It’s time for your Daily Hit of cannabis financial news for July 30, 2020.
On the Site
FSD Pharma Inc. (Nasdaq: HUGE) (CSE: HUGE.CN)announced that it has notified Health Canada of the company’s decision to forfeit the licenses of its wholly-owned subsidiary, FV Pharma, Inc. and suspend all activities by FV Pharma within 30 days of the notification date. FSD Pharma said it has begun the process of liquidating all FV Pharma assets, including the sale of the company’s cannabis production facility in Cobourg, Ontario.
Shareholders are apparently happy with the move as the stock is up over 60% on the news and was lately selling at $6.04.
Like everything else touched by COVID-19, unexpected trends and shifts have occurred in the cannabis industry. One such shift is towards consumers seeking value products, which are rising in popularity due to a reduction in work and income across many different industries as the COVID-19 crisis wears on. In particular, low price/high THC combinations seem to be the magic bullet for anyone shopping for cannabis on a budget.
Canndescent, a brand that initially entered the market with a luxury-focus, recently launched the company’s third brand, Baker’s Cannabis Co. The brand offers lower-cost but still decent quality products, like $6 one-gram pre-rolled joints and $55 half-gram pre-ground pouches, which come equipped with rolling papers and crutches.
Clearing the Smoke
The complexities of the U.S. cannabis industry have been exacerbated by the consequences of states operating within the confines of closed economies defined by their own interpretations of legitimacy under the shadow of existing federal laws. These variations of standards from one state to another carry inherent uncertainties for businesses and investors with respect to how the industry will operate subsequent to the inevitable delisting or reclassification of cannabis.
The general health concerns, heightened levels of anxiety, and financial assault brought upon by the COVID pandemic have arguably enhanced the cannabis legalization debate regardless of any Trump or Biden preference. To minimize budget shortfalls, it stands to reason that many states that have not heretofore generated tax revenues from cannabis sales will now seek to initiate a discussion addressing legalization.
In Other News
DELTA 9 CANNABIS INC. (OTCQX: VRNDF) provided guidance on select financial results of the Company for the second quarter of 2020 based on preliminary results:
- The Company anticipates revenues for the three-month period ending June 30, 2020 to be between $12.7 million and $13.2 million, compared with:
- $8.9 million for the second quarter of 2019.
- $11.7 million sequentially for the first quarter of 2020.
- Based on preliminary results, the Company anticipates revenues for the six-month period ending June 30, 2020 to be between $24.3 million and $25.1 million, compared to $14.5 million for the same period last year.
- The Company anticipates direct cannabis production cost per gram of $0.96 and total cost per gram of $1.08 for the second quarter 2020, compared with:
- $1.05 and $1.04 respectively for the second quarter of 2019.
- $0.98 and $1.10 respectively for the first quarter of 2020.