CGC) (TSX: WEED), named cannabis industry veteran Brooks Jorgensen as its first president. According to the company, Jorgensen, who brings over 25 years of experience in both the cannabis and alcohol beverage industries, will focus on driving profitable growth across the United States.
“Brooks is an accomplished executive in high-growth industries,” said Luc Mongeau, CEO of Canopy Growth and a board member of Canopy USA. “He will help unlock the full potential of Canopy USA, drive the organization to its next phase of growth, and solidify its standing as a leader in the market.”
Jorgensen brings a wealth of expertise, having served as president of Kiva Sales & Service, a leading California cannabis distributor. Prior to that, he spent over two decades at Southern Glazer’s Wine & Spirits and Moet Hennessy USA.
“Canopy USA is a unique platform with the right combination of ingredients to deliver success as a unified organization in what is considered a very challenging and complex industry,” Jorgensen said. “I am confident the cannabis and hemp markets will support the Canopy USA vision and strategy.”
Jorgensen’s appointment comes at a pivotal moment for Canopy USA, which is expanding its portfolio through key acquisitions. The company recently completed the purchase of marijuana brands, including the edibles manufacturer Wana Brands, California-based extract producer Jetty Extracts, and the acquisition of US multistate operator Acreage Holdings. These moves are part of Canopy Growth’s broader strategy to accelerate its entry into the U.S. cannabis market, a plan initially announced in 2022.
As Jorgensen steps into his new role, Canopy USA feel it’s poised to leverage its diverse brand portfolio to thrive in the competitive U.S. cannabis industry. “With the completed integration of the Canopy USA platform, this unique portfolio of brands, together with a growing retail presence in key states, represents significant upside in the dynamic U.S. cannabis industry,” Mongeau stated.
Top Psychedelic Companies for Week
#1: atai
atai Life Sciences (NASDAQ: ATAI), a clinical-stage biopharmaceutical company focused on transforming mental health treatment, made several key leadership changes to drive its novel psychedelic therapeutics pipeline forward. Dr. Srinivas Rao, Co-founder of the company, assumed the role of sole Chief Executive Officer (CEO). Alongside this appointment, Kevin Craig was promoted to Chief Medical Officer (CMO), Glenn Short, was also promoted to Chief Scientific Officer (CSO), and Gerd Kochendoerfer, joined as Chief Operating Officer (COO).
These appointments come as atai prepares for pivotal clinical trials. Dr. Rao emphasized, “We have strengthened our leadership team at a pivotal time as we advance VLS-01 and EMP-01 into Phase 2 clinical trials”. The new leadership is expected to enhance clinical development, scientific innovation, and operational excellence, positioning atai for success in its trials.
Dr. Rao, who was promoted to Co-CEO effective June 1, 2024, and assumed the role of CEO on January 1, 2025, has over 24 years of diverse biotechnology and pharmaceutical experience. Dr. Craig, who’s now CMO, brings his vast clinical background, having previously led early clinical development at Jazz Pharmaceuticals plc (NASDAQ: JAZZ). Dr. Short, who was appointed as CSO, will lead the company’s research programs and advance non-hallucinogenic 5-HT2AR agonists, while Dr. Kochendoerfer, who has more than 25 years of experience, will oversee operational strategies.
These leadership changes aim to bolster atai’s efforts in advancing treatments like VLS-01 and EMP-01, which are poised to address the unmet needs of those suffering from depression and anxiety disorders. VLS-01 is currently undergoing Phase 2 trials, and the company plans to initiate a Phase 2a trial for EMP-01 in early 2025, with results expected by 2026.
#2: Awakn
Awakn Life Sciences Corp. (CSE: AWKN) (OTC: AWKNF), a biotechnology company developing therapeutics for substance use and mental health disorders, recently announced the successful acquisition of an unsecured credit facility worth up to US$535,000. The credit, which was provided by an arm’s length creditor, is designed to support the company’s ongoing research and development efforts.
The credit facility, which was outlined in a grid promissory note, is flexible, allowing Awakn to draw on the funds in multiple advances. The principal drawn under the facility will be due for repayment on December 5, 2026, bearing a 10% annual interest rate. Awakn stated that it intends to utilize the funds primarily for general working capital purposes as it advances its clinical projects.
“We continue to make significant progress on research programs, including our lead program AWKN-001, which is in Phase 3 trials in the UK, and AWKN-002, which is in Phase 2 planning in the US. This facility extends our runway as we progress towards new milestones,” said Anthony Tennyson, CEO of Awakn.
Awakn is committed to providing breakthrough therapeutics for addiction, focusing on Alcohol Use Disorder, which affects millions of individuals in key markets. The company’s strategy is to commercialize its R&D pipeline across multiple channels, offering hope to those in need of new treatments.
