AS quarterly and full-year results continued to be published across the global cannabis industry, European stocks enjoyed a relatively stable week compared to their North American counterparts, with both Canadian and US indexes experiencing swings in both directions.
This was aided by a more positive week on the wider markets, with the FTSE 100 set to report its strongest week of gains since March despite a continually gloomy economic forecast.
Across the pond the S&P 500, Nasdaq and Dow are also looking set to break their longest losing streaks in decades, thanks to a widely positive couple of weeks of quarterly reporting and upbeat guidance from major retailers.
Although SEED Innovations released updates about three of its investee companies over the past two weeks, including Yooma Wellness, Little Green Pharma and Leap Gaming, only the latter had any appreciable impact on its share price.
The multi-sector AIM-listed portfolio investment firm, which holds a significant stake in six cannabis companies worldwide, saw its share price rocket over 25% this week.
At the end of last week SEED updated the market with news that Australian medical Cannabis operator Little Green Pharma (LPG), of which it owns a 3.1% stake, had signed a major new 2.5-year supply contract with Four 20 Pharma.
The deal, which represented LGP’s largest ‘single-strain offtake quantity contract to date’ with a minimum commitment of $7.5, is due to see the first product deliveries completed by the end of the year.
Despite the deal giving LGP a significant foothold in the German market, investors’ reaction to the news was muted, largely due to the relatively small stake SEED holds in the company.
Days later on May 24 Leap Gaming, one of SEED few investments outside of the health and wellness sphere, announced that it had been granted a content supply license by the United Kingdom Gaming Commission (“UKGC”).
The licence will allow the virtual gaming company, of which SEED owns a 44% stake, to access the UK’s £14bn gambling market.
While many investors hailed this as a major step towards an IPO for Leap, expected this year, some longer-term investors remained cautious having been burned before.
Many cited the sale of SEED’s stake in EMMAC in March 2021, which saw it make a 1.86 times return on its original investment, amid growing speculation and investor excitement that an IPO at EMMAC could be imminent.
Akanda / Holigen
Akanda’s stock continued its downward trajectory throughout the week dropping a further 15% to see its stock sit below $1 for the first time since it listed in March.
While this gradual decline has been ongoing since the first week of May, this week saw The Flowr Corporation, from which Akanda has just acquired Holigen in a $35m deal, release its full year results for 2021 giving investors some fresh insight into the financials of its new acquisition.
The Flowr Corp, a Canada-based cannabis cultivator, purchased Holigen and its growing operations in Portugal and Australia in 2019, before selling it on to Akanda in April 2022.
Across its operations in Canada, Portugal and Australia, the group reported an adjusted EBITDA loss of $20m CAD for the full year, a $2m CAD increase on the previous year, alongside net losses of $89m CAD, down from $128m CAD a year earlier.
These losses were made on net revenues of $12.3m CAD, up from $7.5m in 2020, and 6.62bn grams of flower sold.
According to the group, just $712k of this net revenue was attributed to Holigen, including $122k in the final quarter, though this was significantly higher than the $67k CAD reported in Q4 of 2020.
Futura Medical, which specialises in treatments for erectile dysfunction using CBD, was one of the best performing companies this week, seeing its stock jump 10%.
It came as the company announced that it had signed a deal with French consumer health company Cooper to ‘commercialise’ its flagship MED3000 throughout the European Economic Arena, United Kingdom and Switzerland.
Under the terms of the five-year deal Futura is due to receive undisclosed upfront payments from Cooper, as well as cumulative sales milestone payments.
It will also reportedly manufacture and supply the product through its third-party contract manufacturers for Cooper.
Cooper will also be responsible for the launch and marketing expenses of the product, which was approved for sale in the UK post-Brexit in April, and will be sold over the counter without the need for a prescription.
Although some investors criticised the relative lack of detail in the announcement, many touted the deal as a key milestone for Futura, and one that has been long delayed due to a number of regulatory hold ups.