Cannabis Weekly Round-Up: Analyst Not Counting on US Reform
Catch up on the biggest cannabis news and company developments this past trading week.
A top cannabis analyst shared her outlook for US reform this week, and it's not optimistic.
Keep reading to find out more cannabis highlights from the past five days.
Cannabis analyst shares grim outlook for US reform
Cowen Managing Director and Senior Research Analyst Vivien Azer said in an interview that the lack of movement on US reform has become the "status quo" in the cannabis industry. “We haven't changed any of our estimates in terms of industry growth because the industry will continue to rely on state-level legalization,” she told Yahoo Finance Live.
The analyst added that her firm “is not at all constructive on regulatory reform” for cannabis in the US, and has a dim outlook on legalization. “We're not counting on it in the next 10 years. It's not factored into our model, unfortunately," Azer said.
While it's clear that Azer sees no resolution in sight for federal cannabis changes in the country, the analyst said investors shouldn’t be deterred given the upcoming growth potential for cannabis names as new state markets come online.
Azer named Green Thumb Industries (CSE:GTII,OTCQX:GTBIF) as Cowen's top pick at the moment, saying it is the most prepared company this year when it comes to the US marketplace.
Canadian grower sells facility
Aurora Cannabis informed investors it secured a gross proceeds of approximately C$15 million for its Edmonton facility.
The company now holds a net cash position on its balance sheet that includes approximately C$320 million in cash and cash equivalents. Aurora Cannabis originally announced the closure of the facility in 2021, including the dismissal of 8 percent of its workforce, according to MJBizDaily.
It’s been a rude awakening for the Canadian cannabis space, as companies have had to contend with a rapid shift from market interest in licensed capacity and massive growing facilities to a more distilled focus on branding and product uniqueness.
At the same time, the industry continues to struggle with consumer interest and oversaturation in dense markets like Toronto, all while still competing with a very active unregulated market across Canada.
Cannabis company news
- Canopy Growth (NASDAQ:CGC,TSX:WEED)completed a previously announced divestiture of retail assets in Canada. CEO David Klein said this change represents an “important step forward on our path to profitability.”
- The Valens Company (NASDAQ:VLNS,TSX:VLNS)secured final approval from the Ontario Superior Court of Justice for its merger with SNDL (NASDAQ:SNDL). The firm expects the deal to complete in January 2023.
- Flora Growth (NASDAQ:FLGC)successfully exported nearly 1,000 kilograms of dried cannabis and derivatives to Europe and the US in Q4 2022.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.