Investor Ideas Potcasts #536, Cannabis News and Stocks on the Move; (CSE: DELC) (OTCQB: DELCF), (TSX: CWEB) (TSXV: N)
Delta, Kelowna, BC - February 26, 2021 (Investorideas.com Newswire) www.Investorideas.com, a global news source covering leading sectors including marijuana and hemp stocks and its potcast site, www.potcasts.ca release today's podcast edition of cannabis news and stocks to watch plus insight from thought leaders and experts.
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Investor Ideas Potcasts #536, Cannabis News and Stocks on the Move; (CSE: DELC) (OTCQB: DELCF), (TSX: CWEB) (TSXV: N)
Today's podcast overview/transcript:
Good afternoon and welcome to another episode of Investorideas.com "Potcast" featuring cannabis news, stocks to watch as well as insights from thought leaders and experts.
In today's podcast we look at a few public company announcements.
Delic Holdings Inc. (CSE: DELC) (OTCQB: DELCF), a psychedelic wellness-focused company, announced that it has executed a definitive share purchase agreement to acquire all of the issued and outstanding shares in the capital of Complex Biotech Discovery Ventures ("CBDV"), a licensed psilocybin and cannabis research laboratory focused on extraction, analytical testing, and chemical process development. Founded by award-winning chemist, Dr. Markus Roggen, and UBC Professor, Glenn Sammis, CBDV supports the psychedelic industry with high precision chemical analytics and metabolomic identification. Following the Transaction, CBDV expects to change its name to "DELIC Labs".
- The acquisition of CBDV will further establish DELIC as a diversified psychedelics organization: The addition of CBDV will allow DELIC to add scientific-based research and analytics to its product offerings. CBDV recently received its Section 56 Exemption granted by Health Canada, enabling CBDV to focus on research and intellectual property development with psilocybin.
- Building an Intellectual Property ("IP") portfolio: CBDV plans to use its analytical tools for psychedelic mushroom compounds that advance clinical and end-user testing. Development of psilocybin analogs that could be used in future medical treatments.
- Enhanced exposure of CBDV to drive growth: DELIC expects to drive customers to CBDV through its media platform, allowing CBDV to expand its current customer base and potential product offerings.
- History of profitability: CBDV has a history of profitability, with a focus on extraction optimization, analytical testing, and chemical process development to advance the cannabis and psilocybin industry. Current and past customers are well-established global enterprises who require the cutting-edge cannabis and soon, psilocybin research, which CBDV provides services to.
- Management expertise. Roggen, who will remain as an employee of CBDV following closing of the Transaction, brings a wealth of knowledge and industry experience to DELIC, in a critically important and evolving space.
Matt Stang, Founder and CEO of DELIC, commented, "Joining forces with CBDV is a foundational transaction for DELIC. Science and research is the backbone of the psychedelic renaissance and adding the talent, know-how and expertise of CBDV will bear fruit both now and in the years to come. The fact that the company has a world-class team, history of profitability, more than 50 blue chip clients, and is on track for significant growth, makes this a compelling acquisition for DELIC and one that makes it a pillar of the Company. Going forward, with the discussions we currently have in place with the many entrepreneurs worldwide within the DELIC ecosystem, we see an opportunity to potentially commercialize this science in the near term."
CBDV is one of a handful of licensed research psilocybin labs in Canada and has an aggressive plan to build out a suite of novel compounds and delivery methods for the industry. The company is also a leading cannabis analytical and research company boasting clients that include some of the largest brands in the world. CBDV intends to apply for its dealer's license, to eventually commercialize its psilocybin research and associated IP.
Dr. Roggen, CEO of CBDV, stated "This is a very exciting moment for us at CBDV. Partnering with DELIC was an easy choice. The combination will allow us to use their platform to share our findings with the psychedelic and medical community while also gaining new clients on the cannabis front. It's a great opportunity to work in tandem with the DELIC team to help these new age treatments become accessible for all."
Matt Stang continues, "The DELIC ecosystem will benefit greatly from the IP that will come out of CBDV. As new jurisdictions start to decriminalize and legalize psilocybin, we feel we will have the IP that everyone will want. On top of that, our roots in cannabis are deep and we feel we can direct significant revenue in our network towards CBDV's cannabis business."
Charlotte's Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF), the market leader in hemp CBD wellness products, today announced a long-term scientific collaboration between McLean Hospital, a Harvard Medical School affiliate, and the Company. Funding and product support are provided by the CW Labs division of Charlotte's Web Inc.
Two distinct clinical trials will be overseen by lead researcher/investigator Dr. Staci A. Gruber, Ph. D, Associate Professor of Psychiatry at Harvard Medical School and Director of the MIND program at McLean Hospital in Belmont, Mass. These two studies will investigate the efficacy of a custom-formulated, hemp-derived high-CBD product. Clinical trial results are to be published in 2022. Dr. Gruber is also conducting a number of other studies, including a longitudinal observational study of Veterans who use a Charlotte's Web product.
Dr. Gruber's Marijuana Investigations for Neuroscientific Discovery (MIND) Program, established in 2014, is the first of its kind, and is dedicated to studying the long-term impact of cannabis and cannabinoids for medical and adult use which utilizes various clinical and cognitive tools as well as multimodal neuroimaging techniques.
"We are honored to be working with Dr. Gruber, Harvard Medical School and McLean Hospital on these important clinical trials," said Tim Orr, President of Charlotte's Web's CW Labs divison. "Charlotte's Web remains dedicated to supporting third-party research on hemp CBD investigated by some of the country's top scientists."
Namaste Technologies Inc. (TSXV: N) (OTC: NXTTF) a marketplace platform for cannabis and wellness products, announced that www.CannMart.com is live in the USA offering Americans hemp derived CBD and smoking accessories. Namaste is excited to be leveraging its VendorLink technology in collaboration initially with DankStop and PeakBirch Logic, Inc., and looks forward to adding more partners to the platform.
The announcement of this expansion in the USA underscores Namaste's intention to increase its total addressable market and exploration into other verticals and geographies as regulation evolves and other adjacent complementary market opportunities present themselves.
"With ever stronger signals that the regulatory landscape in the USA is evolving, our entry into the jurisdiction through the sale of hemp derived CBD and accessories will position us strategically to begin capturing new market share and build a first mover advantage if and when cannabis becomes legalized federally," said Meni Morim, CEO of Namaste. "This development also further validates our investment in technology, as the expansion will be facilitated via our marketplace technology. We look forward to building on this positive momentum as we continue to execute our strategy to position Namaste as a leading global cannabis and wellness company."
"Our goal will be to aggressively expand our footprint into the USA as we scale up our marketplace platform," said Chad Agate, CTO and VP of Marketplace at Namaste. "We are not growing or exporting products from Canada into the USA, we are simply carving out our role as the facilitators using CannMart.com and our VendorLink platform. American and other companies that wish to sell legal products in the USA can now use our innovative platform to conduct business similarly to Amazon. We look forward to adding more partners selling their innovative products throughout the USA."
"Our fourth quarter 2020 results are the summation of the hard work and perseverance the Company has put into this past year despite the challenges of 2020. As we look to 2021, I'm incredibly excited about the teams we have supporting our brands and the breakthrough research and development ("R&D"), innovation and exciting marketing campaigns Cronos Group plans to execute on. We are poised to build upon the growth we experienced in 2020 as we continue to push cannabinoid innovation and differentiated product offerings under our portfolio of brands," said Kurt Schmidt, President and CEO of Cronos Group. "My goals this year will be to focus on building a winning team by fostering a collaborative, performance-driven culture; continue to focus on creating disruptive technology and innovation; grow and develop our brands and strengthen our ability to compete through R&D, strategic global infrastructure and engaging in the legislative process in key markets."
Fourth Quarter 2020
- Net revenue of $17.0 million in Q4 2020 increased by $9.7 million from Q4 2019. The increase year-over-year was primarily driven by continued growth in the adult-use market in Canada, sales in the Israeli medical market and growth in our U.S. segment. Partially offset by non-recurring wholesale revenue in the Canadian market in Q4 2019 and strategic price reductions on various adult-use cannabis products in Canada in Q4 2020.
- Gross loss of $14.9 million in Q4 2020 decreased by $5.2 million from Q4 2019. The decrease in losses year-over-year was primarily driven by a decline in inventory write-downs and increased gross profit in the U.S. segment. Offset by third party purchased flower associated with adult-use products in Canada and a decline in wholesale sales in Q4 2020 versus Q4 2019.
- The Company incurred an inventory write-down in Q4 2020 of $15.0 million on dried cannabis and cannabis extracts, primarily driven by cannabis product price compression in the Canadian market. The Company may incur further inventory write-downs due to pricing pressures in the marketplace.
- Adjusted EBITDA loss of $53.1 million in Q4 2020 increased by $1.5 million from Q4 2019. The increase in losses year-over-year was primarily driven by an increase in general and administrative expenses and an increase in R&D spending.
- Capital expenditures of $11.0 million in Q4 2020 increased by $10.2 million from Q4 2019. The increase year-over-year was primarily driven by spending at the Company's Peace Naturals campus, Cronos Fermentation, our Israeli facility, and our new ERP system.
- Net revenue of $46.7 million in Full-Year 2020 increased by $23.0 million from Full-Year 2019. The increase year-over-year was primarily driven by continued growth in the adult-use market in Canada, growth in our U.S. segment, which included a full-year of the Redwood business as opposed to 117 days in Full-Year 2019, and sales in the Israeli medical market. Partially offset by non-recurring wholesale revenue in the Canadian market in Full-Year 2019 and strategic price reductions on various adult-use cannabis products in Canada in Full-Year 2020.
- Gross loss of $25.8 million in Full-Year 2020 increased by $8.2 million from Full-Year 2019. The increase in losses year-over-year was primarily driven by third party purchased flower associated with adult-use products in Canada and a decline in wholesale sales in Full-Year 2020 versus Full-Year 2019. Partially offset by increased gross profit in the U.S. segment due to a full year of results from the Redwood business and a decrease in inventory write-downs in the ROW segment.
- The Company incurred an inventory write-down in Full-Year 2020 of $26.1 million, on dried cannabis and cannabis extracts, primarily driven by cannabis product price compression in the Canadian market. The Company may incur further inventory write-downs due to pricing pressures in the marketplace.
- Adjusted EBITDA loss of $147.3 million in Full-Year 2020 increased by $48.9 million from Full-Year 2019. The increase in losses year-over-year was primarily driven by an increase in gross loss, increased general and administrative expenses, higher sales and marketing costs related to brand development and R&D spending.
- Capital expenditures of $35.4 million in Full-Year 2020 decreased by $3.6 million from Full-Year 2019. The decrease year-over-year was primarily driven by a reduction in spending at the Company's Peace Naturals campus and Cronos Israel. Partially offset by an increase in spending at Cronos Fermentation.
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